Anglo may struggle to make clean platinum break 21 Jul 2014 The UK-listed miner’s South African unit wants to sell high-cost mines that account for a quarter of platinum production and half of the workforce. It’s a sensible move for Anglo, but the politics are fraught. If the buyer gets into trouble, Anglo might end up back on the hook.
Clever Bundesbank recruits labour as a policy tool 21 Jul 2014 Even in thriving Germany, no one has figured out how to push up wages enough to reverse disinflationary pressure. The central bank is trying something new: encouraging unions to fight harder for pay rises. It may have enough authority to incite some healthy inflation.
Tesco’s new chief should think the unthinkable 21 Jul 2014 Hiring Unilever exec Dave Lewis to replace Phil Clarke as CEO shows necessary decisiveness. A profit alert highlights the urgency of the situation. The UK grocer needs radical reinvention. The structure could be simplified, and braver tactics in the UK price war may be required.
Business faces tough adjustment to post-MH17 world 21 Jul 2014 Western governments are rounding on Russia after the crash of MH17. Sanctions against the country will be toughened, regardless of business not being ready for a prolonged economic conflict. Obstinate Russian bulls should be prepared to pay the price of escalating tensions.
Hugo Dixon: What is EU capital markets union? 21 Jul 2014 Jean-Claude Juncker, the European Commission’s president-elect, has embraced the goal of creating such a framework. But so far it is more of a slogan than a set of policy actions. Here’s an attempt to flesh out the idea.
UK banks have much to fear from latest probe 18 Jul 2014 Britain’s top antitrust watchdog has warned lenders to expect a full-blown competition investigation. Forced divestments would be a surprising outcome. But given the persistence of concern in spite of past probes, investors should brace for radical, profit-sapping remedies.
Blackstone needed a little help on its Spanish bet 18 Jul 2014 Madrid twice failed to flog bailed-out Catalunya Banc. Selling 6.4 bln euros of the bank’s bad loans to the U.S. buyout group will help a privatisation – but only after Spain stumps up another 572 million euros. In return, Madrid gets some potential upside. Strictly potential.
Potent Russian sanctions show Europe the way 17 Jul 2014 Moscow markets tanked after the U.S. agreed new, tougher economic measures against Russia over its role in Ukraine. Sanctions work. The EU should remember that when announcing its own plan in a few weeks – unless Vladimir Putin offers an olive branch by then.
Liberty Global may eventually bid for all of ITV 17 Jul 2014 The cable group bought 6.4 pct of the British broadcaster from BSkyB for 481 mln stg. The stake is too small to confer any sway over ITV or stop a rival bidder. But Liberty is increasingly keen on content as well as distribution. A full takeover could follow.
VW tilt at Fiat would be a bad idea 17 Jul 2014 Shares in Fiat are climbing on a German media report of a possible bid from Volkswagen for all or part of the $13 bln Italian carmaker. VW has enough on its plate. It’s hard to see the benefit of adopting Fiat’s problems. The logic of Fiat selling its Chrysler unit is weak too.
London real estate at an inflection point 17 Jul 2014 Property values in the UK capital are up 20 pct in a year. But leading indicators – buyer enquiries, new mortgages and volumes – have stalled. For prices to hold, foreign buyers will have to spend more in spite of a stronger pound and punitive taxation.
BoE doves look an endangered species 16 Jul 2014 UK unemployment is falling and inflation has rebounded towards the Bank of England’s 2 percent target. Any policymakers who are opposed to an early rate rise can point to the persistent and puzzling weakness of wage growth. But the cards are increasingly stacked against them.
Portugal Telecom pays the price for weak controls 16 Jul 2014 An Espirito Santo group company failed to repay a $1 bln loan to PT. That means the telco’s shareholders will own a smaller stake in the group it planned to form with Brazil’s Oi. It’s not a good start for a complex merger. The combined entity looks financially weaker.
Hugo Dixon: UK prepares for possible EU failure 16 Jul 2014 David Cameron has appointed a eurosceptic as his foreign minister and nominated a little-known former lobbyist as Britain’s European commissioner. The prime minister looks to be lining up a Plan B of campaigning to quit the EU if he fails to reform it. This would be a mistake.
Lottery firm buys pricey $5 bln ticket out of Italy 16 Jul 2014 GTECH is buying U.S. slot-machine maker IGT for $4.7 bln in cash and stock. That’s a bold price given IGT’s competitive challenges. The buyer is talking tough on synergies. Still, this cuts GTECH’s reliance on Italy - and could also bring down its tax bills.
China’s $1.5 bln pizza takeout can deliver returns 16 Jul 2014 Hony Capital has gobbled up Britain’s Pizza Express. The Chinese buyout firm looks better placed than seller Cinven to bring crispy goodness to Middle Kingdom diners. A price of 10 times EBITDA is digestible. A dollop of debt means modest growth could bring 21 pct annual returns.
Burberry and StanChart need Peace to break out 15 Jul 2014 The retailer and the bank are both chaired by John Peace. He’s retreating from a third chairmanship at Experian but is still spread thinly. Throw in bust-ups over executive pay and corporate governance, and both blue-chips might usefully start looking for a new chairman.
Banco Espirito Santo could lure periphery bulls 15 Jul 2014 The stock has fallen sharply again. Forced selling for margin calls may be the main reason but a capital hike is needed to stabilise matters. On a gloomy analysis, the Portuguese bank probably still has a sliver of equity. That suggests opportunity for a private-sector saviour.
Markets sleepwalking into European slowdown 15 Jul 2014 Portuguese worries have taken Europe’s shares off their highs. But investors haven’t fully registered a deceleration in the region’s big economies – including Germany. The softening may partly reflect the crisis in Ukraine. Either way, policymakers have no easy remedy.
Mylan sets itself for M&A repeat prescription 14 Jul 2014 The U.S. pharma company will pay $5.3 bln for generic drug assets owned by Abbott. The transaction between the two American companies will see Mylan acquiring a tax home in Europe. The buyer is also likely to do further deals – and look for more tax arbitrage.