Activist adds teeth to Ericsson’s turnaround 31 May 2017 Cevian has taken a 5 pct stake in the Swedish telecoms-kit maker. Boss Borje Ekholm’s strategy of slimming down and boosting margins is sound, but lacks credibility as he was on the board when things turned sour. It can’t hurt to have a big investor breathing down his neck.
ChemChina creates new strain of LBO funding 26 May 2017 The chemicals giant is refinancing the debt backing its $44 bln purchase of Switzerland’s Syngenta. This involves less equity than a typical leveraged buyout, and $18 bln of perpetual bonds sold to three Chinese entities. This is M&A finance cross-bred with government policy.
Glencore food binge could leave investors hungry 24 May 2017 An offer to merge with U.S. agricultural trader Bunge has strategic vision but lacks obvious financial returns. A full acquisition could cost the Swiss group’s food unit at least $15.3 billion, and that could affect Glencore’s ability to pay dividends later.
Jump at Bunge shows Glencore has its M&A mojo back 24 May 2017 The commodity giant's agricultural arm approached the $11 bln U.S. grain trader about a friendly deal. A takeover may not be the goal, and Bunge is cool on a tie-up. But after some tough balance-sheet repair, Ivan Glasenberg’s trading powerhouse is clearly back on the offensive.
Clariant-Huntsman tests formula for big M&A 22 May 2017 The $14 bln Swiss-American chemicals merger stacks up strategically, is fairly priced and could create $2.6 bln in post-tax savings. Yet the market initially factored in only half of the upside. The unpredictability of antitrust vetting and U.S. politics may explain the gap.
Western banks are a poor home for Asian billions 16 May 2017 If sovereign funds are meant to generate superior returns over generations, the sale of UBS shares by Singapore’s GIC is logical. Banks’ futures are clouded by technology, disintermediation and populism. Those still building stakes, like China’s HNA, may have other goals in mind.
Richemont’s downsizing is worth copying 12 May 2017 The Swiss luxury watchmaker’s full-year sales disappointed and margins are now touching financial crisis lows. At least chair Johann Rupert has recognised the need to shrink. It’s an example that others like Prada would do well to follow.
Credit Suisse bonus vote exposes two problems 28 Apr 2017 Two-fifths of shareholders at the bank’s AGM rejected its short-term bonuses. Yet 91 pct approved the reappointment of Chairman Urs Rohner. Credit Suisse lacks two things a good company needs: a chair who holds the CEO to account, and investors who kick up a fuss if he doesn’t.
UBS valuation lead over Barclays looks too wide 28 Apr 2017 The Swiss bank trades at 1.3 times tangible book value, while its UK peer languishes at 0.7 times. First-quarter results, which saw UBS beat expectations and Barclays disappoint, support investors’ logic. But Barclays is on the mend, while wealth management is not trouble-free.
Abu Dhabi cure has limits for Mediclinic investors 27 Apr 2017 The emirate has thrown a sop to citizens by agreeing to pay more of their healthcare costs. That's good for local hospital operators like UK-listed Mediclinic. But a near-20 percent jump in its share price looks exuberant. Abu Dhabi may try to recoup its money in other ways.
Credit Suisse’s Thiam picks capital over returns 26 Apr 2017 The bank’s CEO has rightly opted to raise $4 bln in a rights issue, ditching a plan to list its Swiss unit. Strong first-quarter earnings mean he is doing so from the front foot. But an uncertain outlook poses questions over when Credit Suisse can make an economic profit.
Credit Suisse pay retreat puts chairman on spot 18 Apr 2017 The Swiss bank has bowed to investor pressure by proposing cuts to 2016 bonuses awarded last month and a cap on payouts for this year. New say-on-pay rules necessitated the climbdown. The episode shows an embarrassing lack of foresight by the board and Chairman Urs Rohner.
Activism prods GAM in right direction 18 Apr 2017 The Swiss hedge fund group will review compensation and cap its CEO’s pay because of pressure from investor RBR. The activist’s more disruptive plans may not win backing from other investors. But it can claim credit for forcing change in an industry resistant to shakeups.
Credit Suisse raid jabs at private bank model 3 Apr 2017 The Swiss bank has stressed zero tolerance for tax evasion after authorities swooped on three offices. Credit Suisse may be scrupulous, but managing money for the wealthy brings certain recurring risks – not least because of Swiss private banks' historic pledge of utter secrecy.
Credit Suisse CEO payout is undeserved 24 Mar 2017 The Swiss bank is awarding boss Tidjane Thiam $12 mln for 2016, despite its $2.7 bln loss and a potentially dilutive capital raise. Thiam has done well on costs and solvency. But whatever the board says, he initially mangled the bank's strategy and thus its reputation.
Latam tax amnesties test private banks’ stamina 6 Mar 2017 Latin American countries are finding that tax forgiveness programs can bring billions in hidden assets into the open. UBS and Credit Suisse are discovering that the process can cause chunky asset outflows. Moving onshore could help the Swiss giants retain their share of the pie.
GAM offers modest change for big challenges 2 Mar 2017 Under attack from an activist, the Swiss fund manager has shaken up its board. Chairman Johannes de Gier will be replaced by director Hugh Scott-Barrett. That may not be enough to placate shareholder RBR. The bigger issue, though, is that clients are still pulling funds.
Fund cannibalism is a chewy meal for activists 27 Feb 2017 Asset manager GAM has been urged to shake up its board by an activist fund. The Swiss group’s performance and governance make it vulnerable, but fund managers are tricky targets: the industry's fee structure is challenged, costs are high, and regulators demanding.
Korea fraud electrifies case for ABB spinoff 22 Feb 2017 The Swiss group suspects its South Korean treasurer helped steal $100 million. Fraud equivalent to a fifth of 2015 local sales was only uncovered after the executive absconded. This plays into the hands of activist investors who wanted ABB to become less complex.
Nestle tweaks its recipe, gingerly 16 Feb 2017 The KitKat-maker's formula has for years been: miss targets, sacrifice profit to boost revenue, and serve up an uneasy mix of healthy fare and junk food. New boss Ulf Mark Schneider is starting to tackle the first two. He could shake things up further - if he has a free hand.