Bill Ackman comes out top in $66 bln pharma deal 17 Nov 2014 The activist will reap more than $2 bln from Actavis buying Allergan. It’s a steep price - cost cuts alone cannot justify the premium paid. And losing bidder Valeant has been hauled over the coals. It will, at least, get a $400 mln consolation prize from former ally Ackman.
Baker Hughes wins tactical $35 bln battle 17 Nov 2014 Playing hard-to-get squeezed a premium north of 50 pct out of Halliburton. The larger U.S. oil services group’s target of $2 bln in annual cost savings just about justifies the price it is paying. But integration challenges and competitive concerns make that look aggressive.
Halliburton raid puts shareholder rights to test 17 Nov 2014 With staggered boards increasingly rare, America has a freer market for corporate control than ever before. Halliburton’s hostile swoop on $26-bln oilfield rival Baker Hughes is a good test case. It’ll be up to investors to defend the value of their company in a proxy fight.
Halliburton can stump up $30 bln for Baker Hughes 14 Nov 2014 That’s if the $46 bln U.S. oil services giant finds cost cuts worth 5 pct of its rival’s sales, in line with past deals in the sector. Banding together makes sense in an industry downturn. And Halliburton could offset the risk of paying a potential 40 pct premium by using shares.
Tax code, not bankers, deserves Congress’s ire 14 Nov 2014 Democratic Senator Elizabeth Warren reckons working on inversions rules Lazard’s top dealmaker Antonio Weiss out of a Treasury job. Such transactions may be dumb, but were neither unlawful nor unethical. It’s skewed rules that Washington needs to banish, not all of Wall Street.
Review: Through a distorting mirror, darkly 14 Nov 2014 William Gibson’s novel “The Peripheral” paints future worlds that are built of present fears writ large. Algorithms not only roil financial markets, they travel in time. Nanotech eats people. Money corrupts and spies surveil, even more than now. Yet human decency has a chance.
EU helps New York beat London in hot art market 13 Nov 2014 Works by Warhol, Koons and Twombly helped Christie’s sell a record $853 mln at its latest contemporary art sale in New York. Sotheby’s traded a less spectacular $344 mln a day earlier. London, though, is far behind in the sizzling sector. European regulations are partly to blame.
Buffett’s $4.7 bln Duracell deal a double positive 13 Nov 2014 Berkshire Hathaway is trading its Procter & Gamble stake for the consumer stalwart’s battery unit. Swapping a reliable staple for a declining business looks odd. But it’s tax-efficient and P&G’s injecting $1.8 bln of cash. Even with that, the seller’s getting a decent price.
Oil price fall challenges all the theories 13 Nov 2014 In the summer, producers seemed to have finally found the key to price stability. But the stable cartel model was faulty. The supply-demand equilibrium and marginal costs explanations look even lamer. Will the principle that lower oil prices lead to faster GDP growth also fail?
Rob Cox: Heady Topper points to beer business peak 13 Nov 2014 The craze for this small-batch double IPA illustrates the potential for craft brewers to snaffle up both market and dollar share from Big Beer. That’s why AB InBev and others are on the prowl to buy indie brands. It’s great for drinkers, but makes for a very competitive dynamic.
New Goldman partners arrive in chastened times 12 Nov 2014 The Wall Street firm anointed 78 to its top rank, a few more than in 2012 but fewer than in earlier years. The bank is limiting the size of the partner group amidst lackluster revenue and headcount growth and flattish average pay. The newcomers are there to help turn that around.
Law firm M&A needs its own conflict resolution 12 Nov 2014 Patton Boggs’ merger with Squire Sanders arguably put the combined U.S. firm on both sides of a lawsuit. It’s possible the snafu will lead to disqualification from the case. Like Goldman and other Wall Street dealmakers, lawyers can be sloppy about policing skewed loyalties.
Obama uses China as Republican climate control 12 Nov 2014 The president has struck a deal with counterpart Xi to limit carbon emissions. It’s not perfect, but could be a fillip to renewables investing and more global action against pollution. Preventing the GOP from derailing Obama’s environmental agenda may be its biggest advantage.
Barclays’ forex delay looks like bad news 12 Nov 2014 The UK bank says it is serving investors by deferring a settlement with the FCA and CFTC. Any gain from coordinating with other bodies needs to outweigh the loss of a quick-deal discount. Barclays knows from Libor that going solo is risky. Holding back suggests more is at stake.
U.S. bank deal signals next phase of sector M&A 12 Nov 2014 The $187 bln BB&T is paying $2.5 bln for minnow Susquehanna. It’s not cheap, but big cost cuts cover the nearly 40 pct premium. And it looks an efficient alternative to buying back shares. With banks under earnings and regulatory pressure, such tie-ups are set to proliferate.
New swing producers may shrug off cheaper crude 12 Nov 2014 Conventional wisdom holds that U.S. shale drillers will put a floor under world prices by pumping less if oil drops much below $80 a barrel. But committed costs and falling labor and equipment rates change the calculus. That could slow any response to falling prices.
Ackman pet-health move is Brooklyn Bridge activism 12 Nov 2014 The hedgie will do well from kicking off a sale of Allergan. But doing the same for Zoetis will be harder. Pfizer found no takers before it spun off the unit in 2013. It’s not clear why potential buyers – even Valeant, Ackman’s Allergan partner – would now pay twice as much.
FX fines are wake-up call on self-policing 12 Nov 2014 The $3.4 bln settlement for five banks works out on average at 20 pct higher than Libor – because the firms failed to mend their ways. Regulators are seeking yet tougher internal controls. Banks have a last chance to show they can treat clients fairly.
How to benchmark banks’ FX fines 11 Nov 2014 The banking industry is poised for a broad settlement for rigging currency markets. Prosecutors want to be harsh but fair, while banks want to put their problems behind them. The balance will be set with an eye on the $560 mln bank average for Libor-fixing, excluding DoJ fines.
Google’s NASA deal may benefit everyone but itself 11 Nov 2014 The company’s $1.2 bln, 60-year lease of a space agency airfield near its HQ is another long-term bet on nascent technologies like robotics, artificial intelligence and space exploration. Wall Street won’t give Google any short-term credit, but the world needs the research.