VW scandal fuels investor fears about environment 13 Oct 2015 Shareholders managing some $1 trln in assets are pushing the biggest carmakers to disclose how emissions rules affect their businesses. The investors also want to know about the companies’ links to regulators. It’s another sign of how climate issues can sometimes take the wheel.
Rob Cox: VW needs an eight-step recovery plan 13 Oct 2015 That’s the minimum number of constituencies the $68 bln carmaker, snagged in a giant engineering deception, must now mollify to restore credibility. Customers, investors, suppliers, dealers, governments, unions, staff and ordinary people each will require a unique approach.
Hef’s cover-up exposes magazine industry softness 13 Oct 2015 Playboy is to stop publishing pictures of nude women and focus on journalism to try to boost sagging readership. But print industry ad revenue is down 30 pct since 2000 and competition is fierce. The notion that more men really will read Playboy for the articles could be a tease.
AB InBev must change spots to make SAB deal work 13 Oct 2015 Having won its UK rival’s agreement to merge, the Budweiser brewer now gets to put its fearsome talent for cost-cutting to work. But that may not be enough. AB InBev will need to create growth and court governments to make the $104 bln bid stack up. Those are different skills.
President Bernie Sanders would dig an $8 trln hole 12 Oct 2015 The socialist U.S. candidate would shake up the economy with dramatically more government spending. But promises from free college tuition to a government health system would cost more than $12 trln over a decade – far short of additional revenue, like a Wall Street trading tax.
Sergio Marchionne revs pre-IPO Ferrari to the max 12 Oct 2015 The Fiat Chrysler boss has cranked up margins at the sports car firm, which he chairs. That could help justify a near $10 bln market cap and a bumper multiple. The need to keep the investment tank full and get the top line growing, though, may mean margins and the valuation fade.
Couch-sports on TV could be whole new ball game 12 Oct 2015 U.S. cable network TBS is starting a competitive videogame league with talent agent William Morris in a bid to build on the power of live programs. With online viewership for “League of Legends” battles already on a par with events like soccer’s World Cup, it may be a big score.
AB InBev makes an offer SABMiller shouldn’t refuse 12 Oct 2015 Budweiser’s parent has made a fourth proposal for the UK-listed brewer at some $103 bln. The cash-and-shares bid is 42 pct above SAB’s stock price before the latest approaches were made, and comes at nearly 15 times last year’s EBITDA. It is just about time to say “I do.”
EMC investors get $67 bln ticket out of trouble 12 Oct 2015 Michael Dell and others are paying $33 a share for the tech conglomerate. Sure, most of the notional 38 pct premium comes as a flaky tracking stock in EMC sub VMware. But there are no other obvious bidders and breaking up the company is a risky alternative for only slight gains.
Dell takes $67 bln EMC challenge out of public eye 12 Oct 2015 The PC maker has deleveraged since going private in 2013. That’s also how it plans to handle the disk storage firm after adding debt to buy it. A waning EMC core business, a need for revenue synergies and other twists make this another deal best tackled behind closed doors.
Review: Steve Jobs, both man and machine 9 Oct 2015 A new Hollywood biopic directed by Danny Boyle provides a glossy, fictionalized yet revealing glimpse of the human being behind Apple’s iconic products. A recent documentary has a harder critical edge. Four years after his death, Jobs’ flawed genius defies categorization.
U.S. consumers are more than just Sunday drivers 9 Oct 2015 Lackluster jobs and GDP estimates hint at a possible bump in the recovery. Contrary to earlier suspicions, however, Americans are spending most of their cheap gas windfall, a JPMorgan think tank reckons. It means the oil price may be an even bigger economic factor than expected.
Elon Musk whistles past Tesla’s graveyard 9 Oct 2015 Apple poached engineers from the electric-car maker. CEO Musk dismissed the threat, saying: “If you don’t make it at Tesla, you go work at Apple.” His ventures are impressive, but Michael Dell and Steve Ballmer, among others, can attest to the perils of underestimating Apple.
Aggressive AB InBev risks joining sorry M&A club 9 Oct 2015 The Bud brewer is as close to a hostile bid for SABMiller as possible without formally going directly to shareholders. About half of big, unsolicited, cross-border deals eventually close. The results, however, are often disastrous, as Vodafone, RBS, Mittal and others can attest.
The Devil’s Dictionary of Post-Crisis Finance 9 Oct 2015 Ambrose Bierce wrote “The Devil’s Dictionary” a century ago, ranging acerbically across government, commerce and life. Breakingviews’ original re-use of the form for finance – in 2007, when the crisis was barely beginning – is no longer adequate. Herewith part one of the sequel.
SABMiller’s Budweiser fightback lacks punch 9 Oct 2015 The Peroni brewer’s promise to find $550 mln of new cost savings by 2020 is paltry in the context of the $100 bln approach from AB InBev. SAB might have more powerful defences in its locker. It had better, if it wants to stay independent from the Budweiser brewer.
Prognosis is bleak for Shire’s troubled Baxalta bid 9 Oct 2015 The rout in pharma stocks has made the Irish group’s all-share offer less attractive for its recently spun-off U.S. rival. Shire would have to add much more stock to offer Baxalta the $30 bln it initially touted. It should delay – even if it then misses its chance altogether.
Bill Gross gets both personal and legal with Pimco 8 Oct 2015 The former boss of the $1.5 trln investment firm has sued over his exit last year. He paints former colleagues like Mohamed El-Erian as greedy and duplicitous and argues he’s entitled to more of an expected $250 mln 2014 payout than he received. No one comes out looking good.
Volkswagen just spins its wheels before Congress 8 Oct 2015 U.S. CEO Michael Horn offered lawmakers a few new tidbits about the carmaker’s emissions scandal and response. He lacked answers to basic questions, though, and the politicians failed to ask tougher ones. Getting to the bottom of the mess requires both sides to kick it up a gear.
Hillary Clinton lands soft punches on Wall Street 8 Oct 2015 The White House hopeful has unveiled a slew of ideas for reining in financial excess. Initiatives like imposing risk fees on big banks and improving hedge fund reporting won’t win many friends in the industry. But they’re manageable blows that Wall Street could roll with.