China’s old meat is a corporate health warning 24 Jul 2014 KFC’s parent and McDonald’s have been tainted by stale meat that slipped through a supplier’s controls. Monitoring a rapidly growing business is tough, and global brands face a high bar – just ask JPMorgan or Glaxo. Being foreign and successful is fast becoming a health risk.
China’s Haier can make a GE appliance deal wash 24 Jul 2014 Acquiring the U.S. conglomerate’s white-goods division would be a Lenovo-IBM moment for KKR-backed Qingdao Haier. The purchase, at up to $2.5 bln, would give the Chinese refrigerator-to-dryer maker a trusted Western brand that widens its appeal and helps expand global scale.
Allergan bosses put money where their mouths are 23 Jul 2014 The drugmaker says it’s worth more on its own than the $52 bln Valeant is offering. That’s straight from the empty-promise, takeover-defense playbook. Allergan, however, is linking stock and option grants to lofty profit goals. It’s a bolder gambit that should become an M&A norm.
U.S. money market rules better late than never 23 Jul 2014 It’s six years since the Lehman collapse infected supposedly cash-like mutual funds. The SEC is finally requiring market valuations for some and introducing possible limits and fees on withdrawals. Though tainted by messy compromises, the changes should reduce the risk of runs.
Carl Icahn picks better oil loser than Jana 23 Jul 2014 The septuagenarian activist could extract at least 40 percent from his stake in energy laggard Talisman. That’s more than Jana reckons it’ll earn agitating for change at Apache. It’s late to that party, whereas Repsol’s interest in Talisman could add more fuel to Icahn’s profit.
Doors opened wide for U.S. retail M&A 23 Jul 2014 Amazon’s steady march makes it harder for trustbusters to stop big merchants that cater to the same customers from uniting. Pressure on Family Dollar and PetSmart, two $7 bln chains, to merge with rivals shows uppity investors have taken note. Expect more deals of a similar ilk.
Coke gives Pepsi a breather in activist fight 23 Jul 2014 Growth in snacks helped salvage the latter’s second quarter. Weak U.S. soda shipments dragged more heavily on its rival. It buys time for Pepsi boss Indra Nooyi, who faces growing pressure to give a board seat to activist Nelson Peltz. But it doesn’t kill his case for a breakup.
“New Deutsche” just got pushed back again 23 Jul 2014 The German investment bank is under fire from U.S. regulators for poor-quality financial reporting. In recent months Deutsche Bank has raised capital and revamped strategy – but that’s the easy part. Making investors believe culture has genuinely changed will take much longer.
Apple winds up earnings hope for new gadgets 23 Jul 2014 The iPhone maker racked up another quarter of so-so growth – and astonishing cash flow. CEO Tim Cook has paid out more than $40 bln over 12 months but added nearly $20 bln to the kitty. The lower share count may fuel a stock run-up if Apple soon unveils another must-have device.
Apple’s growth in China less impressive close up 23 Jul 2014 The 48 percent growth in China iPhone sales in the last quarter-year is strong. But seen from the Middle Kingdom, Apple vies with large rivals U.S. consumers have barely heard of, like Xiaomi and Coolpad. As they gain share too, Apple will struggle to be more than an also-ran.
U.S. banks face lurch from recovery to recession 22 Jul 2014 Lending at the likes of PNC and U.S. Bancorp is up, and less cash is needed against bad loans. But low interest rates are keeping returns tepid. That raises the risk some may cut corners. It also means there may be no big earnings boom before the economy slows again.
Ackman burnishes blowhard credentials – for now 22 Jul 2014 The hedgie’s latest Herbalife broadside was lengthy but lacked a smoking gun. The stock recovered more than it lost in anticipation of the revelations. Short-sellers can be proved right in the end, but the Pershing Square boss’s loud, $50 mln campaign isn’t winning followers.
Pension vote still leaves Detroit renewal in doubt 22 Jul 2014 Motown’s retirees have accepted the city’s $18 bln bankruptcy plan. But backers of $1.5 bln of pension debt remain important holdouts – and they have a point. The amount earmarked for rebuilding is also $1.5 bln. A lengthy appeal or a big settlement could put that pot at risk.
Rob Cox: Listen to Murdoch’s muzzled minorities 22 Jul 2014 Most Fox believers are relegated to owning non-voting stock, the same second-tier paper on offer to Time Warner shareholders. While there’s broad investor overlap in the two companies, the record shows a clear distaste for the imperialistic ways of media mogul Rupert Murdoch.
Goldman chums return John Thain to semi-importance 22 Jul 2014 Merrill Lynch’s last boss has been doing penance running lending minnow CIT for four years. Now he’s spending $3.4 bln to buy OneWest, the remains of a bust bank revived by fellow Goldman alums. It’s a smart deal that restores Thain’s membership in the SIFI club, if only just.
Carlos Slim’s three-day workweek comes up short 22 Jul 2014 The Mexican billionaire wants to combine fewer weekly hours with longer working lives. That plan would waste the competence of the relatively young, while leaving many older workers with the wrong skills. Enhanced mid-life education would be a better use of leisure time.
Probing Congress’ insider trades worthy if doomed 21 Jul 2014 U.S. watchdogs say dozens of investors may have profited from an illegal Capitol Hill tip. Lawmakers are stonewalling, though, and the statute they passed to ban such leaks may be unenforceable. Even so, the case could shame Congress into getting serious about policing trades.
Green high-yield craze is too hot and full of wind 21 Jul 2014 The latest U.S. antidote to meager interest rates is the “yieldco” – collections of wind farms and solar plants. Demand is strong for the fledgling asset class, with six IPOs in a year. But ardor for the likes of NRG and TerraForm has driven valuations to unsustainable heights.
Controversy upending Dodd-Frank’s smartest goals 21 Jul 2014 Four years after the landmark financial regulation became law, some of its simplest ideas now seem complicated. Critics accuse the systemic risk council of opacity and bias. Living wills are proving cumbersome to implement. And Congress may have mucked up consumer protection.
EMC’s "federation" just a synonym for conglomerate 21 Jul 2014 The $57 bln data storage company is in the crosshairs of aggressive hedge fund Elliott Management. EMC says its “federation” enables subsidiaries including VMware to cooperate and create value. Growing competition between the parts and a valuation discount suggest otherwise.