Telefonica can afford to bin its austerity drive 21 Oct 2016 After setbacks in selling both its O2 and infrastructure units, the Spanish telco won't hit self-imposed debt targets by next year. To avoid a fire sale, the objective should be scrapped. Axing the dividend and a ratings downgrade would sting, but would also limit the fallout.
Private equity reconsiders whether three’s a crowd 21 Oct 2016 Cinven, Permira and Mid Europa have teamed up to buy Polish online auction site Allegro for $3.3 bln. Such consortia were popular in the LBO heyday but faded post-crisis. As deals grow bigger and buyout shops clamber to deploy capital, clubbing may get an unexpected second life.
Viewsroom: Airing Trump TV 20 Oct 2016 The presidential candidate's poor showing is hurting his businesses, but a news network could pay off if he loses the election. Saudi Arabia's monster bond deal can't mask bigger problems. And bank earnings take in the Wells Fargo effect while Netflix investors lose the plot.
Philip Green is an advert for deferred knighthoods 20 Oct 2016 British MPs voted to strip the rag-trade billionaire of his title. Yet despite the collapse of retail chain BHS, Green hasn’t done anything the law didn’t allow. Such unpleasantries might be more easily avoided if knighthoods were treated more like executive bonuses.
Nasser’s exit gives BHP chance to reinvent itself 20 Oct 2016 The Anglo-Australian miner's departing chairman, Jac Nasser, delivered middling returns and a narrow vision for the future during his six-year tenure. BHP wants its workforce to be more diverse. A good place to start would be at the top. New blood and new thinking is long overdue.
Goldman-led charge on returns maths falls short 20 Oct 2016 CEO Lloyd Blankfein finds it odd that shareholders keep pegging the industry's cost of equity at 10 pct. The ECB reckons it has been lower, but fluctuates wildly. There is some premise for lowering it, but regulation, dividend curbs and other factors make swaying opinion hard.
Sky scrambles outlook for UK mobile operators 20 Oct 2016 The UK pay-TV operator’s imminent foray into mobile telephones may be a bid to boost customer loyalty, not profitability. Aggressive pricing is the obvious way to win fans in this competitive 15 billion pound market. That’s bad news for incumbents such as Vodafone and O2.
Nestle rubs up against limit of consumer demand 20 Oct 2016 The coffee-to-chocolate maker cut its forecast as quarterly sales disappointed. Rivals face similar problems. With little volume growth, niche units like Nestle’s venture capital division will become more important, and pricing tussles with retailers more frequent.
Defiant losers are becoming a costly problem 20 Oct 2016 Pro-EU campaigners and Britons who live near airports have challenged the will of the majority. Donald Trump may not accept U.S. election results. In finance, companies regularly face and resolve such insurrections. Solutions are similar in politics, but harder to implement.
Syngenta investors can depend on Chinese stomachs 20 Oct 2016 Talk of a state-ordered merger rattled shareholders of the Swiss agribusiness group, which has accepted a $43 bln takeover by ChemChina. But food security is crucial for Beijing and there are few comparable targets available. A failed deal would be a big embarrassment too.
Portugal delays day of reckoning for another year 19 Oct 2016 Further tax increases mean the troubled country should avoid a debt downgrade, keeping its bonds eligible for ECB money-printing. Yet Lisbon's high debt load and weak growth mean the risk of a restructuring hasn't gone away. It could kick in after next year's German elections.
Unshackled May is best bet for Brexit 19 Oct 2016 High Court claimants say the government owes parliament a say before triggering EU exit. The risk is that MPs use a vote to restrict Theresa May's options and weaken her hand. Proponents of a "soft Brexit" might end up with a more agreeable deal if the government goes in hard.
Italy’s flawed hero needs more than Obama backing 19 Oct 2016 Prime Minister Matteo Renzi's reforms have been praised by the outgoing U.S. president. Yet polls suggest he may soon lose an important constitutional referendum. That would be a shame: Renzi has made mistakes, but his reforms are needed, and a divided Italy needs his dynamism.
Web-shy Germany has an edge in grocery wars 19 Oct 2016 Europe's three key food markets are challenged. Carrefour reported 0.1 pct nine-month sales growth in France, while profit margins have halved for UK grocers in five years. For now, the unique structure of Germany's grocery sector, and its qualms about online, provide a buffer.
UK watchdog falls for its own league-table spin 18 Oct 2016 The Financial Conduct Authority has identified some dodgy IPO practices. But after 18 months of work, it's lacking concrete solutions while still griping about how banks use league tables. The carefully tailored rankings fool no one, and the FCA should focus its effort elsewhere.
Inflation is next nerve-jangler for investors 18 Oct 2016 After years of undershooting price targets, some rate-setters, including Mark Carney in Britain, are now talking about tolerating overshoots. Equity winners will vary depending on whether inflation is of the good or bad variety. But global bonds are losers either way.
William Hill’s second fold raises the ante 18 Oct 2016 The $3.3 bln UK bookmaker called off a merger with Canada's Amaya after activist fund Parvus objected. That follows the decision to spurn a takeover bid from rivals 888 and Rank. With deal partners falling, revenue shrinking and no CEO, William Hill is playing a bad hand alone.
RBS’s Russian goof sets tone for UK state meddling 18 Oct 2016 The UK lender is reviewing a decision to stop banking a supplier of Russian broadcaster RT. It could just be a business matter, but RBS’s 73 pct state holding makes it seem political. If a post-EU Britain is heading for more use of subsidies, such confusion will recur.
Inflation shows up at wrong time for Mark Carney 18 Oct 2016 UK consumer prices are rising at their fastest pace in nearly two years. It should be a proud moment for the Bank of England chief, who has been struggling to achieve exactly this. Unfortunately, the pound’s fall is going to give him a bit too much of what he wanted.
Saudi bonds put Riyadh first and investors last 18 Oct 2016 The world's largest crude oil exporter is selling $15 bln of bonds. Demand will be strong even though Saudi is offering few insights into oil policy, regional strategy or the fiscal outlook. If the kingdom struggles to wean itself off oil, investors can expect bruising treatment.