Time Warner can justifiably hold out for more 18 Jul 2014 Though Rupert Murdoch’s $80 bln bid includes a 20 pct premium, his quarry may have been on track to achieve the offer price on its own. Time Warner also should be able to get more credit from the market for its growth. That gives boss Jeff Bewkes some negotiating power with Fox.
Review: Inside commodity traders’ "Secret Club" 18 Jul 2014 During the 2000s, speculating in commodities became the new fad, contributing to soaring prices and increased volatility, says Kate Kelly in a new book. She oversimplifies some of the dynamics of this complex world, but the powerful club she exposes should not be overlooked.
Alibaba’s fortune doesn’t depend on lucky digits 18 Jul 2014 The e-commerce colossus has moved its likely listing date from August to September, so will miss the “double 8,” numbers seen as charmed in China. Given its growth, Alibaba doesn’t need the gimmickry. And as Facebook learned, reaching for magic numbers in an IPO can backfire.
Too-big-to-fail is more than one-size-fits-all 17 Jul 2014 U.S. lawmakers are trying to stop the Financial Stability Oversight Council from designating any more non-banks as systemically important. That’s a heavy-handed response for large, interconnected firms that need monitoring. Even so, a more tailored approach would work better.
Medical upstart may help investors smell blood 17 Jul 2014 Theranos is applying Apple-meets-Tesla ambition to lab testing and phlebotomy. Though ordinary punters can’t buy into the Silicon Valley firm, already valued at $9 bln, believers in founder Elizabeth Holmes could short LabCorp or Quest. They’re also worth $9 bln each – for now.
Potent Russian sanctions show Europe the way 17 Jul 2014 Moscow markets tanked after the U.S. agreed new, tougher economic measures against Russia over its role in Ukraine. Sanctions work. The EU should remember that when announcing its own plan in a few weeks – unless Vladimir Putin offers an olive branch by then.
Morgan Stanley dangles sneak peak at prosperity 17 Jul 2014 The investment bank run by James Gorman relied on a whopping $600 mln second-quarter tax break to generate its best return on equity in years. Even without it, results are improving – slowly. And the path to beating its cost of capital may spring from an unlikely source: lending.
Microsoft carefully dismantles Ballmer legacy 17 Jul 2014 More than two-thirds of 18,000 announced job cuts at the $370 bln software company relate to just-acquired Nokia. Xbox also is gently being moved out of Microsoft’s central mission. Boss Satya Nadella is undoing his predecessor’s work in a tactful and value-creating way.
Murdoch may be heading for Pyrrhic Time Warner win 16 Jul 2014 The media mogul’s rebuffed $80 bln bid for his rival already looks a stretch. He’d need more than twice the $1 bln of expected synergies to cover that premium – and a ton of debt. History suggests the octogenarian won’t give up – and may destroy value by offering more.
Thornton unleashes Wall Street tactics on Barrick 16 Jul 2014 The gold group’s chairman has axed the CEO and handed the reins to two co-presidents. It’s similar to how Goldman Sachs operated when he was there. It also echoes Citi chair Mike O’Neill’s power play in ousting Vikram Pandit. Barrick needs a refresh, but the strategy has risks.
Slim isn’t the only picking to play Mexican oil 16 Jul 2014 Ending Pemex’s crude monopoly may herald a surge in drilling and output. That won’t much move the stock of incoming giants like Exxon. But it should boost Carlos Slim’s Grupo Carso, with its stable of drillers and services firms, and other local talent like Alfa and Grupo Mexico.
Dual-share inequity to figure in Time Warner fight 16 Jul 2014 If Rupert Murdoch wants to own the HBO-to-Looney Tunes conglomerate he needs to be willing to convert Fox into a one- share, one-vote company. The combo would be too big for a takeover anyway. The irony is that Fox’s super-votes are what give Murdoch the chutzpah to attempt a deal.
BofA stuck in a low-profitability trap 16 Jul 2014 Several of the bank’s businesses put in a good showing for the second quarter. Trouble is, even after aggressive cost-cutting, BofA is floundering. Strip out legal costs, tax breaks and other noise, and the firm run by Brian Moynihan can only manage a 6.4 pct return on equity.
Lottery firm buys pricey $5 bln ticket out of Italy 16 Jul 2014 GTECH is buying U.S. slot-machine maker IGT for $4.7 bln in cash and stock. That’s a bold price given IGT’s competitive challenges. The buyer is talking tough on synergies. Still, this cuts GTECH’s reliance on Italy - and could also bring down its tax bills.
China’s "De-IOE" campaign takes a bite out of tech 16 Jul 2014 Beijing has been nudging state enterprises to wean themselves off U.S. software and service firms, chiefly IBM, Oracle and EMC. The drive, which accelerated after Washington indicted Chinese army officials, has dimmed the brightest star in Big Tech’s otherwise dull constellation.
Battery wager should give chemicals maker a jolt 15 Jul 2014 Albemarle’s $6.2 bln deal for rival Rockwood is a big bet on demand for lithium-ion power cells. Its investors were less than electrified, but cost savings cover the premium offered – and owning a low-cost producer of lithium is a smart play on the rise of electric cars.
Rob Cox: Has Yum outlived its usefulness to China? 15 Jul 2014 The Kentucky Fried parent earned respect – and profits – less by currying favor with Beijing, more by doing good business. Innovations like a safe food-supply chain benefited the country. But having created the standard, Yum is now struggling to revitalize its recipe.
Chinese firm schools Uncle Sam on rule of law 15 Jul 2014 A U.S. appeals court has ordered the Obama administration to explain its veto of Ralls’ wind-farm project. National security may have been at stake, but investors deserved at least a glimpse of the evidence. It’s a reminder that transparency and due process often go hand in hand.
Market has message for tobacco M&A trustbusters 15 Jul 2014 Reynolds and Lorillard have gained over $10 bln of market value since talk of their $55 bln merger surfaced. That can’t be justified by promised savings or the market rally. Anticipation of a surge in pricing power through the creation of a duopoly explains investor enthusiasm.
JPMorgan’s return to health a fillip for Dimon 15 Jul 2014 The lender got through two quarters in a row without socking away huge amounts to cover legal costs. That’ll be a relief for the CEO as he starts cancer treatment. What’s more, core earnings improved for the first time in a year. Returns are still mediocre, but it’s a start.