Time Out IPO more fringe than West End 10 Jun 2016 The loss-making events magazine is raising 90 mln pounds on London’s junior market. Its revamp depends on convincing visitors to book tickets on its site, though its track record hasn’t been great so far. Online booking is a crowded field and the price it is asking looks high.
BP wisely chooses growth over control in Norway 10 Jun 2016 The UK oil major is putting its Norwegian business together with Det norske and its majority investor in a $1.3 billion share deal. BP will have a minority stake, but matching its mature assets with Det norske’s growing and efficient operations makes sense.
Vodafone’s $2.4 bln deal makes a bundle Down Under 9 Jun 2016 The mobile giant is injecting its New Zealand unit into local pay-TV operator Sky Network in return for a 51 pct stake. Joining forces should help as phones, television and the internet converge. Vodafone is giving Sky shareholders a helping hand to get the deal done.
Tesco demonstrates the art of the subtle U-turn 9 Jun 2016 The UK supermarket may sell the restaurant chain it bought three years ago to lure customers to its larger shops. It was an experiment that didn’t work. With fierce competition and excess store space, retailers need new ideas. Investors may have to put up with a few wrong turns.
Merger “synergies” can’t just be code for job cuts 8 Jun 2016 Most mega-deals leave companies with fewer staff, and higher sales and profit per head, a Breakingviews analysis shows. That's capitalism. But the mood is changing, at least in pro-market Britain. Synergies do exist, but those reliant on cutting jobs may get harder to realise.
Sterling not done as pre-Brexit whipping boy 7 Jun 2016 An EU exit would be less disastrous for Britain’s stocks and bonds than its currency. Some firms will gain from weaker sterling, and rate cut speculation may support gilts. But foreigners holding these assets are going to hedge FX exposure, piling yet more pressure on the pound.
Dixon: Fiscal union has no place in EU Brexit plan 7 Jun 2016 European politicians’ knee-jerk reaction if Britain votes to quit the European Union will be to integrate further. This would be foolish, provoking a populist backlash. A better response would be to loosen fiscal policy while embarking on bolder economic and market reforms.
Shell puts post-merger momentum to good use 7 Jun 2016 The Anglo-Dutch energy major has added $1 bln to its targeted synergies from merging with gas group BG. The oil price is out of its control and divestments will be tricky, but it’s making good progress on three other fronts: capex, costs and production.
Flighty shoppers keep UK grocers on their toes 2 Jun 2016 Customers still visit Tesco and Sainsbury’s in the same numbers, but not for their entire trolley. A new pick ‘n’ mix approach to shopping shows customers are no longer a captive audience. The challenge for the Big Four is to make a visit to the German discounters less worthwhile
Models are a surprising face for cartel economics 2 Jun 2016 UK competition authorities are investigating price-fixing at London’s top model agencies. Creating a cartel from a market that has apparently low barriers to entry sounds tricky. But setting up a new entrant isn’t that easy – and antitrust tsars only need to prove intention.
OPEC has an oily blind spot over Brexit 2 Jun 2016 Britain leaving the EU would present the cartel with a tricky demand problem. Brexit could slow economic growth in Europe and reduce consumption of crude in the world’s third-largest market for fuel. If that happens OPEC may have to cut output, or risk prices falling again.
LSE-Deutsche Boerse offers jam tomorrow, tomorrow 1 Jun 2016 The two exchanges reckon their merger can create 250 mln euros of new revenue - eventually. But there are plenty of hurdles to delivering the goods, from a potential Brexit to the 20-plus regulatory approvals needed. The inherent slipperiness of boosting sales is a poor lure.
AstraZeneca glitch cements M&A discount 27 May 2016 A blockbuster drug the UK group bought in a $2.7 bln deal has been delayed. The production glitch could mean just a few months holdup, but highlights why Astra trades at a lower valuation than peers. Buying and selling businesses is a risky way to manage a looming patent cliff.
German discounters open new front in trolley wars 27 May 2016 Lidl is investing 6.5 billion euros to soup up its stores, half of that outside Germany; peer Aldi is upgrading too. That will advance their attack on the middle market. If they can do it without raising prices, big rivals like UK grocers Tesco and Sainsbury will be in trouble.
Sterling options market gets the hump over Brexit 26 May 2016 Traders are braced for big sterling swings around the EU referendum and then expect volatility to subside. But true calm may prove elusive whatever happens. Even if Britain votes to stay, there will be enough economic and political uncertainty around to ensure trading is lively.
Debenhams plucks new CEO from arms of its nemesis 26 May 2016 Amazon is the worst thing that could happen to stodgy old department stores. Yet that’s where Britain’s Debenhams found new boss Sergio Bucher. That makes it one of a handful of UK high-street names headed up by a digital ace. The hire sounds odd, but could be inspired.
Bank returns paradox cannot hold 25 May 2016 Why do banks seek double-digit returns when interest rates are so low? The Bank of England is among those wondering. Return expectations may be too high, or banks may still be too risky. Investors don’t appear to care. If they did, banks might face calls to break up.
New M&S boss fashions disappointing revamp 25 May 2016 Turnaround plans unveiled by new chief Steve Rowe have one big wrinkle. His makeover for the UK retailer involves short-term pain but may not solve its main problems - fierce competition for customers and a muddled offering. Bolder thinking is needed in such a tough sector.
Investors may rue framing art as an asset class 20 May 2016 Collectors increasingly see paintings as investments – and collateral. The value of loans secured by art has doubled to $10 bln in four years. Yet as this spring’s big auction downturn shows, the business is volatile. Best to rely on the aesthetic return.
How a $12 bln UK buyout could ring up returns 20 May 2016 Private equity is reportedly circling Telefonica’s local unit after Brussels blocked a sale. That would be one of Europe’s largest-ever leveraged buyouts. The numbers might just add up - if the buyers can get O2 for a reasonable 8.5 bln stg or so, and then lift margins.