Companies & Funds

Misbehaving CEOs can get off far too easily

21 September 2017

That's a lesson to draw from the case of KB Home boss Jeffrey Mezger, whose crass rant with neighbor Kathy Griffin went viral. Cutting his bonus might hurt if he received one in recent years. A more fitting penalty would be to axe his haul of stock awards worth some $2.4 mln.

Viewsroom: German election all about runners-up

21 September 2017

Chancellor Angela Merkel and her Christian Democrats should win more votes than rivals. But they’ll need coalition partners to form a government. Choosing among them promises to be a nail-biter. Also: the Toys R Us bankruptcy won’t be a total loss for its private-equity owners.

Bloated U.S. healthcare spending has silver lining

21 September 2017

The first drug that works by silencing targeted genes by Alnylam is heading for FDA approval. It’s hot on the heels of another that treats cancer by using modified immune cells. New therapies are proliferating, thanks in part to America’s unsustainably large healthcare budget.

Anadarko signals its future is out of its hands

21 September 2017

The oil firm is spending $2.5 bln to repurchase stock. Yet it’s unlikely to make money until 2020 and has $15 bln of debt. The buyback plan is an admission it can’t find profitable investments. It also implies CEO Al Walker is hoping for the oil price to rise or a takeover.

Siemens-Alstom train-deal economics trump politics

21 September 2017

The German firm may merge its train unit with the French peer Alstom, rather than Bombardier. That would create a global player in high-speed rail, but leave Siemens in an awkward embrace with joint-owner French government. It’s a price worth paying to create a European champion.

Agarwal’s Anglo wager is risky way to plot breakup

21 September 2017

The Indian billionaire is doubling down. Paying as much as 1.5 billion pounds to raise his stake in the UK-listed miner to 20 pct may be a way of trying to force a breakup. But unpredictable commodities prices and South Africa’s volatile politics could scupper any such plans.

Harvard endowment risks wasting its big advantage

20 September 2017

An 8.1 pct gain in the year to June was far from Ivy League. Newish boss Narv Narvekar says it will take years to fix performance. But worrying about short-term returns misses a Harvard strength. Its $37 bln pot is ideally suited for the ups and downs of very long-term investing.

Options hurt Bill Ackman’s cause at ADP

20 September 2017

The pushy hedge-fund boss owns most of his 8.3 pct stake in the $50 bln payroll processor with derivatives. It's a common ploy, but Ackman's plan is lackluster and investors can pick from plenty of activist campaigns. His choice of securities only makes it harder to gain support.

Mediobanca tries to have Generali cake and eat it

20 September 2017

The bank may sell a 3.2 bln euro stake in Assicurazioni Generali to a vehicle shared with other investors. The baroque plan would give Mediobanca capital to grow, and allow it to keep its influence over Italy’s biggest insurer. The appeal for its potential partners is less clear.

Uber hops in driving seat to serve ad firms notice

20 September 2017

The ride-sharing firm sued a digital advertising agency claiming fraud and seeking some $40 mln in damages. Clients rarely, if ever, take Madison Avenue to court. Already under pressure to prove their value, the case is another sign ad middlemen need to clean up their act.

Memory sale leaves a hollowed-out Toshiba

20 September 2017

After many leaks, lawsuits and U-turns, Toshiba is set to sell its prized flash-memory unit to Bain and partners for $18 bln. A successful sale would fix the balance sheet and placate lenders. It also reduces a Japanese industrial icon to a ragbag of barely profitable businesses.

Tata Steel deal crystallises overseas M&A pain

20 September 2017

The Indian group’s deal with ThyssenKrupp will shore up the ailing business it bought in 2007. But the joint venture will assume just a quarter of the European unit’s 9.5 bln euros of liabilities. That’s bad for Tata Steel shareholders. At least its rich parent is supportive.

Kingfisher’s DIY skills show room for improvement

20 September 2017

The power drill-to-paint retailer’s first-half pre-tax profit beat expectations – welcome for a company that has lost a fifth of its value since May due to a messy business transformation. In a supposedly recession-proof sector, Kingfisher’s woes are largely self-inflicted.

Toys R Us equity owners aren’t exactly wiped out

19 September 2017

KKR, Bain and Vornado privatized the retailer for $6.6 bln more than 12 years ago. Now their stock is worthless. Even without dividends, though, they’ve collected some $600 mln in fees, interest and other payments. It shows how buyout firms play the game in multiple ways.

Deutsche Bank investors are stuck with John Cryan

19 September 2017

Some shareholders are understandably frustrated at the lack of recovery at the German lender. But replacing the chief executive wouldn’t boost low returns on equity, and might hinder restructuring. Cryan needs an unlikely investment banking recovery to hit his targets.

Jefferies signals a tighter squeeze on Wall Street

19 September 2017

Sharp rises in underwriting and deal revenue helped the investment bank double profit in the latest quarter. While bond trading was depressed, the firm led by Richard Handler seems to be picking up market share in the advice business. These are bad omens for bigger rivals.

Heineken tries its hand at conscious uncoupling

19 September 2017

The brewer’s second-largest investor, Femsa, has sold a stake worth 2.5 billion euros. A spat over Brazilian distribution was a hiccup in an otherwise successful relationship. Co-dependence in the lucrative Mexican market is a good reason for both sides to keep things friendly.

Pirelli IPO leaves long-term questions unanswered

18 September 2017

The Italian tyremaker, sold to ChemChina in 2015, is seeking to raise up to $4 bln in a listing. A shift towards luxury tyres has boosted sales and margins. But growth targets look ambitious and there is no clarity on who will succeed long-term boss Marco Tronchetti Provera.

Jes Staley’s share price misery is undeserved

18 September 2017

Though the Barclays CEO has delivered on his targets the bank’s shares are down 16 pct this year, making it the UK’s worst-performing major lender. Self-inflicted regulatory and litigation worries haven’t helped. But concerns about headwinds in the U.S. and Britain are overdone.

Roku IPO warrants swimming against stream

18 September 2017

The TV-gadget maker may capitalize further on the cord-cutting trend. Some 15 mln accounts are helping grow revenue and reshape the business model. A $1.3 bln valuation is lofty, though, if TiVo and Pandora are guides. Elusive profit and a dual-class structure are also turnoffs.