United Kingdom

Smaller banks pose big problems for regulators

12 Oct 2023

Britain’s Metro Bank came close to the brink, while several US regional players failed earlier in 2023. In this Viewsroom podcast, Breakingviews columnists debate whether watchdogs have the right tools to deal with such situations, and whether they’re brave enough to use them.

Apollo may get noodle LBO thrown back in its face

12 Oct 2023

The buyout group could gobble up the UK-listed owner of the Wagamama chain for $862 mln. It looks like a good deal for the acquirer. Apollo’s decision to drop its John Wood takeover this year shows it’s no soft touch, but investors can still hold out for a better dish.

Metro deal is a model of sorts for bank watchdogs

9 Oct 2023

The UK lender’s self-help plan refinances 350 mln pounds of debt that regulators force it to have. Arguably those rules caused the recent panic, but they also act as an early warning system. US supervisors mulling a similar approach may see enough positives to press ahead.

The Queen’s question returns with a vengeance

6 Oct 2023

‘Why did no one see it coming?’ the late British monarch asked economists during the 2008 financial crisis. Applying the same query to resurgent inflation is even more awkward for central bankers. There are multiple answers, but no magic solutions, says Felix Martin.

Big Four scandals will derail breakup plans

5 Oct 2023

EY and PwC are dealing with issues in their tax and consulting units. In this Viewsroom podcast, Breakingviews columnists explain how falling valuations of rivals like Accenture as well as questions about the stability of consulting fees will mean these firms may stick together.

Metro Bank’s fortunes depend on its bondholders

5 Oct 2023

The ailing UK banking upstart urgently needs more capital. One option is to buy back bonds worth 600 mln pounds that trade far below face value. Given the threat of regulators wiping them out, holders may prefer to sell. That would also give Metro more time to find a new owner.

Telegraph contenders have three boxes to tick

3 Oct 2023

Suitors are eyeing the UK newspaper, which lender Lloyds recently seized and may now sell for up to 600 mln pounds. The best bid will have a high valuation, a good chance of gaining regulatory approval and solid financial backing. None of the approaches so far offer all three.

Big Four consulting stains muddy breakup case

2 Oct 2023

EY and PwC are under scrutiny amid a tax scandal and accusations of shoddy work. The case for splitting these companies depended on their advisory arms delivering racy growth. But with dinged reputations and valuations of rivals falling, breaking up will be even harder.

Covid tester buyout hands investors a bitter pill

29 Sep 2023

Cinven is buying back Synlab after floating it just two years ago. Acquiring the German group at a 44% discount to its IPO price is nice for the buyout shop, but hard for investors to swallow. Either way, it reflects ebbing demand for health checks as inflation soars.

To fix Britain, Labour will need new debt rules

29 Sep 2023

Tight fiscal curbs leave PM Rishi Sunak with no room for tax cuts or investments in the likes of rail link HS2. If Labour wins an election likely in 2024, it could hike spending via a broader metric based on the UK balance sheet. That could spur growth without spooking markets.

Entain’s troubles may entice MGM into a fresh punt

25 Sep 2023

Shares in the $8 bln gambling firm fell 10% after an unexpected sales warning. An Australian slowdown and regulatory heat in the UK, its biggest market, are tricky to fix. But the more Entain’s stock sinks, the more $13 bln MGM may consider renewing its dormant bid interest.

Permira will have to work to exit classified hole

22 Sep 2023

The buyout firm has teamed up with Blackstone to take Norway’s Adevinta private. Its initial outlay in 2021 is under water after a tech downturn battered the $11 bln company’s valuation. Permira’s hopes of a decent return rest on turbocharging sales and tangibly hiking margins.

Listing duo offers followers a cautious playbook

21 Sep 2023

Chip designer Arm and grocery delivery company Instacart have secured relatively successful stock launches, offering hope of a wider reopening of the IPO market. In this Viewsroom podcast, Breakingviews columnists explain how cornerstone investors and lowly valuations helped.

Central banks start game of chicken over rate cuts

21 Sep 2023

Officials in Sweden and Norway hiked borrowing costs, while their British peers didn’t. All hinted policy will stay tight, fearing that stoking expectations of an early start of the loosening cycle may fuel inflation. An economic slowdown may prompt rate-setters to be less tough.

Britain is tossing aside its last green trump card

20 Sep 2023

PM Rishi Sunak may defer UK targets for electric vehicles and eco-friendly houses. Juicy US subsidies had already dented Britain’s claims to net-zero leadership, but political backing was a clear signal for green investment. Watering that down is an act of financial self-harm.

Sunak and Bailey agree on higher UK rates, for now

19 Sep 2023

The PM and the Bank of England chief both favour raising borrowing costs in the short run to curb price growth. But their paths may soon diverge. Downing Street would love easier monetary policy before an election in late 2024. The BoE cannot relent until inflation hits 2%.

Big oil lawsuits are riskier than quitting tobacco

18 Sep 2023

California is suing fossil-fuel companies, alleging tens of billions in climate-related damages. Decades of litigation forced tobacco firms to pay up. The tension is that, while global warming’s ravages imply higher costs, US oil production is crucial amid tightening supply.

Less ethical US foreign policy requires new logic

18 Sep 2023

When Joe Biden took office he promised to put human rights at the heart of international affairs. The president is now cosying up to regimes like Vietnam to contain China and build new supply chains. That makes sense, but Biden should explain his approach better, says Hugo Dixon.

AstraZeneca succession sickness demands urgent fix

15 Sep 2023

The drug giant’s shares lost $9 bln after a report that Pascal Soriot will retire next year. His track record of drug discovery, savvy dealmaking and a 448% return since 2012 suggest investors are right to be worried. A clearer plan for his replacement would help.

Lazard’s new CEO dares to evoke Bruce Wasserstein

14 Sep 2023

Peter Orszag aims to double revenue to about $5 bln by 2030 while delivering at least a 10% annual shareholder return. The firm’s recent history suggests the plan is bold. But it’s as good a time as any to heed the advice its former boss famously gave clients: “Dare to be great.”