Verizon puts AT&T’s acquisition willpower to test 3 Sep 2013 Growth in U.S. wireless is slowing, and AT&T learned the hard way that antitrust concerns preclude domestic deals. Vodafone’s newly lined pockets could now tempt AT&T to make a big move overseas. But fatter margins at home and the perils of cross-border M&A argue for discipline.
Nokia smartly leaves phone fightback to Microsoft 3 Sep 2013 An era is over in Finland. Nokia will sell Microsoft its phone unit in a surprise $7.2 bln deal to focus on equipment, maps and patents. Nokia cedes upside in a shaky recovery for a big slug of cash now. The new owner is far stronger, but may still struggle to win in smartphones.
Credit markets face bumpy ride into 2014 3 Sep 2013 The end of ultra-loose monetary policy means higher corporate funding costs. Bond-market theory says the pain should be offset by lower credit spreads, as earnings improve. But it’s not working out like that. Higher rates and volatile spreads will cause some upset in credit.
Minzhong reprieve doesn’t dispel short-seller risk 3 Sep 2013 A bid from the Chinese food group’s largest shareholder has neutralised questions about the company’s accounts. It’s a reminder of the risks for short-sellers going after Asian targets. But the ongoing slide at commodities trader Olam shows concerns aren’t easily dismissed.
Vodafone gets it: cash is king for wary investors 2 Sep 2013 The mobile giant’s $130 bln U.S. exit is tailored for a cautious age, and for safety-first European investors who prefer cash to grand plans. So $84 bln goes to shareholders; debt is cut; capex and divis get a boost. It’s not AOL-Time Warner. But this is what mega means in 2013.
Vodafone-Verizon flowback could be a challenge 2 Sep 2013 Investors in Vodafone will get shares in Verizon Communications as part of the Verizon Wireless deal. Some of the UK group’s domestic holders may want to sell at once. This sort of overhang is never easy to manage. Both sides will hope it’s already reflected in Verizon’s price.
Vodafone needs bolt-on M&A not more mega-deals 2 Sep 2013 A $130 bln U.S. exit would dramatically alter Vodafone’s profile. But there is no urgent need for the UK mobile operator to follow with another huge deal, like buying Liberty Global. Better to see if a foray into German cable works out, and if so, repeat the formula elsewhere.
Hugo Dixon: Vodafone deal days back with a twist 2 Sep 2013 The mobile giant still holds the record for the world’s biggest deal – its $203 bln hostile bid for Mannesmann in 2000. It is now on the verge of taking the number three slot by selling its stake in Verizon Wireless for $130 bln. It has been a better seller than buyer.
Wall Street megadeal quest reaches end of rainbow 30 Aug 2013 Thousands of investment banker man-hours and a decade’s worth of lost evenings and holidays devoted to calling on Vodafone and Verizon could finally pay off. The fee pool may exceed $300 mln for the $130 bln wireless acquisition. The return on investment, though, will vary.
Botched Batista bankruptcy another risk for Brazil 30 Aug 2013 Having to restructure Eike Batista’s collapsing empire is embarrassing enough for Brazil. But Latin America’s most chaotic bankruptcy regime now threatens further harm to the country’s reputation. A high-profile fleecing of foreign creditors would imperil future investment.
Canadian bank shopping south of border paying off 30 Aug 2013 During the financial crisis, and at a time when Canada’s economy and housing market remained stable, some of the country’s big banks rolled the dice on a U.S. recovery. Among them, TD and BMO are reaping the fruits of their expansion just as things at home look decidedly wobbly.
KPN poison pill is odious but tactically useful 30 Aug 2013 A stakeholder foundation has blocked America Movil’s planned bid for the Dutch telco, before a hard offer has been made. That’s not the free market way. But the no could just possibly lead to an agreed deal – if Movil lifts its 7.2 bln euro proposal, and KPN responds sensibly.
Edward Hadas: The overvaluing of overwork 29 Aug 2013 The death of an investment bank intern in London has raised a worthy reflection on the voluntary work ethics of the young elite. Their painfully long hours may reflect a desire to be socially valuable - the ultimate luxury when leisure is mass produced. Change would be welcome.
Stagnant wages make basic U.S. welfare look lavish 29 Aug 2013 A strike by fast-food workers highlights stingy low-end earnings. Government handouts often pay more, the Cato Institute says. They aren’t obviously too generous. Rather, entry-level pay has not kept pace. It’s a facet of rising inequality that makes policy tough to get right.
Vodafone needs to deliver on Verizon exit 29 Aug 2013 Shares in the UK telco have jumped on confirmation of talks to sell out of its U.S. venture with Verizon for a reported $130 bln. Recent U.S. consolidation may have made Verizon move on price. Vodafone boss Vittorio Colao won’t be forgiven if he now fails to secure a good deal.
Fracking may change U.S. foreign policy for good 28 Aug 2013 The abundant supply of hydrocarbons made accessible by hydraulic fracturing has brought America much closer to energy independence and created a buffer for the global oil price. The shift gives Uncle Sam new latitude in handling problems in Syria and throughout the Middle East.
New U.S. mortgage bond rules at least are simpler 28 Aug 2013 Regulators have reworked proposals for how much of their own structured finance cooking banks must eat. Though the feds have given ground on down payments, the streamlined requirements – despite their 500 pages – are a step toward greater mortgage market confidence.
West faces only high-cost options in Syria 28 Aug 2013 Surgical strikes against the Assad regime’s military facilities may aim to undermine its ability to deploy chemical weapons. There would be a price for doing nothing, but action is fraught with risks and could exacerbate regional instability.
Industrialist hat suits Bill Ackman better 27 Aug 2013 Retailing clearly isn’t his thing. A big bet on $22 bln Air Products, however, is the uppity investor’s second effort in heavier production after Canadian Pacific. As at the railway, better management could go a long way. A lot has to go right, though, to replicate that success.
Lawyers need to brake their bribe-case gravy train 27 Aug 2013 Wal-Mart shelled out $80 mln last quarter alone on an internal corruption probe. Others have paid out far more in total. Wasteful legal tactics inflate costs, and potentially ruinous U.S. fines make companies scared to skimp. Smarter lawyering could slow the runaway spending.