Italy’s zero-cost bailout is too good to be true 23 Nov 2015 The Italian bank resolution fund will cough up 3.6 billion euros to restructure four failing lenders. Officially, public funds won’t be used, but the burden will hit a sector already struggling with low rates and weak demand. Rome could find itself on the hook too.
Transatlantic ATM merger unlocks fortress Germany 23 Nov 2015 U.S. cash dispenser maker Diebold is buying Germany’s Wincor Nixdorf for $1.8 bln. It’s the first deal of its kind done for a target without an anchor shareholder. Nixdorf was initially sceptical. Its acceptance suggests German boards no longer see independence as sacrosanct.
Playtech’s failed M&A makes gambling a bigger risk 23 Nov 2015 Regulators have forced Israeli billionaire Teddy Sagi’s company to drop its half-billion pound bid for UK currency trader Plus500. A related Irish deal could now fail too. With betting-industry customers consolidating, Playtech may have to pursue other finance-sector targets.
Dixon: How the EU could woo the UK 23 Nov 2015 The British prime minister wants to rework the UK’s relationship with Europe. Once complete, other EU leaders could launch a charm offensive to persuade Britain it is valued and influential, and to vote to stay in the union. Here’s what Merkel, Hollande, Renzi, et al could say.
Pfizer-Allergan to throw down tax-reform gauntlet 23 Nov 2015 The drug firms are shrugging off Uncle Sam’s latest attempt to prevent mergers predicated on relocating to low-tax jurisdictions. The largest-ever inversion, at some $150 bln, ought to raise pressure on lawmakers to find more comprehensive fixes to the great M&A tax dodge.
C&W deal exposes John Malone’s paper-thin trackers 20 Nov 2015 The Latam and Caribbean cable operator’s $8 bln sale to the media mogul’s Liberty Global presents shareholders with three forms of payment. The C&W board is recommending the one without a tracking stock. That partly undercuts the reason for creating such shadow shares.
A Panglossian guide to valuing Telecom Italia 20 Nov 2015 Telecom Italia’s tough home market and high debt might struggle to elicit a buy from even Voltaire’s eternal optimist. Purchases from French billionaires Vincent Bollore and Xavier Niel have driven up the price. The shares could be worth more, but only with heroic assumptions.
German co-op bank M&A shows Landesbanken the way 20 Nov 2015 The merger of cooperative banks DZ and WGZ is a lesson for Germany’s state-owned lenders. The deal generates 100 mln euros of annual cost benefits. Ropey Landesbanken are bogged down by regional vanities but cannot afford to leave that money on the table by dodging mergers.
UK shuts stable door after HBOS horse has bolted 19 Nov 2015 Regulators are to look at whether those responsible for the bust lender’s demise should face censure. Judging by another report into why HBOS failed, the answer may well be yes. But the meaningful penalties remaining – pension clawbacks or big fines – look legally tricky.
Investors get too comfy over US-euro divergence 19 Nov 2015 Twin the prospect of higher U.S. policy rates with the chance of more euro zone easing and the result is eye-catching divergences in currency and interest rate markets. The problem is, such price trends are vulnerable to setbacks even if rate-setters do what’s expected of them.
Royal Mail is delivering in traditional style 19 Nov 2015 Shares in the UK postal service rose 6 pct on Nov. 19. Half-year revenue was flat but Royal Mail is squeezing costs. Hats off to CEO Moya Greene. Through old-fashioned hard work, the business is looking more and more sustainable. Still, the headwinds are unrelenting.
VW’s dieselgate may be Lonmin cash call decider 19 Nov 2015 The South African platinum miner wants to raise $407 mln to fund restructuring. The 46-for-one rights issue means investors that fail to subscribe will be diluted almost out of sight. Much of the investment decision rests on demand for catalytic converters as VW cleans itself up.
Willis could kill merger-of-equals conceit 18 Nov 2015 The UK-based insurance broker’s $18 bln union with U.S. consultancy Towers Watson is on the rocks. Investors have turned some $5 bln of promised synergy value into $1 bln of value destruction. A rescue would probably unbalance the economics, undermining the promised equality.
Air Liquide’s bid for Airgas leaves value vacuum 18 Nov 2015 The French gas company’s $13.4 billion acquisition melds two complementary businesses – the larger Air Liquide supplies mainly big customers; its U.S. rival serves smaller outfits. Yet unless the buyer can superheat the synergies, the deal will leave its shareholders worse off.
UK fund fee crackdown a welcome detour from TBTF 18 Nov 2015 Asset managers this year managed to avoid too-big-to-fail status. The FCA’s focus on whether they deliver a good service is a worthier target. As savers take more investment decisions themselves and banks expand in a capital-light sector, duff performance is a bigger problem.
VW victims eclipsed by firms that bet on lawsuits 17 Nov 2015 A firm backed by hedge fund Elliott is bankrolling a case claiming the carmaker duped shareholders. There are other customer and investor actions, too. The financial muscle makes huge awards more likely. But the real losers may take a back seat if court fights are just business.
Dialog shareholders should short-circuit Atmel bid 17 Nov 2015 The Anglo-German chipmaker’s $4 billion-plus bid for its U.S. peer has been opposed by activist Elliott Management. Both sides have put forward doubtful theories to make their case. But Elliott is right on one thing: the integration risks look too big.
France can afford budget-busting security spend 17 Nov 2015 Prime Minister Manuel Valls says the deficit is bound to miss EU targets as security spending rises after the Paris attacks. Brussels is unlikely to kick up a fuss over this exceptional overspending. Nor will investors, who are used to serial French fiscal slippage.
EasyJet’s brio bodes ill for Lufthansa, Air France 17 Nov 2015 On the back of an 18 pct jump in pre-tax profit in 2015, the UK budget carrier is ordering more planes to step up growth and expand into new routes. The confidence is merited. High-cost legacy carriers are too bogged down by labour unrest to fight more nimble low-cost rivals.
Glencore can’t delay with $2 bln agri-sale 17 Nov 2015 The debt-laden commodities trader is slimming down in agriculture. But two months into the disposal process, one potential buyer says he thinks the business is “not really on the market”. With copper prices hitting a fresh six-year low, Glencore can’t afford to drag its feet.