Yum adjusts Chinese flavouring, now for packaging 19 Aug 2015 The KFC parent has waved off Sam Su, the man who practically invented fast food in China. Su’s tinkering with the classic menu wasn’t enough to overcome a slew of unfortunate food scares. For a crispy golden sequel, Yum could do worse than spin off the China business altogether.
New bank M&A powerhouse leaves rivals for dead 18 Aug 2015 Regional U.S. lender BB&T’s $1.8 bln swoop for National Penn is its fourth deal in a year. The acquisition makes financial sense and is more proof the Fed supports industry tie-ups. The longer other banks stay on the sidelines, the more it’ll look like they fear rejection.
Wal-Mart’s "investment" in wages may pay off 18 Aug 2015 Lower oil prices and rising consumer confidence should make it a great time to be a low-end retailer. Yet margins at America’s biggest store chain are being squeezed by rising pay. As labor markets tighten and lawmakers push higher wage floors, Wal-Mart may have the last laugh.
BNY Mellon gifts nepotism cops low-hanging fruit 18 Aug 2015 Hiring unqualified offspring of a Middle East sovereign-fund’s boss made the bank an easy target for bribery charges. Far harder are the likes of JPMorgan and Citi, under scrutiny for employing Chinese princelings. Companies deserve to know when connections become corruption.
Carlyle hedge fund speed bumps morph into sinkhole 18 Aug 2015 Claren Road lost money on Fannie and Freddie, energy and Greece. That doesn’t explain how assets tumbled from more than $8 bln to potentially $2 bln in a year. The saga shows how a scatter of small doubts can quickly erase a solid record – even amidst unthreatening broader markets.
Wall Street accountability undercut by SEC greed 18 Aug 2015 The U.S. watchdog wants in-house judges to hear an S&P fraud case and other suits involving the 2008 crisis. The venue would give it an edge, but federal court trials are fairer and shed more light on misconduct. A backlash may force the SEC to put public interests above its own.
Sizing up FX rigging damage is imperfect science 18 Aug 2015 There are ways of guessing how much currency rate manipulation cost some investors on some days. Settlements by banks in the U.S. have set the ball rolling. But these are just estimates, and sometimes there may have been gains. Nuisance value may matter more than client losses.
Amazon swaps more than size with Wal-Mart 17 Aug 2015 The $250 bln online retailer recently surpassed its bricks-and-mortar rival in terms of market value. The goliath led by Jeff Bezos also finds itself in another spot Wal-Mart will more happily cede: defending workplace practices. Like its rival, Amazon too will find wisdom.
Liquidity risk: a bondholder survival guide 17 Aug 2015 Wall Street executives Jamie Dimon and Gary Cohn blame trickier trading on new rules, an argument ex-Fed boss Paul Volcker refutes. But investors need not panic. They already have tools at their disposal to help combat a sudden drought in the market, and one or two new ones, too.
John Malone takes home shopping over the top 17 Aug 2015 Buying Zulily, a flash-sale site for moms, would increase online revenue at the cable mogul’s QVC broadcast arm from about 40 pct to half. The target’s growth is already slowing quickly, however. And at $2.4 bln, or 38 times EBITDA, the deal reveals the high cost of chasing Amazon.
Tinder’s executive reshuffle could be right match 17 Aug 2015 The dating site dumped its CEO after just five months, replacing him with founder and former boss Sean Rad. Returning to an ex might seem risky, especially as parent Match prepares for an IPO. But IAC exec Greg Blatt is chaperoning as chairman. Tinder may be ready to get serious.
Mylan flaunts masterful M&A jujitsu 14 Aug 2015 The drugmaker deftly blocked Teva’s $40 bln offer with a uniquely Dutch poison pill and a bold move to disqualify the suitor’s lawyers. Now it’s exploiting Ireland’s odd takeover rules to put Perrigo in a $34 bln chokehold. Clever defensive tactics will be needed to evade Mylan.
Shire can’t easily pay more for Baxalta 14 Aug 2015 The pharma group’s all-stock $75 bln merger approach has been rejected by its rival. Shire’s bid relies on aggressive claims to boost revenue, which Baxalta disputes. Breakingviews’ model shows Shire chief Flemming Ornskov can’t dig much deeper without bold assumptions.
Goldman’s bank deal swaps one risk for another 14 Aug 2015 Snapping up $16 bln of deposits from GE Capital helps cut the firm’s costs and reliance on bond market financing. Regulators may be happy, but the more deposits it has, the more Goldman, like Morgan Stanley, can use them to fund some trading. That poses systemic issues, too.
Elon Musk recharges Tesla faithful 13 Aug 2015 The electric carmaker is selling $500 mln of new stock with its CEO buying a slug. Ostensibly, the funds will hasten investment in the Supercharger and Model 3. They also help fill a depleting cash tank. The odd jolt to Tesla shares, however, underscores its racy valuation.
Murdoch gets refresher course on capital usage 13 Aug 2015 The media mogul’s News Corp took a big charge on its digital education unit and is seeking a buyer for it. Amplify joins MySpace, Photobucket, Delphi and others on Murdoch’s scrapheap of quixotic investments. The market reaction suggests he should stick to what he knows.
Happy Birthday an apt swan song for U.S. copyright 13 Aug 2015 Artists argue Warner Music can’t charge for the 120-year-old tune because legal claims to it expired ages ago. But deciding who owns a work and for how long is no piece of cake. If this case prompts fixes to half-baked rules, it would be a gift to creators and revelers alike.
SunGard LBO club may yet find reason to cheer 12 Aug 2015 The seven private-equity owners are selling the financial software firm to FIS for $9.1 bln. The 10-year investment yielded a dismal 4 pct internal rate of return. Getting out may alone offer relief, but the firms hold a big, spun-off unit that could still sweeten the end result.
GE loans injection gives Capital One health boost 12 Aug 2015 The bank is buying the conglomerate’s $8.5 bln portfolio of medical loans. Using them to replace lower-yielding bonds on its books should provide an immediate fillip to earnings. As long as the healthcare industry keeps growing, the 6 pct premium CapOne is paying looks justified.
Hackers show news-release business past deadline 12 Aug 2015 Cyber thieves stole company announcements before PR Newswire and others could make them public, reaping some $100 mln from illicit trades. The distributors’ security flaws may give clients more reason to dump the pricey services - especially with social media options on the rise.