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.
Shire shows power of tax inversion levers 14 Jul 2014 The UK pharma group says a $54 bln proposal from U.S. suitor AbbVie is potentially acceptable. The 50 pct premium reflects the value of tax synergies and the recommendation needed to achieve them. AbbVie will doubtless prevail if its share price holds, and there is no counterbid.
Life’s like a box of chocolates for Lindt owners 14 Jul 2014 Investors in the Swiss confectioner didn’t know they were going to get Russell Stover, the $1 bln-plus U.S. firm whose gift box starred in Forrest Gump. They still don’t know exactly what Lindt paid. Cost savings will be slim. This is about selling more chocs in middle America.
Hugo Dixon: How to fight UK immigration fears 14 Jul 2014 UKIP has fanned fears so much that Brexit is now a risk. The best response is to show how free movement of people within the EU benefits the economy and society overall, while acknowledging that some groups may be harmed and working to improve their lot.
German soccer glory was predictable – with luck 13 Jul 2014 Brazil’s World Cup was first-rate entertainment, thanks to many surprising results. In finance, as in sport, forecasting is a dangerous game. But it is where the greatest value lies. The key is to draw conclusions from pertinent facts. Luck helps, too.
German $13.5 bln auto-parts bid may lack gas 11 Jul 2014 ZF Friedrichshafen is mulling an offer for U.S. peer TRW. It’d be the sector’s biggest tie-up since 2007. In the race to build connected, automated vehicles, the deal makes sense. But the privately owned German group may struggle to match counteroffers from larger, public rivals.
Burberry could have avoided pay revolt 11 Jul 2014 The fashion retailer’s pay policies are outdated. Shareholders have objected to the 20 mln sterling pay package of CEO Christopher Bailey, awarded without performance targets. But if the board had been clearer about its underlying reasons, the ride wouldn’t have been as rough.
Imperial prepares $7 bln gamble 11 Jul 2014 The UK tobacco group wants to acquire assets sold following a possible merger of U.S. peers Reynolds and Lorillard. Imperial may win a path to scale in America. But the positive market reaction is too sanguine about balance-sheet strain and the acquisition of low-growth assets.