Fed might fret about emerging market "spillback" 16 Jun 2015 Weak investment and import demand in developing nations is threatening to drag down U.S. growth just as the Federal Reserve mulls raising interest rates. The central bank was able ignore the effects of its bond-buying on others. But a spillback could choke the American recovery.
Health insurer M&A is risky Obamacare side effect 15 Jun 2015 Cigna rebuffed Anthem’s $45 bln offer while mulling a $32 bln bid for Humana. The urge to merge is a predictable attempt to boost profit after the controversial law clamped down on premiums. With only five big insurers, though, any deals will get a thorough antitrust checkup.
Judge humbles Greenberg and Uncle Sam in one shot 15 Jun 2015 The former AIG boss proved the insurer’s $182 bln rescue was technically illegal, yet the government owes him no money. What can probably be spun as a victory for both sides will surely please neither. The reality is that huge egos have finally been cut down to size.
Hudson’s Bay wangles way back to Teutonic roots 15 Jun 2015 The Canadian owner of U.S. store Saks – once an English company headed by a German – has the best of a $3 bln deal to buy Cologne-based retailer Kaufhof. Offloading real estate will help it finance the trade. It also gives Hudson’s Bay a cushion against old world risks.
U.S. car boom collides with its tech corollary 15 Jun 2015 Auto dealership software specialist Dealertrack Technologies agreed to a $4.8 bln buyout by Autotrader and Kelley Blue Book owner Cox Automotive. It’s a steep price for a loss-making firm – and a further sign that cheap credit and pent-up demand are fueling a frothy car market.
Activists may feel pill chill before watchdog bite 12 Jun 2015 An SEC probe of investor wolf packs for collusion seems a stretch. Poison pills might be a bigger threat to cabals of ornery owners. Sotheby’s and Dan Loeb’s recent spat suggests they’re legal. Regulators may have to sit out this emerging battle over shareholder democracy.
REIT gambit gives Sears $2.6 bln more to burn 12 Jun 2015 The flailing U.S. retailer wants shareholders to exercise rights to capitalize a real estate unit which will buy 235 stores. The REIT may be a decent bet, and the proceeds will buy Sears boss Eddie Lampert time. The danger is that the hollowed-out merchant will waste the cash.
Review: Inequality part deux is a better start 12 Jun 2015 François Bourguignon’s book explores a paradox: a welcome decline in the global gap between rich and poor and a potentially worrying increase within countries. The French economist sketches the facts more succinctly than Thomas Piketty and also admirably allows for uncertainty.
Can countries rebrand themselves like companies? 12 Jun 2015 A Lazard-WPP partnership to create “nation branding programs” raises the question. It’s one thing for a cheese or booze maker to become Mondelez or Diageo, quite another for despotic regimes or broken economies to simply rename themselves. Our columnists take a stab at a few.
Return to China tough for American orphan stocks 12 Jun 2015 Soaring home markets are prompting Chinese companies to delist from U.S. exchanges. The likes of social network Renren and data centre group 21Vianet may hope for higher valuations in China. But rigid rules make mainland listings harder. Only the unloved will attempt the journey.
Maybe Twitter’s next CEO will be Larry Page 11 Jun 2015 Co-founder and Chairman Jack Dorsey will run the $23 bln micro-blogging company until a replacement for Dick Costolo is found. Leadership turmoil has plagued Twitter for years and impeded its growth. The time is ripe for a buyer to charge in. Google is one good candidate.
One of America’s best-run banks curiously kowtows 11 Jun 2015 U.S. Bancorp, the nation’s fifth-largest lender, is cranking up in big mortgages. CEO Richard Davis admits it’s merely to please shareholders hungry for loan growth, even if it’ll fall short of the bank’s 15 pct return of equity. Though small, such pandering can presage a crisis.
Play time is over for Toys R Us owners 11 Jun 2015 A decade after a $6.6 bln buyout by Bain, KKR and Vornado, the Barbie-to-Nintendo retailer is trying another new CEO. The chain’s weak financials put it in a class with peers struggling against Amazon. To climb into the sandbox with winners like Michaels will take hard work.
Biotech bonanza foils Big Pharma schmuck insurance 11 Jun 2015 Six months after GlaxoSmithKline sold a compound for $5 mln to a hedge fund manager, he has taken it public and landed a $3 bln valuation. It shouldn’t prevent unloved lab discoveries from being licensed. The Axovant IPO just suggests the deal structures could be smarter.
Mexican gusher will benefit from Brazil’s missteps 11 Jun 2015 A new discovery in the Gulf of Mexico comes just as historic energy reforms kick off that should reduce the ability of state oil company Pemex to gum things up. Brazil’s flawed handling of the massive reserves it found in 2007 provides a blueprint for what not to do.
Rupert Murdoch’s step back propels dynasty forward 11 Jun 2015 The octogenarian mogul is starting to hand off the Fox media empire to his two sons. Ceding the CEO title to James and making Lachlan an executive chairman should rile non-Murdoch shareholders, who routinely snub the brothers. Chase Carey’s exit crowns the royal succession.
Global banks forgo this round of Russian roulette 11 Jun 2015 There’s a long tradition of expanding in Moscow at the wrong time, then closing shop just before things improve. With the fee pool at a fraction of its norm, now would be as good a moment as any to exit, as Goldman Sachs and others once did. This time, however, may be different.
Salesforce CEO decides he deserves his pay 10 Jun 2015 An advisory vote approving the cloud software company’s executive pay passed narrowly, with founder and boss Marc Benioff’s 6.5 pct stake more than accounting for the majority. Investor ire, despite stock gains, suggests compensation at the $47 bln Salesforce is out of whack.
Owners see Johnson value above sum of car parts 10 Jun 2015 It’s not obvious that separating the auto supply businesses will add much value. But shareholders still cheered the news that the $34 bln U.S. industrial group may split up. They could be crediting CEO Alex Molinaroli’s next moves. While he has options, that seems premature.
Tokio Marine learning lessons in value destruction 10 Jun 2015 The 38 pct premium the Japanese insurer is paying in its $7.5 bln purchase of HCC is only half as absurd as in its two previous U.S. deals. Those extravagant forays should give it scope to cut costs. By slicing 15 pct of HCC’s overhead it might even finally make a deal stack up.