Vodafone’s Dutch Petri dish worth watching closely 4 Feb 2016 The UK mobile giant reported six straight quarters of growth, with Europe improving. Yet more significant is the scope for an elusive deal with cable company Liberty. A possible joint venture in the Netherlands sounds small, but could reveal potential for collaborating further.
AstraZeneca pay contortions get ever more tangled 4 Feb 2016 The UK pharma group may miss the earnings targets Chief Executive Pascal Soriot must meet to get his bonus. But it may adjust Soriot’s goal to reduce the effect of “dilutive” acquisitions. There’s logic to that, but Astra’s accounting gymnastics undermine its rigour on pay.
Glaxo self-help looks better than surgeon’s knife 3 Feb 2016 The UK pharma group has come under pressure to split itself up after weak performance. Latest results show Glaxo is coming to terms with its challenges. A breakup wouldn’t create much value, absent a premium bid. That gives Chief Executive Andrew Witty breathing space.
Europe has as much to lose from Brexit as UK 2 Feb 2016 David Cameron looks set to secure limited concessions from the EU. That reflects the uneven hit to member states’ budget and trade - some countries might even gain from Brexit. But given what it might unleash politically, a sub-par deal is risky for Brussels as well as Britain.
BP’s dividend may become unaffordable 2 Feb 2016 The UK-based oil major is slashing costs, cutting capex and selling assets. But it didn’t manage to make ends meet in 2015 amid tumbling oil prices. Debt is going up. BP can rely on more self-help, but absent a recovery in oil, big payouts to shareholders will be hard to justify.
Sainsbury’s Argos deal checks out 2 Feb 2016 The UK supermarket has bagged Argos owner Home Retail Group for 1.1 billion pounds, a price that leaves it ample room for error. Even if it does no more than cut back obvious overlap, the deal should create value. Both businesses were in a strategic pickle; Home Retail’s was worse.
Bank dark-pool cases deserve harsh light of trial 1 Feb 2016 Barclays and Credit Suisse will pay $150 mln to settle U.S. charges of duping clients in their trading venues. Ending costly probes makes sense, but it’s unlikely savvy investors didn’t know of high-frequency traders and other risks. A court test would clear up some mysteries.
European mobile mergers won’t kill competition 1 Feb 2016 The European Union is reviewing a UK merger between O2 and Three. Other deals are in the works. More concentration raises the spectre of higher bills for consumers. But past tie-ups suggest that’s not inevitable at all.
Brexit index: The “Out” risk is real 1 Feb 2016 Britons are warming to the idea of Britain leaving the European Union, says a new Breakingviews Brexit index. It crunches nine different metrics to show the “Out” camp is gaining ground. The inputs include asylum applications, consumer confidence – and Daily Mail front pages.
UK banks get capital clarity, plus BoE charity 29 Jan 2016 The Bank of England wants the largest UK lenders to hold only a touch more capital to lessen their systemic threat to the domestic economy. Given no big players will be hit badly, it looks like the latest reduction in bank-bashing. But the system also will be less opaque.
Barclays 2008 blessing still has elements of curse 29 Jan 2016 The UK bank’s former adviser Amanda Staveley is suing over aspects of an 11.8 bln stg capital raising. For Barclays, the financial positives from dodging a state bailout outweigh the negatives. But shareholders now also see reputational and ethical issues as more important.
Murdoch’s second season could be good for Sky 29 Jan 2016 Four years after resigning at the height of a phone-hacking scandal, James Murdoch is back as chairman of the pay-TV group. That may rattle minority investors, but Murdoch has proven himself. It would be an odd move if Fox planned to buy the 61 percent of the company it doesn’t own.
Shell/BG vote is a bet on oil prices bouncing back 27 Jan 2016 More than 80 percent of Shell shareholders approved the tie-up with gas group BG on Jan. 27. That implies they think oil will recover to $60 a barrel, twice its current level. Cost savings help support the deal, but it still requires an optimistic frame of mind.
RBS bad news is actually a small positive 27 Jan 2016 The state-owned UK bank has pre-announced a host of charges that will deplete capital and knock 2.5 bln stg off earnings. But RBS has a buffer. The closer it gets to addressing its main uncertainty – U.S. mortgage litigation – the closer dividends and reprivatisation will look.
UK takes middle road with new bank conduct tsar 26 Jan 2016 Andrew Bailey, new head of the Financial Conduct Authority, is likely to be less antagonistic towards the financial firms he polices than predecessor Martin Wheatley. His record on bank pay suggests he can be tough when needed, but his appointment looks largely pragmatic.
Brexit trial run gives glimpse of post-vote mess 26 Jan 2016 With the focus on UK efforts to renegotiate relations with Brussels, less attention is going to what might happen if Britons did actually vote to leave the European Union. A wargame in London featuring former EU politicians gave a hint. Investors may want to cover their eyes.
Google UK tax truce more significant than it looks 25 Jan 2016 The search engine will pay 200 mln pounds in UK taxes for a decade in which it made 24 bln pounds in revenue. Google could have paid 10 times the tax based on profit margins elsewhere. But this is a sign that, however slowly, international standards are changing cosy habits.
UK business faces its own In-Out dilemma on Europe 21 Jan 2016 The British prime minister wants companies not to “hold back” on Britain’s future in Europe. Such a call must be heeded with caution. If the pro-EU debate hinges on what’s good for business – or even worse, the City – it may backfire.
Pearson buys some time with latest shakeup 21 Jan 2016 The educational publisher’s shares gained 10 pct on the back of a big restructuring plan despite a warning that earnings would suffer this year before stabilising at the end of 2017. The post-FT reality check is welcome, but it’s far from clear Pearson can return to growth.
London’s Magic Circle invites U.S.-style danger 20 Jan 2016 Freshfields is the latest member of the city’s legal elite to create more second-class partners. Stars get bigger pieces of the pie, ensuring they don’t defect to richer rivals. That can lead to resentment from other lawyers. Defunct Dewey showed how the pay gap causes trouble.