Zurich’s loss of RSA nerve dents its credibility 21 Sep 2015 The Swiss insurer has binned plans to buy its UK peer - and issued a profit warning. A deal at the mooted 5.6 bln stg level could have worked, given RSA’s potential. If Zurich doubted RSA’s ability to recover, it shouldn’t have sniffed around in the first place.
Tsipras’ next task: winning over doubting markets 21 Sep 2015 The left-leaning Syriza party fared well in Greek elections, giving Alexis Tsipras a stronger-than-expected mandate. Yet bond yields show that investors aren’t sure he will push ahead with Greece’s bailout and keep it in the euro zone. Market pessimism makes Tsipras’ job harder.
Dialog’s U.S. chip deal has macroprocessing risks 21 Sep 2015 The Frankfurt-listed seller of power-efficient microchips is buying Atmel for $4.6 bln. The deal would reduce Dialog’s reliance on Apple, might improve its network-connected chips, and should give decent cost savings. But it brings sizeable integration challenges.
Bayer $11 bln plastic IPO looks far from fantastic 21 Sep 2015 The German pharma giant is floating its Covestro division. The unit is cash-generative and well positioned for growth. But it is also a capital-hungry and cyclical business that has destroyed value for years. Bayer might need to be more flexible on the float price.
Hugo Dixon: It’s all up to Tsipras now 21 Sep 2015 The leftist politician’s electoral triumph means domestic forces can’t impede him in implementing Greece’s 86 billion euro bailout deal. The big question is whether Alexis Tsipras has the will and the competence to do so. If not, his victory could soon turn to disaster.
French central bank spat shows Hollande’s tin ear 18 Sep 2015 ECB policymaker Benoit Coeuré has an issue with the way top jobs are filled in his native France. He missed out on heading the national central bank. But his critique is spot on. President Francois Hollande could have easily avoided the conflict brewing over this nomination.
Review: Regulation won’t stop bad banker behaviour 18 Sep 2015 Wall Street’s growing abuse of conflicts of interest is exposed in John Kay’s “Other People’s Money: The Real Business of Finance.” But the remedy is simple. To put an end to these shenanigans, and get bankers to conduct themselves responsibly, incentives need changing.
England will win the Rugby World Cup 18 Sep 2015 The quadrennial battle for the Webb Ellis Cup begins at Twickenham on Friday. The bookies’ favourite is the New Zealand team. But a Breakingviews data-driven analysis suggests the English rose could triumph – with France edging the always awe-inspiring All Blacks into third.
Bud-SABMiller investors punch drunk on synergies 18 Sep 2015 Markets have added $30 billion to the two brewers’ value in response to a mooted merger. A simple analysis suggests that’s akin to saving at least 15 percent of SABMiller’s revenue – close to what AB InBev got from its last big deal. It’s not impossible, but it’s a tall order.
Worldpay IPO looks surer bet than M&A 18 Sep 2015 The private equity-backed UK payments processor is pressing ahead with a $1.4 bln IPO, despite a takeover tilt from Ingenico. The French company wants to create a payments giant, but the financing could be a stretch and scupper a deal. The float is the safer option.
Corbyn’s good idea on EU outweighs the bad 18 Sep 2015 The new opposition leader will campaign to stay in the European Union in the UK’s forthcoming referendum. Less smart is Jeremy Corbyn’s vocal support for a financial transactions tax, which could hit growth. Still, investors will take a duff levy over EU isolation.
Debt markets mistake Spain for Italy 18 Sep 2015 Last year the Iberian country was being compared by investors to safe Germany. Now foggy politics mean investors want a higher return than on Italian debt. The political premium looks temporary: Spain is faster-growing and no riskier than its Mediterranean cousin.
Electra’s activist still has everything to prove 18 Sep 2015 Sherborne, the activist investor run by Edward Bramson, is revisiting last year’s bid to shake up the UK-listed investment trust. This time, Bramson seems more exercised about investment performance than board seats. He will need better arguments than those already rejected.
Dolan family’s bet against dumb pipes a no-brainer 17 Sep 2015 Selling Cablevision to Altice leaves the clan with Madison Square Garden and choice content like “Breaking Bad” and the New York Knicks. The move to make the cable holdings separate years ago looks smart. Dumping them as more viewers buy programming à la carte seems even smarter.
Bud can swallow SABMiller without busting a gut 17 Sep 2015 AB InBev’s offer for the Peroni brewer could come in at $110 billion. Up to half might be paid in equity, while disposals may cut the cash outlay by around $20 billion. Even before synergies, that could leave the new group’s net debt to EBITDA ratio the right side of four times.
Altice keeps powder dry in $18 bln Cablevision bid 17 Sep 2015 Patrick Drahi’s telecoms group is buying its second U.S. cable operator to become the fourth-largest player. The valuation looks high but savings will help. Importantly, Altice isn’t contributing much cash. Possible co-investment with private equity could reduce costs further.
Wilbur Ross is taking the mickey on Greek banks 17 Sep 2015 The U.S. investor wants the euro zone to provide up to 23 bln euros in contingent capital so lenders’ existing shareholders aren’t diluted. While the idea has merit, Ross’ specific proposal looks greedy. The public sector would end up doing too much, private investors too little.
It may be Miller time for buyout barons 16 Sep 2015 If AB InBev can buy rival SAB, its U.S. arm probably will be divested. Miller’s partner, Molson Coors, would struggle to raise the $12 bln or so Breakingviews estimates it would take to gain control. That could open the brewery door for private equity to put some $6 bln to work.
Liquid banks foretell dryer bond markets 16 Sep 2015 Lenders are close to reaching their targets for safe assets like government bonds, as required by new liquidity rules. Recently they have been forced buyers, helping suppress yields. If that demand has peaked, bond investors have more to worry about than U.S. rates and China.
Bud’s mega-beer deal will brew global reset 16 Sep 2015 After years of speculation, AB InBev has approached SABMiller about a takeover that could value the combined entity at around $280 bln. The giant would complete global consolidation of the brewing industry and lead a new round of regional disposals, spins and amalgamations.