AstraZeneca implies surrender can be bought 6 May 2014 The UK drugmaker has launched its defence against Pfizer’s $106 bln approach by detailing a portfolio with a potential 73 pct of added sales by 2023. It sounds more like an inventory waiting to be valued than an argument for independence. The chances of a deal have barely fallen.
Tax steroids justify Bayer’s $14 bln Merck deal 6 May 2014 The German pharma giant is paying an eye-watering 21 times latest EBITDA for Merck’s consumer unit. The price is high in the context of achievable cost savings and hoped-for revenue benefits. But the acquisition makes strategic sense and sizable tax breaks will help.
Applus better play it safe with IPO pricing 6 May 2014 The Spanish industrial testing company plans to raise 1.1 billion euros. The sector’s track record is impressive and Applus is growing faster than rivals. But it’s less diversified, and will still be saddled with debt. As such, it deserves a discount.
Rob Cox: Solving America’s homegrown Putin dilemma 6 May 2014 Critics say that Obama’s targeted economic sanctions against some Russian oligarchs smack of appeasement. Yet silence prevails when it comes to a Nevada tax scofflaw surrounded by vigilantes. If the U.S. can’t uphold the rule of law at home, it can have no credibility abroad.
Barclays shows why it needs to do a UBS 6 May 2014 The UK bank saw Q1 fixed-income revenue fall even more than forecast. Its Swiss peer didn’t fare much better, but UBS is already well into a wealth management-focused turnaround. While Barclays has fewer options, its strategic revamp on May 8 needs to be similarly radical.
Alstom’s train future is with Siemens, not GE 6 May 2014 Paris opposes an offer by the U.S. group to buy Alstom’s power business unless the French company gets the American’s transport assets in exchange. That is a barmy idea. What Alstom should try instead is use GE’s money to build a pan-European train business with Siemens.
Mini-me tech bubble is mere shadow of 2000 excess 5 May 2014 The run-up may have paused, but dozens of companies are in line to float, hubris is rampant, oddball metrics abound, and revenue-free startups are still worth fortunes. Even nerd culture has become hip. The latest internet boom is as absurd as the last, but it’s far smaller.
Hugo Dixon: Do national champions merit protection? 5 May 2014 Only when the target is genuinely strategic and the bidder may not have the country’s interests at heart. In other cases, including Pfizer’s bid for AstraZeneca and GE’s acquisition of Alstom’s power business, governments should stay neutral.
ECB easing would be better this month than next 5 May 2014 The central bank last eased policy half a year ago. It can always find excuses to prevaricate longer. The euro rally has paused, rises in short-term market rates have yet to lift longer ones, inflation is inching up. But the economy needs help, and the quicker the better.
Pfizer’s M&A churns out more pennies than pounds 2 May 2014 A $106 bln AstraZeneca bid would deliver savings. But drug mega-deals create little value. Pfizer could’ve bought most of the top biotech firms instead of Wyeth, its last acquisition, and had higher returns. Buying stakes in innovative companies is a preferable route to riches.
Viacom’s UK deal broadcasts hope for old-time TV 2 May 2014 Sumner Redstone’s media giant will pay $757 mln for Britain’s Channel 5. That looks rich for a shoestring free-to-air station known for reality shows and programme imports. But Viacom gets a decent platform for overseas growth. And old-school TV is a show with much further to run.
Pfizer yet to land knockout blow on Astra 2 May 2014 The U.S. drugmaker upped its proposal to $106 bln, and promised to keep some of the UK group’s workforce. It does not look high enough to bring Astra to the table. Worse, Pfizer’s aggressive public tactics may only antagonise shareholders.
UK engagement with Pfizer is irresponsible 2 May 2014 British politicians and scientists want assurances that a takeover of AstraZeneca by U.S. rival Pfizer would be in the national interest. But good UK science requires more than corporate control. A rushed dialogue with a semi-hostile bidder helps neither the target nor the nation.
RBS’ worry-free quarter will be hard to repeat 2 May 2014 The state-owned UK bank’s shares soared 12 pct after first-quarter net profit trebled. But RBS only took a tenth of this year’s restructuring costs to support CEO Ross McEwan’s new strategy, and dividends remain way off. The bank has turned a corner, but there’s a long way to go.
A decade on, some EU values still look strong 2 May 2014 Eight of the 10 countries which joined the union on May 1, 2004 were former communist states. Since then both old and new members have gained, economically and culturally. The EU has proved remarkably strong. But its financial and political values look far less robust.
Review: The UK’s EU choice is safety or adventure 2 May 2014 Should the UK leave the EU? Hugo Dixon, founder of Breakingviews, answers “The In/Out Question” with a firm “no.” He is mostly persuasive, at least for the short term. But he exaggerates potential British influence inside the EU - and may be too grim about Britain’s fate outside.
Astra has small tactical advantage over Pfizer 1 May 2014 Time can benefit bidders rather than targets – that’s why Kraft left Cadbury flailing for months. But uncertainties around regulatory clearance and Washington politics complicate the dynamics of Pfizer’s approach to AstraZeneca. The U.S. group will want a quick, recommended deal.
South Africa needs neighbors’ growth rates 1 May 2014 Two decades after Nelson Mandela became president, the post-apartheid generation will vote for the first time in the May 7 election. The ANC represents his political legacy, but that’s undermined by the party’s weak economic results. Maybe the “Born Frees” can help change that.
BP could be most tempted by BG 1 May 2014 Bid speculation around BG has intensified since the recent departure of the gas giant’s CEO amid fresh operational setbacks. Bigger majors like Exxon or Shell could be interested. BP might have better reasons to buy, though there are hurdles.
Time for an FPC “Draghi moment” on UK house prices 1 May 2014 The ECB president famously eased the euro zone crisis with a pledge to do “whatever it takes.” The UK’s Financial Policy Committee has been too timid about making a similar commitment to restrain booming house prices. Its June meeting is the moment for Draghi-style boldness.