Capital Calls: BlackRock/Exxon, Media deals, SPACs 25 May 2021 Concise views on global finance: The giant asset manager will vote for three dissident nominees for Exxon Mobil’s board; boutique adviser LionTree has benefited from a rash of media deals; Lordstown Motors show why blank-check merger projections can’t be relied upon.
Lufax buyback boosts case for direct listings 25 May 2021 Just seven months after an IPO where raising capital was not the main goal, the $31 bln Chinese online lending service is repurchasing a slug of its stagnant shares. Such quick reversals hardly inspire confidence. It’s one more reason to consider new stock-issuance alternatives.
China’s commodities boom poses policy conundrum 25 May 2021 The government is trying to forcibly cap a fierce rally of key industrial ingredients like steel and coal. President Xi Jinping’s push to reduce overcapacity and cut emissions has companies slashing output, while property and exports keep driving demand. Something has to give.
Ray-Ban maker may finally live up to merger vision 24 May 2021 EssilorLuxottica has ditched a power-sharing pact that ushered in the 2018 deal but led to infighting. Axing duplication should allow the 63 bln euro group to deliver long-promised cost savings. Erasing the governance discount to listed peers could unlock 10 bln euros of value.
SPAC double downer makes room for clever trade 24 May 2021 Wary co-investors are making blank-check companies pay less for targets. And sceptical punters are pushing down stock prices of the vehicles themselves. It's making it possible to buy SPAC shares below their $10 cash value, an almost risk-free bet with improving upside.
North Sea oil IPOs had best take the plunge soon 24 May 2021 Ex-Centrica boss Sam Laidlaw is mulling a float that may see his Neptune Energy group valued at $10 bln. Equity markets are skittish and rival driller Wintershall Dea also wants to list. But question marks over gas demand make it riskier for owners CVC, Carlyle and CIC to wait.
French investors are collateral damage in EY spat 24 May 2021 Paris-listed Solutions 30 published its 2020 annual report even though the audit firm didn’t sign off its accounts. Post Wirecard, it’s encouraging that auditors are taking a tougher stance. But with lenders potentially pulling credit, it leaves shareholders in a painful limbo.
Capital Calls: “Friends” reunion, SPACs in D.C. 24 May 2021 Concise views on global finance: AT&T's HBO Max is streaming a delayed 25-year reunion of the popular sitcom cast just as the company ditches its media assets; busybody U.S. Congress is taking a hands-off approach to blank-check firms.
Bike sharing shifts into a more manageable gear 24 May 2021 Sloppy investment and price wars wiped out stacks of startups. Now survivors are pedalling toward public markets. China’s Hello has teed up an IPO in New York while a SPAC deal values California’s Bird at $2.3 bln. Both lose money, but revenue and regulation issues look fixable.
State lender is India’s surprise steady bank 24 May 2021 The $50 bln State Bank of India is in stronger shape than it was pre-pandemic. Net interest income grew 13% in the fiscal year, helped by its lower ratio of bad loans and a focus on lending to public employees. That’s a big win but a smaller corporate loan book is a worry.
Difference between AT&T and Comcast: deal hubris 21 May 2021 Both the U.S. telecom firm and cable company used M&A to somersault into media and distribution. Now AT&T is U-turning by ditching Time Warner, yet Comcast is humming along with NBC Universal. For all AT&T’s labors, it’s hard to come back from an expensive, ill-timed acquisition.
Review: Lessons from Wall Street’s forgotten bank 21 May 2021 Brown Brothers Harriman played a central role in American business for over a century. Zachary Karabell’s “Inside Money” traces its rise from cotton trader to kingpin of the financial elite. Though its power has ebbed, the bank’s restrained, low-risk approach remains relevant.
Bursting gas bubble leaves hierarchy of pain 21 May 2021 Until recently, the hydrocarbon seemed a vital bridge from coal to wind and solar. Yet the International Energy Agency now says output must peak by 2025. Gas bulls from European oil majors to producer-states like Qatar all lose out. But some will suffer more than others.
Chinese snack-maker IPO is a little too spicy 21 May 2021 Weilong is aiming to go public in Hong Kong with its oily, salty strips. Sweet sales growth and a juicy profit margin pass the taste test. A March fundraising from Hillhouse and others, however, implied a fiery $9.4 bln valuation. Paying more than 70 times earnings will sting.
Video games give Tencent a break from reality 21 May 2021 Hits like "Honour of Kings" powered a 25% rise in quarterly sales, to $21 bln. New titles should give boss Pony Ma some cover from regulatory threats and fierce competition. The respite may be temporary, but changes in the messaging, music and video divisions hint at what's next.
Roivant double-SPAC deal wallows in own cleverness 20 May 2021 The biotech firm may raise money from a blank-check company, then buy out a drugmaker it previously merged with a SPAC. It sounds complex, but what Roivant is doing is at heart not so different from any IPO. The catch is that it has inside intel, and an incentive to exploit it.
Oatly IPO pumps fresh air into plant-based stocks 20 May 2021 The Swedish group that makes dairy substitutes out of oats surged 30% on its debut, valuing it at $13 bln. Despite heavy losses and growing competition, investors clearly believe the shift in consumption habits is more than a fad. It bodes well for other stock market hopefuls.
WarnerMedia’s leading man springs a pay trap 20 May 2021 AT&T paid Jason Kilar too handsomely to run its media division a year ago. Now that the telecom company is merging WarnerMedia with Discovery, he may want even more to stick around. Whether he walks or stays, the new company to be led by Discovery's CEO could face a pay showdown.
Capital Calls: Apollo, Microsoft 20 May 2021 Concise views on global finance: The second of the asset manager’s three founders moves on; the software firm is pulling the plug on Internet Explorer.
EU chip M&A is politically sound, financially iffy 20 May 2021 Shares in $5 bln Nordic Semiconductor surged 10% on a report that Franco-Italian rival STMicroelectronics may bid for it. A deal would be a logical bet on the trend of having chips in everyday gizmos, and satisfy politicians’ urge to keep key tech in Europe. But returns look low.