WPP handed lucky exit from Japanese jam 3 Oct 2017 The British ad group, which owns 25 pct of Asatsu-DK, reckons Bain’s $1.3 bln offer for the Asian company is stingy. But WPP is already a winner. CEO Martin Sorrell will either profit from the private equity group’s margin-boosting clout or get the best terms in a decade to exit.
Nestlé can pre-empt Dan Loeb with refreshed board 3 Oct 2017 The Kit Kat maker’s directors are light on consumer and digital expertise. Half of them are Swiss, a market worth just 2 percent of sales. Nestlé’s latest revamp plans are far from radical, and the activist may next seek boardroom changes. The company could beat him to it.
Anil Ambani’s telecoms empire is slipping away 3 Oct 2017 Now that a merger of its mobile unit has failed, the Indian tycoon is running out of options to keep control of his flagship Reliance Communications while reducing its $7 bln of debt. One creditor has already petitioned for insolvency. Others may soon run out of patience too.
Monarch suffers very British failure 2 Oct 2017 The airline’s past reliance on tourism to Egypt and Tunisia, now danger areas, started the rot. But the Brexit-induced slump in sterling worsened things, and a laissez-faire resistance to government intervention – unlike the German help handed to Air Berlin – finished the job.
Central bankers’ superpowers are looking spent 2 Oct 2017 Between taming inflation, fighting the financial crisis and averting a breakup of the euro, monetary policymakers acquired an aura of omnipotence. Their responsibilities are growing and their mandates have turned into a fetish. A painful collision with reality is overdue.
Catalonia crisis is painful distraction for Spain 2 Oct 2017 Despite violent police intervention, the region’s vote to leave Spain is unlikely to trigger a breakup of the country. Yet the political unrest has damaged an already weak government and could strain public finances. Spain’s recovering economy needs a bigger political discount.
Political fiddles skirt UK housing market problem 2 Oct 2017 The Conservative government is putting up more cash to help homebuyers, while the Labour Party proposes rent controls. Both policies risk hurting those they are supposed to help. Lasting reform means pushing down house prices; no politicians seem ready to pay the political price.
Home delivery boom kicks off property scramble 2 Oct 2017 Singapore-listed Global Logistic Properties is buying warehouse owner Gazeley for $2.8 bln. It’s the third big European logistics deal this year as a boom in e-commerce revives the once-sleepy sector. Sovereign wealth and pension funds will increasingly follow consumers’ money.
Volkswagen can’t even get its kitchen sink right 29 Sep 2017 The German carmaker set aside another 2.5 billion euros for costs related to its emissions-cheating scandal – more than a tenth of the previous total. Two years on from Dieselgate, the final bill is still far from clear. Little wonder investors are so pessimistic.
Crypto-currencies’ strength becomes their weakness 29 Sep 2017 Freedom from regulation was the big draw of bitcoin, ether and the like. But exchanges established to trade them often lack basic controls on identity, fraud, tech and even volume. Without fixes, digital currencies will stay on the financial fringe, prone to crime and bubbles.
Ryanair’s cheapskate reputation is its best asset 29 Sep 2017 Angry customers and an irate regulator might pose an existential threat for most companies. Not the budget airline. Cancelling 20,000 flights will cost it a little in compensation and slower growth. As long as travellers favour discount fares, though, its planes will remain full.
Telecom Italia CEO’s job: fix governance discount 29 Sep 2017 The telco named Amos Genish its new boss. The Israeli’s to-do list includes mending relations with the Italian government and clarifying those with shareholder Vivendi – as well as fighting fresh competition. Unless he addresses these problems, TI’s lowly valuation will endure.
Banks’ health squeezed by rampant compliance costs 29 Sep 2017 They now spend an average of around 4 percent of revenue to comply with regulators’ requirements, according to a poll by Duff & Phelps. That is expected to increase to as much as 10 percent by 2022. Red tape will keep weighing on lenders’ margins as well as employees’ sanity.
Amazon European shopping talk is wishful thinking 28 Sep 2017 Supermarkets Carrefour and Sainsbury have been floated as potential targets following the e-commerce giant’s $13.7 bln purchase of Whole Foods. But CEO Jeff Bezos already owns the one grocer he really needs. Bid speculation only obscures the broader competitive pressures.
Rocket Internet rejig exposes valuation mismatch 28 Sep 2017 The German tech investor is jettisoning half its stake in Delivery Hero for 660 mln euros. That’s welcome, but investors still don’t trust boss Oliver Samwer with the cash. Unless he pledges to return more of it to shareholders, Rocket’s stratospheric discount will persist.
Italy gets narrow lead in race for EU naval giant 28 Sep 2017 Shipbuilder Fincantieri has won conditional control over French rival STX, which Paris nationalised suddenly in July. The pact defuses a cross-border diplomatic row. But the real battle will be fought over the ownership of a European naval champion that is now in the making.
Bond investors toss a coin on Saudi reforms 28 Sep 2017 The kingdom’s $12.5 bln bond was oversubscribed. Rising oil prices and low debt help explain the appeal. But the 30-year notes remain a bet that Crown Prince Mohammed bin Salman can wean Saudi Arabia off oil. Investors’ zeal is a benchmark of the demand for emerging market debt.
Google clears deck for huge antitrust fight 27 Sep 2017 The company is separating its European shopping unit and allowing rivals to bid for ads. That solves one problem it has with watchdogs while minimizing losses and continuing an appeal. It also frees up Google to battle the EU over claims it uses Android to dominate online search.
U.S. plane spat morphs into unwinnable dogfight 27 Sep 2017 The UK joined Canada in threatening to punish Boeing after the Trump administration slapped duties on Bombardier’s flagship jet. Targeting aircraft subsidies is laudable, but Washington’s tough tactics, matched by Justin Trudeau and Theresa May, could shoot down all sides in flames.
Southern Europe may miss Wolfgang Schaeuble 27 Sep 2017 Germany’s finance minister is ready to step down to become the head of the lower house of parliament. An insistence on budget discipline made him popular at home but reviled in crisis-hit euro zone countries. His replacement may come from a party that takes an even tougher line.