Revenue leeway may create too much Autonomy 30 May 2014 Globally aligning rules on how to book sales, as was agreed this week, should create greater consistency. It means more fine print to scour, however, while extra flexibility for U.S. companies could also invite trouble. A cautionary tale may be HP’s allegations against Autonomy.
GoPro pushes to questionable extremes for IPO 30 May 2014 The maker of wearable high-definition cameras is pitching itself to investors as an emerging media brand. It’s a clever trick given the limited lifespan for standalone photography hardware. GoPro’s determination gives it a shot to make the leap, but odds of a face-plant are high.
BNP Paribas fine farce requires swift resolution 30 May 2014 The French bank’s shares sank 6 pct after a media report that penalties for sanctions breaches could top $10 bln. Doubts about the intentions of the U.S. authorities may be creating a false market in BNP shares. Worse, the delay raises the prospect of possible EU retaliation.
Sausage fight may have more sizzle in it yet 29 May 2014 Tyson Foods’ $6.8 bln offer for Hillshire should give it the edge over Pilgrim’s Pride. The meat processor seems to bake in decent synergies and has a stronger balance sheet. But there could be more fat to trim from this hot dish. Too much, though, could leave both bidders burned.
Henry Kravis cultivates private equity perennials 29 May 2014 U.S. firms like his are selling companies to each other at a record pace. Such deals are dubious, especially given how much capital is stockpiled. But KKR’s $1.6 bln buyout of landscaper Brickman and quick merger with rival ValleyCrest suggest the grass can indeed be greener.
Noise in U.S. GDP revision also contains a signal 29 May 2014 The second reading of the first-quarter number shows a 1 pct fall rather than 0.1 pct growth. Bad weather is largely responsible, causing lower inventories and exports. But even this blip will lower annual average growth, making the IMF forecast of 2.8 pct look out of reach.
Low volatility and high doubt hamstring markets 29 May 2014 Trading volumes are dipping in several asset classes. Low price volatility and tougher regulation can be blamed. So can investors’ bruised confidence, after some big bets went awry this year. It’s safer to sit still than to move in what might prove to be the wrong direction.
Rob Cox: Can we Grand Bargain before going bust? 29 May 2014 Kumbaya has broken out in Detroit: Michigan’s legislature, the UAW and even JPMorgan are chipping in to help the city emerge from bankruptcy protection. While good news, it’s also a sad comment on America’s broken political system that it takes so much failure to come together.
Apple gets back to music roots with Beats purchase 29 May 2014 Dropping $3 bln on the headphones maker and streaming service and hiring co-founders Jimmy Iovine and Dr. Dre may reinvigorate the tunes franchise that helped put the iPod creator on top. It also suggests subscription songs – and maybe “smart homes” – are the wave of the future.
Perella Weinberg gives ego-less banking a whirl 28 May 2014 The boutique appointed ex-New York deputy mayor and Goldman banker Robert Steel as CEO, passing over two of its founders. Such moves often create resentment, but flat management, long-time relationships and big equity stakes should quell the possibility of a bloodbath.
U.S. immigration reform contends with Obamacare 28 May 2014 Amazingly, Republicans and Democrats agree that opening America’s doors wider would provide a much-needed economic boost. That’s why there’s even a tiny hope that legislation could pass this summer. Alas, the new healthcare law casts a bigger shadow than the Statue of Liberty.
Smith & Nephew returns to M&A spotlight 28 May 2014 The British medtech firm’s shares jumped on a report of bid interest from Stryker. The U.S. rival ruled out bidding for six months. But the market looks keen on a takeover of S&N, the subject of perennial bid talk. There could be synergies, scale and tax benefits.
GE’s new Alstom bid makes Siemens a distant second 28 May 2014 The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.
Edward Hadas: The problem with the Piketty problem 28 May 2014 The French anti-inequality economist has been accused of using bad data. But any weaknesses in compiling and adjusting figures pale in comparison to his confused use of mathematical theory and social history. Unfortunately, too many economists are ill-equipped to criticise.
Valeant’s sweetener comes off a little defensive 28 May 2014 Upping its bid for Allergan to $49 bln disappointed investors on both sides. Using a messy financial instrument probably didn’t help, especially after the target rejected the deal math and compared its suitor to Tyco. Valeant needs to do more to reclaim the aggressor’s role.
U.S. energy independence death greatly exaggerated 27 May 2014 A new government report slashes California’s estimated oil endowment by 96 pct, roughly halving the nation’s supply of frackable crude. But it only impacts total resources, not reserves that can be drilled profitably. These remain intact, as do U.S. hopes of curbing oil imports.
Guest view: Let sun shine on corporate donations 27 May 2014 Fresh from governance wins on dual-class shares and golden parachutes, Teamsters boss James Hoffa is taking aim at the growing role of companies in U.S. elections. Investors ought to know about these campaign contributions, he says. And it’s up to the SEC to force disclosure.
Pilgrim’s Pride positions itself atop food chain 27 May 2014 The U.S. poultry group is offering $6.4 bln for Hillshire Brands, two weeks after the sausage maker proposed to buy Pinnacle Foods. The earlier deal hasn’t satisfied investor palates. Intended or not, though, it did at least smoke out a strategically and financially superior bid.
Patent trolls again elude would-be captors 27 May 2014 The U.S. Supreme Court roughed up the infringement-lawsuit racket by giving its targets more leeway to recoup legal fees. New coverage for such costs provides a workaround, however. And with legislation just killed to rein in trolls, they seem free to prey on companies unscathed.
Failed bid would leave Astra under pressure 26 May 2014 Pfizer looks foolish for the way it handled a $119 bln offer for the UK drugmaker. But its shares have barely suffered. Astra remains independent and yet it is now under more scrutiny. Some of its shareholders welcomed a possible takeover - and could again.