Labour to gain from "follow the money" UK voting 24 Apr 2015 People vote with their wallets. The governing Conservative coalition may earn credit for presiding over five years of low interest rates and a strongish pound. But a Breakingviews calculator suggests a weaker record on growth, house prices and stocks could swing votes to Labour.
AstraZeneca’s reliance on one-offs is unsettling 24 Apr 2015 The pharma group managed to beat expectations in Q1 despite wrestling with patent expiries. One-off disposals of $309 million helped boost operating profit to $1.8 billion. Raising funds makes sense at a time when Astra is challenged, but investors shouldn’t rely on them.
Tesco’s new beginnings are a long way from the end 22 Apr 2015 Last year’s 6.4 bln stg pretax loss shows the size of the problems at Britain’s biggest grocer. A 45 pct share price rebound since December reflects hope that Dave Lewis, the newish CEO, will restore the retailer’s former glory. Investors are taking a great deal on trust.
Scottish nationalists could help UK economy 22 Apr 2015 The regional party may end up in a coalition government after the May election. The SNP’s unrealistic economics in the campaign for independence point to disaster. But the party’s newest utterances suggest something better, including a brake on austerity fundamentalism.
Alliance Trust can do more to fend off Elliott 21 Apr 2015 The Scottish investment trust’s fight with Elliott Advisors has turned ugly. Embattled CEO Katherine Garrett-Cox has criticised the U.S. activist but barely parried its criticisms. Copying some of Elliott’s ideas - and tweaking her pay - would be a smarter defence.
Hugo Dixon: Tories and Labour are almost twins 20 Apr 2015 There’s not much to choose between the two main UK political parties’ economic stances. Both want to cut the deficit slowly, splash out on the NHS, and have some silly policies. The big difference is Labour would tax the rich more and the Tories might take Britain out of the EU.
Cable giant takes new tack in Belgian telecoms 20 Apr 2015 Liberty Global’s Telenet arm is buying KPN’s unit in Belgium for 1.33 bln euros. Paying eight times 2015 EBITDA for BASE looks good value for the buyer given the scope for savings. Moving into owning mobile assets is also an important shift for John Malone’s group.
British housing fetish has a bad global whiff 17 Apr 2015 Ruling Conservatives want to help more Britons buy their own dwellings. In global terms, UK home ownership isn’t especially high, but decreasing rentals is a foolish political objective. Making it one – especially with measures that just stoke demand – is irresponsible.
Biggest UK election issue rests on euro instincts 13 Apr 2015 Little of substance separates Britain’s two big political parties. Oddly, the leftists speak of low taxes and fiscal caution. In-power Conservatives talk of commitment to the state-run health service and schools. For investors, the most important difference is over Europe.
Shell-BG bargain evaporates on closer look 13 Apr 2015 The target’s shares are trading at a tantalising 10 pct discount to Shell’s bid. That suggests a big arbitrage opportunity. In fact the gap is explicable: this is a year-long deal that must jump many hurdles, and Shell’s owners will get more dividends in the meantime.
Hugo Dixon: Squaring the UK’s non-dom tax circle 13 Apr 2015 Current rules give some rich people an unwarranted tax break. But Labour’s plan to reform the system for those living in Britain with “non-domiciled” tax status could deprive the country of valuable talent. New levies on non-doms’ UK residences would bring a fair compromise.
Low gilt yields mask UK election fears 10 Apr 2015 British bond prices might suggest investors are phlegmatic about the too-close-to-call ballot. Yields are actually lower than at the start of 2015. But tepid demand at auctions and declines in foreign holdings tell a different story. Many who have a choice are eschewing gilts.
Apax funding IPO would have awkward precedents 10 Apr 2015 The private equity giant wants to float a vehicle that would invest in its buyout funds, according to a report. The timing is good: investors are hungry for alternative assets and Apax deals have done well. Still, listed PE units like this have a chequered past in Europe.
SocGen hints at end to bank commodities exodus 10 Apr 2015 The French bank is acquiring energy and metals trading positions from Jefferies. Higher capital charges and deleveraging have seen peers, apart from Citi and Goldman, shrink their activity. But clients still need to hedge exposures – and business may slowly be ticking up.
Shell’s BG pounce puts major rivals on the spot 8 Apr 2015 The energy giant’s $70 bln swoop on its UK competitor may draw counterbids from Exxon or BP. The former hinted it’s open to a mega-deal, and the latter needs to get bigger and dilute exposure in Russia. BP could even be a target, though Conoco and Anadarko make easier prey.
BG board has reasons to cut CEO’s $48 mln payout 8 Apr 2015 Helge Lund faced a pay controversy before he even joined the British firm. After Shell’s $70 bln takeover, he could be tens of millions richer. Lund only just arrived, he won’t stay post-close, and he didn’t craft the deal. BG might at least trim his reward to match his tenure.
Shell could win from bold $70 bln swoop on BG 8 Apr 2015 The oil major is offering a fat 50 pct premium for its UK rival. But the share price was depressed and the synergies are attractive. The deal could prove a smart and opportunistic way to boost growth via deepwater assets and liquid natural gas – provided Shell keeps costs down.
Shell-BG highlights rise of the micro-boutiques 8 Apr 2015 The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.
Taking on UK non-doms is good politics –and policy 8 Apr 2015 A tax loophole for the footloose rich should be an easy target for a centre-left opposition. But Labour is only now saying it plans to clamp down on “non-domiciled” residents. If the time is finally right, then Chancellor George Osborne missed an easy win.
Royal Dutch Shell and BG open mega-deal pipeline 7 Apr 2015 The $200 bln energy giant is in advanced talks to buy its $46 bln gas rival. It could be an opportunistic move for Shell, whose vulnerable target has a new CEO. There could yet be other suitors for BG. Any deal is also bound to kick off other big transactions in the sector.