Google gets taste of its own strong medicine 8 Jun 2015 MasterCard and Visa are stopping the tech titan’s Android Pay from taking a cut of transactions. That’ll please banks and could pressure Apple to ditch its own fee. Google won’t miss the revenue but has grown accustomed to being dominant. It may have met its match in finance.
U.S. oil chiefs march offbeat to carbon drum 8 Jun 2015 Even as the G7 tries to phase out fossil fuels and Europe’s corporate titans push to price emissions, bosses like Chevron’s John Watson snub the idea, saying “customers want affordable energy.” The steady beat for change means U.S. companies may cede the chance to shape policy.
Shareholder votes served with too much Apple sauce 8 Jun 2015 Companies keep tossing several proposals into one ballot initiative, despite a landmark 2013 ruling that ripped the iPhone maker for doing so. Such bundling also turns out to be more common than suspected, a new study shows. Investors deserve a dash of stronger voting protections.
Diageo bid genie may be out of the bottle 8 Jun 2015 Investors seem to think the $70 bln drinks giant is vulnerable to a takeover. Diageo shares jumped as much as 8 pct on sketchy reports of a possible approach from 3G Capital, of Heinz and Kraft fame. The UK-based company will need to respond, even if there’s no action this time.
U.S. jobs point to Fed’s sweet spot 5 Jun 2015 Some 280,000 positions were created in May, a healthy pickup to the 2015 pace. If this level of hiring keeps up and participation holds steady, unemployment would fall below 5 pct by year’s end. That’d beat the central bank’s projected range – and makes it harder to delay action.
Wal-Mart pits nepotism against experience 5 Jun 2015 The $240 bln retailer is replacing Chairman Rob Walton with his son-in-law. That’ll rile investors pushing for independent oversight. Greg Penner has a solid business background – and the family owns half the company. But Penner needs to prove he can get Wal-Mart back on track.
Vodafone talks raise more questions than answers 5 Jun 2015 The $100 bln telco is talking to cable group Liberty Global about an asset swap. Vodafone shares fell, suggesting disappointment among investors who’d thought a merger was on the cards. Smaller scale M&A is probably the right way forward, but any structure will be complex.
Loans are no place for anti-takeover landmines 4 Jun 2015 The so-called “proxy put” gives lenders to a company the option of calling a default if enough board members are ousted. Investors say this impedes their right to vote for directors, and U.S. courts are tending to agree. Boards need to work with shareholders, not sabotage them.
Beware a bluff from poker-playing Dish boss 4 Jun 2015 Charlie Ergen would be making a bold bet by merging his $35 bln U.S. satellite operator with similarly-sized wireless provider T-Mobile US. Given the spectrum Dish has accumulated, a deal could make sense. Ergen has proven wily, though, and plays his cards very carefully.
U.S banks may loosen M&A reins after Kentucky deal 4 Jun 2015 Smaller lenders have lots of reasons to merge: slow growth, rising costs and low interest rates. They’ve held back, though, in part because deals got stuck in regulatory quagmires. The Fed’s relatively swift assent to BB&T’s Bank of Kentucky swoop might put things back on track.
May Paulson’s Harvard gift spark plutocrat rivalry 3 Jun 2015 The hedgie’s $400 mln donation could soon be surpassed as the university’s largest, if recent history is any guide. Others like Bill Gates give more creatively, but engineering education is hardly a bad choice. Inflation – and competition – are welcome in the charitable context.
Overbanked tech IPO may rival Goldman’s deal 3 Jun 2015 Cybersecurity firm Sophos has six banks selling at least $125 mln of stock. That’s an average $21 mln per firm, a light workload. Facebook’s 33 underwriters shifted far more. Perhaps only the 128 banks on Goldman’s 1999 IPO did less. But the numbers hide a broader farce.
Beats gives Apple foretaste of car-making woes 3 Jun 2015 The iPhone maker is recalling 233,000 speakers made by the firm it bought last year. Apple has dealt with faulty goods before. But the scale of the recall and the reason, fire hazard, echo problems faced by the auto industry – a group CEO Tim Cook may want to join.
Match-fit FIFA would give players, fans more ball 2 Jun 2015 Sepp Blatter has resigned as the besmirched president of soccer’s governing body. Needed reform is now unavoidable. FIFA’s best strategy would be to embrace it by enfranchising the beneficial owners of the sport: the players and the fans. It would also usher in better governance.
Apollo strains to heed LBO mission control 2 Jun 2015 Leon Black’s private equity shop is paying a headline valuation of 9.4 times EBITDA for specialty chemicals maker OM Group. Side deals will lower the multiple but Apollo’s avowed discipline looks tough in a pricey market. It’s a small buyout that illustrates a bigger industry problem.
Hedgies’ Safeway victory puts boards on notice 2 Jun 2015 Cerberus-owned Albertsons has to give three investors 27 pct more than it paid for its rival. The speedy resolution of this appraisal rights case should embolden those suing Safeway’s board for failing to get the best deal – and remind directors that their necks are on the line.
Supreme Court gives risky home loans a welcome mat 2 Jun 2015 The U.S. justices say second mortgages survive borrower bankruptcies – even when a first lien exceeds a property’s value. That shelters the kind of lending that helped inflate the housing bubble. Banks need incentives to offer credit carefully, not raise the roof like it’s 2006.
Rob Cox: If FIFA were a country it would be Russia 2 Jun 2015 The soccer federation run by Sepp Blatter and the Russian one headed by Vladimir Putin operate as baroque patronage systems, their bosses doling out favors from the center. Power derives from keeping constituents both fragmented and well heeled.
Corporate divorce expenses matter beyond activism 1 Jun 2015 Acquisitive CEOs talk a lot more about deal synergies than costs. Warren Buffett once said he had never heard the word “dis-synergies” mentioned but had witnessed plenty. Managers under pressure to split companies may similarly overstate the negatives, but they’re still real.
Molycorp unearths definition of a commodity 1 Jun 2015 The rare-elements miner missed an interest payment, which could herald a descent into bankruptcy protection. Since peaking at $6 bln in 2011, Molycorp’s market value has collapsed 99 pct. It’s a classic case of investors confusing a demand surge, tight supply and real scarcity.