Wilbur Ross deflates Trump’s rich cabinet 8 Nov 2017 The president tapped wealthy execs for their supposed smarts and dealmaking skills. News that the U.S. commerce secretary may have been less than truthful about his holdings and net worth undermine that argument. The blowback may give pause to other wealthy pretenders to high office.
U.S. watchdog bares unexpected teeth on AT&T deal 8 Nov 2017 The telecom firm may have to sell Time Warner’s cable unit with CNN to win approval of the $85 bln tie-up. The Trump administration had been expected to go easy on big M&A. If the Justice Department is taking a tougher stance, corporate America will need to rethink strategy.
Yahoo ex-boss shows everyone’s in dark on hacks 8 Nov 2017 Marissa Mayer told senators she still doesn’t know who was behind a 2013 data theft affecting 3 bln users. Equifax’s CEO said the same of a breach involving 145 mln consumers. And Congress struggles to draft cyber rules. Amid such cluelessness, the epidemic can only get worse.
Disney CEO risks poorly scripted final act 8 Nov 2017 Bob Iger has given investors a 400 pct total return in 12 years atop the House of Mouse. Now he’s mulling running for office and a bid for bits of Fox, is late to the video-streaming party and as yet has no successor when he steps down in 2019. It’s hardly a Magic Kingdom.
Akzo Nobel-Axalta merger is a hostage to history 8 Nov 2017 A proposed blend of the two paint makers could produce colourful cost savings. That must mean job losses – and Akzo is the less efficient. Yet the $23 bln Dutch group deflected a bid from PPG saying cuts were a no-go. It’s hard to see how it could do the requisite U-turn now.
Tencent and Snap send short message to Facebook 8 Nov 2017 The owner of China’s killer app WeChat now owns 12 pct of its struggling vanishing-photo peer. Even though the shares are non-voting, Snap has reason to embrace a powerful new friend. And Tencent will be slightly better positioned should Facebook get an entry visa from Beijing.
China’s Sina fires up governance Wayback Machine 8 Nov 2017 Days after escaping a board insurgence effort, the web outfit issued new stock that hands control to its chairman. It retroactively aligns Weibo's parent with Silicon Valley structures just as momentum swings against them. It's a bad turn for China Inc that also cost $500 mln.
Snap performs the wrong disappearing act 8 Nov 2017 The vanishing-message app's parent missed third-quarter estimates, more than tripled the red ink, took a charge on a flailing product and disappointed on user growth. With bigger rivals dominating the ad market, Snap and its toothless shareholders have little up their sleeves.
Congressional stick may beat Trump’s China bombast 7 Nov 2017 The president has talked tough about punishing the nation’s largest trading partner, but mostly avoided measures like tariffs. Now some U.S. lawmakers want to make it hard to buy American companies. Such bipartisan legislation poses a bigger risk to Beijing than the White House.
BP offers window into slippery pipeline valuations 7 Nov 2017 The oil giant recently seized on an uptick in oil prices to list pipeline assets, but its shares have disappointed. One problem is the fact it's so dependent on BP. But given recent issues, investors are also wise to be cautious about pipeline operators' balance sheets.
Lycra is stretch project for China’s budding LVMH 7 Nov 2017 Shandong Ruyi snapped up the sporty fabric brand from a subsidiary of Koch Industries for more than $2 billion. That advances the firm’s quiet aim of becoming China’s Louis Vuitton. While less bold than moves by other Chinese conglomerates, it just might work.
Broadcom grows its way to strategic dead end 7 Nov 2017 The acquisitive chip company has become so big that it needs to take larger and riskier bets to maintain its super-charged expansion. Its $130 bln unsolicited offer for Qualcomm qualifies on both counts. If successful, Broadcom will be short of targets that can move the needle.
Bill Ackman is losing his touch 7 Nov 2017 Fewer than one ADP shareholder in four backed the activist's bid for board seats at the payroll processor. That puts his Pershing Square hedge fund on a three-year losing streak after failed bets at Valeant and Herbalife – and makes it easy for other firms to ignore his demands.
NXP is key piece in $105 bln chipmaker jigsaw 7 Nov 2017 If Qualcomm wants to fight an unsolicited offer from Broadcom, one logical move is to complete its own $38 bln deal for automotive chip specialist NXP. A year later, that price looks low. Qualcomm now has a double reason to raise it – but the timing is out of its hands.
Disney-Fox mashup would truly be over the top 6 Nov 2017 The company led by Bob Iger is mulling buying Rupert Murdoch’s film studio and cable assets, CNBC reported. A deal would reduce Fox to news and sports while helping Disney bulk up to fight Reed Hastings' Netflix. It suggests nothing is too outlandish in a streaming world.
Broadcom deal cements boutiques’ M&A takeover 6 Nov 2017 Moelis is heading up the chipmaker’s $105 bln Qualcomm bid. It’s not the largest transaction an independent adviser has led, but it’s striking for one so dependent on financing. With smaller firms now prominent in most big deals, the bulge bracket risks becoming just dumb money.
Broadcom lenders shed prudence just as it’s needed 6 Nov 2017 The chipmaker’s advisers are “highly confident” of arranging finance for its $105 bln Qualcomm bid. Ample liquidity, low defaults and easing regulations have banks itching to lend. But rising corporate leverage and looser covenants pose big risks for anyone coming to the dance.
New York Fed needs a new boss with teeth 6 Nov 2017 William Dudley is set to retire as president of the regional watchdog, which has day-to-day oversight of large lenders like Deutsche Bank and Goldman Sachs. As Washington leans toward deregulation, Dudley’s successor will be the first line of defense in ensuring banks behave.
Broadcom faces down ghost of chip LBOs past 6 Nov 2017 The $111 bln soon-American-again chipmaker offered $105 bln for Qualcomm. If the unsolicited bid goes anywhere, borrowing nearly $90 bln would send debt-to-EBITDA ratios towards leveraged buyout territory. Two former chip LBOs – Freescale and NXP – give pause for thought.
SoftBank pace should endure after Sprint stumble 6 Nov 2017 Boss Masayoshi Son ditched a deal between his U.S. mobile operator and rival T-Mobile US, losing out on some $10 bln in synergies. SoftBank investors have two solid consolations: a long-term case for keeping control of Sprint and a slew of investments at the $98 bln Vision Fund.