Trump and Warren make odd antitrust bedfellows 6 Dec 2017 The liberal senator says mega-deals like Aetna’s $77 bln sale to CVS kill competition. She backs the DOJ fighting AT&T-Time Warner and has concerns about past merger remedies. It puts her in the same camp as the president. Such an alliance of convenience puts pressure on big M&A.
Hadas: The mystery of lost competition 6 Dec 2017 The U.S. tax cut is expected to boost corporate earnings but not lower prices or raise wages. That implies there’s too much tacit collusion for basic economic theory to work as designed. Limited price competition is great for shareholder value, but bad for the economy.
Elliott’s usual playbook is unsuited to Uniper 6 Dec 2017 Paul Singer’s activist fund has a 5.3 percent stake in the German energy group that is being targeted by Finland’s Fortum. Unusually, the buyer may be willing to live with less than full ownership for a while. That could reduce the scope for Elliott to hold the bidder to ransom.
Hedge fund species merit careful classification 5 Dec 2017 Most peg the industry as managing more than $3 trln of assets. But as Winton Capital notes, it’s a broad spectrum, and hedge funds are hard to define. On narrower criteria like fees or the use of leverage they manage far less. The distinctions matter for investors and regulators.
Middling performance nets $500 mln for Aetna CEO 5 Dec 2017 Mark Bertolini’s payday from selling the insurer to drugstore chain CVS stems largely from steady success and not selling shares amassed over the years. Yet Aetna’s performance is nothing special compared to peers. Genius is easy to find when there’s a heavy wind behind a sector.
Cineworld’s $3.6 bln Regal bid runs debt gauntlet 5 Dec 2017 The British cinema operator is raising $4 billion to help finance an offer for its struggling U.S. peer. Combined debt of 4 times EBITDA looks scary given threats to the industry from digital streaming. CEO Mooky Greidinger needs a booming box office to ensure a happy ending.
ICO bust heralds U.S. crypto-currency rules chaos 4 Dec 2017 The SEC has taken its first action against a coin offering, alleging the perpetrators fraudulently raised $15 mln. The CFTC, though, just gave the green light to bitcoin futures. The growing regulatory discord on virtual currencies increases the risks to investors.
Icahn knows a playbook to avoid with SandRidge 4 Dec 2017 As the governance-challenged driller did last week, CVR Energy tried to fend off the activist with a poison pill back in 2012. Icahn ended up bidding for the refiner and still owns 82 pct of it. It’s an experience neither he nor other shareholders will relish repeating.
Facebook targets children with Snap rip-off 4 Dec 2017 Mark Zuckerberg’s outfit is launching a messaging app for kids under 12. It’s a bid to attract a new generation of users by a company struggling to lure youngsters from Snapchat. Yet it’s also a gamble for Facebook. Targeting tweens will invite even closer regulatory scrutiny.
Apple exerts gravitational pull on chipmaker rise 4 Dec 2017 UK-based Dialog lost a third of its value on fears the iPhone maker will build its own chips. Rising sales of smart gizmos have boosted demand for semiconductors, and their makers’ stocks. Rosy valuations downplay the risks for a fragmented sector in a rapidly changing industry.
Broadcom fires board broadside from shaky platform 4 Dec 2017 The chipmaker is nominating 11 directors at Qualcomm, which has rejected its roughly $105 bln unsolicited offer. Only a brave shareholder would replace a board solely to advance a not-yet-financed bid. But the move pressures Qualcomm to engage before its annual meeting in March.
Rushed U.S. tax bill rewards oil, real estate 4 Dec 2017 The Republican Senate plan snuck in tax breaks for oil and gas partnerships, real-estate investment trusts and other sectors. One hiccup puts the research tax credit favored by business at risk. But overall, corporate America and the wealthy may receive an early Christmas gift.
Prysmian’s U.S. cable tie-up is well thought out 4 Dec 2017 The Italian cable-maker is buying loss-making U.S. rival General Cable for $3 bln including debt. The hefty premium is deserved if the buyer can deliver chunky cost savings. In a sector where scale is all-important, the deal helps Prysmian see off European and Chinese opponents.
Consumer groups’ health drive comes at a cost 4 Dec 2017 Germany’s Merck has invited bids for its $4.8 billion Seven Seas vitamins unit. With Pfizer also selling its over-the-counter business, Nestlé and rival consumer giants see opportunities to use their sharper marketing skills. But the health craze comes with pumped-up valuations.
CVS deal reveals high cost of Amazon defense 3 Dec 2017 At $77 bln, the U.S. drugstore chain is paying over the odds to buy insurer Aetna. Identified savings cover only a third of the premium. In time, sending more patients to CVS clinics could lift profit. The plan, however, is more apt to simply stop existing customers from leaving.
New Delhi bowls Rupert Murdoch a bouncer 4 Dec 2017 Star India may be forced to share its $2.5 bln cricket rights with a state broadcaster if the league is deemed of “national importance.” That might score the government some points. For Murdoch, who is fielding interest for parts of his Fox empire, it would be a sticky wicket.
GOP casts principle aside in scramble for tax win 2 Dec 2017 Senate Republicans passed a tax cut plan after last-minute changes papering over deficit concerns and the bill’s tilt to the wealthy. Differences with the House must be reconciled. But an escalating Russian influence probe makes the party even more frantic to claim a victory.
Wall St poised to stop worrying and love bitcoin 1 Dec 2017 Crypto-currencies are set to take center stage. Mike Novogratz is launching a hedge fund, exchanges are teeing up futures contracts, big banks are likely to enter the fray and even the Fed is taking notice. It may end in tears, but the industry won’t ignore a $300 bln market.
Spotify and Tencent make oddly logical supergroup 1 Dec 2017 The Swedish music-streaming service and the Chinese tech giant’s rival unit may swap 10 pct stakes. Tencent gains another trophy asset and access to expertise making users pay. Spotify gets cash and a peek into a huge market. The risk is it muddies already hard-to-price IPOs.
Holding: Bet on Supreme Court to lift gambling ban 1 Dec 2017 New Jersey’s suit to legalize sports wagers makes financial policy sense, but the constitutional argument is stronger. Limits on the feds’ power mean states do their own thing on everything from pot to guns. A court already inclined that way is likely to extend it to betting.