China’s Quora haunted by own existential question 23 Mar 2021 Zhihu, the country’s largest online Q&A platform, seeks a $6.4 bln valuation in a New York IPO. It narrowed losses and doubled sales last year thanks to a membership drive, but the business plan has holes. The price also looks extremely rich given peers’ struggles.
Exxon’s inexperienced board leaves it exposed 22 Mar 2021 The $240 billion oil giant’s shares have fallen by more than a third in five years. Even with three new members, energy experience is limited. Showing shareholders that it will be solid stewards of capital is imperative. Otherwise, rival Chevron has a takeover opening.
Banks’ climate pledges suffer from water scarcity 22 Mar 2021 It barely gets a mention in Wall Street’s net-zero goals. Yet water accounts for a good slug of carbon emissions and 90% of global warming-related crises from U.S. droughts to Australia’s floods. Banks can speed toward sustainable finance by paying attention to the resource.
Capital Calls: Leon Black, Happiness index 22 Mar 2021 Concise views on global finance in the Covid-19 era: Apollo’s founder still has his imprint on the Museum of Modern Art and Dartmouth College; people are proving surprisingly resilient in the pandemic, a recent poll suggests.
Aramco’s next share offer is just as hard a sell 22 Mar 2021 The $1.9 trln Saudi oil giant’s annual results showed Covid-19 scars. If Riyadh sells more shares, Aramco’s low costs and spare capacity may be appealing to non-Saudi investors that largely sat out its 2019 IPO. But many environmental, social and governance red flags remain.
Suez brings water pistol to French sewage shootout 22 Mar 2021 CEO Bertrand Camus proposed carving up the group or swallowing an “irreversible” poison pill if Veolia doesn’t raise its 11.3 bln euro bid. Rival boss Antoine Frérot can afford to pay more. But in the absence of other bidders he can first try to kick out Suez’s board.
Danone’s purpose will survive chairman’s departure 22 Mar 2021 Emmanuel Faber’s sustainability credentials did not prevent the yoghurt maker from ousting him. But fears the group will disavow its ESG ideals are misplaced. The standards are embedded in the French company’s operations and legal status. Besides, investors still support them.
Blackstone’s Aussie gamble may tempt more players 22 Mar 2021 The buyout shop’s $6.2 bln offer for Crown is highly conditional, sensibly so given the casino operator’s regulatory nightmare. But the low-ball bid could encourage others like Sands to try their luck. A knockout price would give Blackstone a good exit on its existing 10% stake.
Mega-train deal warrants long Washington layover 22 Mar 2021 Canadian Pacific’s $25 bln takeover of Kansas City Southern would be the second transcontinental railway controlled north of the U.S. border. The price can be justified by a big expected uplift in revenue growth. That’s also the type of thing that merits close regulatory scrutiny.
Turkey picks worst time to fire central banker 22 Mar 2021 President Tayyip Erdogan removed hawkish Governor Naci Agbal, replacing him with a professor who says high interest rates cause inflation. A widening current account deficit, depleted forex reserves and inflation at 16% make a currency crisis both more likely and more painful.
Chubb’s thin bid for Hartford invites spoilers 19 Mar 2021 The U.S. listed insurance firm’s $23 bln offer for its smaller peer looks stingy – Hartford could be worth $27 bln to a buyer after factoring in cost savings. If Chubb boss Evan Greenberg doesn’t stump up more, one of his rivals might.
Goldman’s glum juniors are a reversion to the mean 19 Mar 2021 A slide deck protesting 120-hour weeks and “inhumane” conditions elicits few tears – Wall Street analysts often bellyache but fare better than most. Still, self-pity signals the end of hard white-collar graft as a status symbol. It’s a reason banking is losing its shine.
Review: When “Ocean’s Eleven” meets Chapter 11 19 Mar 2021 “The Caesars Palace Coup” rolls a casino caper and legal thriller into one edifying book. Dense bankruptcy lingo sometimes bogs down the ruthless scrap over $18 bln of distressed debt. And it’s hard to find a Danny Ocean in a Wall Street dramatis personae full of Terry Benedicts.
Capital Calls: Bank M&A, Wine trades 19 Mar 2021 Concise views on global finance in the Covid-19 era: Sabadell’s decision to keep its UK unit nixes hopes of a deal with BBVA; U.S. vintner Duckhorn’s IPO ups pressure on Treasury Wine.
Naspers can tackle one-third of Tencent problem 19 Mar 2021 Despite listing a Dutch subsidiary in 2019, the South African company still trades at a big discount to its $239 bln stake in the Chinese internet giant. Its inability and unwillingness to sell are enduring factors. An outsize weight on the Johannesburg bourse is easier to fix.
Office landlords can live with homeworking shock 19 Mar 2021 Firms like HSBC hope working from home will let them cut costs. Goldman Sachs thinks it is a fad. Yet even if employees spend more time at home, their needs and social distancing rules will limit how much space can be freed up. The slump in office property stocks looks overdone.
China’s web lenders march past a crushed Ant 19 Mar 2021 LexinFintech, a much smaller, capital-light rival to Jack Ma's embattled fintech giant, grew its loan book by 26% to $12 bln last quarter. It's an example of how nimbler peers are thriving amid Beijing's clampdown. Regulatory risks are huge, but brave investors can reap rewards.
UK governance overhaul faces messy application 18 Mar 2021 The government wants company directors to face bans and pay clawbacks if they cause losses or failure. The proposals’ fuzzy language may warp incentives, and lead to legal disputes. PM Boris Johnson’s desire to attract listings to Britain after Brexit may also blunt their teeth.
AT&T’s streaming is in a valuation dead zone 18 Mar 2021 Competitors including Disney, ViacomCBS, and Discovery have collectively added $250 bln to their market capitalizations in a year, thanks to streaming services. Despite HBO’s success, though, AT&T’s shareholders are worse off. Investors aren’t buying the mobile-content bundle.
Capital Calls: Airline IPO, Turkey’s central bank 18 Mar 2021 Concise views on global finance in the Covid-19 era: U.S. regional air carrier Sun Country Airlines’ IPO pop is justified by positive cash flow; Turkey shows how emerging-market policymakers face trickier choices than their rich-world peers.