Consumer goods giants shield their defensiveness 14 Apr 2016 Unilever and Nestle are selling more goods, but prices aren’t rising as fast. Demand everywhere is weak. Yet valuations for such defensive stocks have soared. Dividends that are stable or keep rising - like Unilever’s - are the best insurance policy against reality setting in.
Tata Steel faces European debt conundrum 13 Apr 2016 Two thirds of the steel giant’s $9.7 bln of net debt is attached to its ailing European business. That is complicating its efforts to extract itself from the disastrous purchase. Even if Tata can offload the assets, it’s hard to see how creditors will avoid sharing the pain.
One thing Tesco doesn’t stock is pricing power 13 Apr 2016 Same-store sales and operating profit are rising, but prices on the UK grocer’s shelves keep falling. It’s a problem for rivals too. Tesco used to be dominant in a concentrated market; now it’s just plain big. Consumers’ gain will be investors’ loss for the foreseeable future.
Bollore stake boosts Fnac’s Darty bid in two ways 12 Apr 2016 The Vivendi chief is buying a 15 pct stake in struggling French CD and book seller Fnac. That gives the retailer more cash to up its 660 mln pound bid for Darty. Speculation about what the billionaire has in mind should boost the value of the shares Fnac is offering Darty too.
Alibaba’s $1 bln Southeast Asia buy tests limits 12 Apr 2016 The Chinese e-commerce giant is taking control of upstart Lazada in its largest overseas deal to date. Countries like Indonesia and Malaysia offer new growth. But widening losses and fierce competition mean expansion is not cheap. It also dilutes Alibaba’s asset-light model.
Hutch’s bid for O2 is down but not yet out 11 Apr 2016 Hutchison’s bid for Telefonica’s O2 network has been effectively rejected by Britain’s competition authority. The pair’s joint ventures do complicate post-deal concessions. But an assumption that UK prices would rise can be questioned, and ultimately it’s Brussels’ call.
Yahoo could be good home for sidebar of shame 11 Apr 2016 The parent of scandal-peddler Daily Mail may bid for the U.S. media group. That could catapult the MailOnline onto ad buyers’ agendas. Since owner Viscount Rothermere has spent a decade diversifying away from news, the best deal might be one that breaks the UK group up.
Review: Stop blaming the world’s central bankers 8 Apr 2016 That’s the message of a new book, “The End of Alchemy”, from the former governor of the Bank of England, Mervyn King. It doesn’t completely wash. Low rates bear much responsibility for seeding the financial crisis - and it was central banks, after all, that set them.
Credit Suisse wise to flaunt Brexit neutrality 8 Apr 2016 The Swiss bank has banned staff from events and debates tied to the UK’s EU referendum. Overt partisanship might have unnerved some Credit Suisse clients. As Switzerland renegotiates its own trading terms with Europe, Brexit impartiality also makes sense for its domestic banks.
How to dodge pitfalls of market Brexit signals 7 Apr 2016 Currency, bond, stock and credit markets reflect investors’ concern that Britain could leave the EU, but the links aren’t simple. Price signals will become purer closer to the June 23 referendum. Before then, interpreting their message requires a bit more care.
The British Museum should ask for more from BP 7 Apr 2016 Climate change activists are protesting against the London institution’s sponsorship from the oil group. For the museum, the cost of accepting patronage has risen. More to the point, BP pays less of its annual pre-tax profit in charitable giving than FTSE 100 peers on average.
Canada buys its way into Glencore’s sweet spot 6 Apr 2016 The Canada Pension Plan is to buy a 40 pct stake in the Swiss trader’s agricultural business. The financial returns, at first glance, look pedestrian. But the Canucks get access to Glencore’s wheeler-dealing skills, without having to share in its $26 bln group debt pile.
Dixon: Greece’s problems could become Britain’s 4 Apr 2016 If the IMF and the EU can’t quickly resolve their conflict over Greece’s bailout, graphically highlighted by a WikiLeaks transcript, Athens could run out of cash in July. The sense of crisis would mount in the preceding weeks, just as the UK votes on whether to stay in the EU.
New M&A marriage vows raise cost of fooling around 31 Mar 2016 Markit must ensure the CEO of merger partner IHS gets the top job or risk breaking the combined company’s bylaws. AbbVie gave the boss of Pharmacyclics similarly ironclad rights. A rise in stock deals is forging stronger prenuptial agreements for so-called social issues.
Bickering ad men promote more women than tech does 31 Mar 2016 A discrimination lawsuit at a WPP unit has led boss Martin Sorrell to trade barbs with Publicis CEO Maurice Levy over women’s advancement. Both firms, though, do better on gender equality at senior levels than Facebook or Google. That’s a rare edge over their new rivals.
Europe’s IPO market has ladders as well as snakes 31 Mar 2016 Issuance is at a seven-year low, but those new stocks that have listed this year are up 9 pct on average. Better conditions now should allow more companies to come to market. But the UK’s EU referendum and the U.S. election suggest the window for IPOs will open only briefly.
Pensions not steel are Tata’s big UK headache 31 Mar 2016 The Indian group’s British plants have issues, but could be rendered profitable. The bigger challenge is funding shortfalls in its pension scheme for 130,000 members. If a new acquirer could find a workaround and new investment, British steelmaking could still work.
Banks on Brexit: deeds count more than words 30 Mar 2016 Bank of America Merrill Lynch’s B-word ban is the latest sign global financial firms are tying themselves in knots over the UK’s European Union referendum. If big banks want to keep the union, silence is helpful. But a better plan is to hire more people outside London.
Tata Steel is wise to play to its home advantage 30 Mar 2016 The Indian steelmaker may sell all of its UK business. Weak local demand and a flood of cheap Chinese imports make Tata’s European arm much less attractive than its domestic operations. M&A at home may also prove more profitable than the ill-fated 2007 takeover of Corus.
British steel is sad lesson in why price wars fail 29 Mar 2016 The Port Talbot plant probably can’t survive in a world flooded with cheap Chinese steel. Yet it has hung on stubbornly long. Across markets like iron, oil and steel, the idea that price wars drive high-cost suppliers to the wall is proving more complicated than once thought.