Virus binge gives hedgies easy prey in testing M&A 13 Jul 2020 Davidson Kempner wants Thermo Fisher Scientific to up its $11.5 bln bid for peer Qiagen. The German group’s business is improving as governments use its kits to fight the coronavirus. The recent rally in diagnostic stocks, and potential counterbids, mean there is little to lose.
Ubisoft’s #MeToo blindness leaves it in M&A bind 13 Jul 2020 Shares in the $10 bln French video game developer tumbled after senior managers left amid allegations of harassment. In 2017, other shareholders helped CEO Yves Guillemot ward off suitor Vivendi. Recent underperformance means the “Assassin's Creed” maker has fewer lives left.
Corona Capital: Ice hockey 13 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: The National Hockey League and its players make the kind of deal Major League Baseball sluggers and owners should have been pitching for.
Benettons face only bad options in Italy road row 13 Jul 2020 Premier Giuseppe Conte wants the family to exit their motorway unit to end a dispute over a collapsed bridge. A cut-price deal would shrink indebted owner Atlantia’s EBITDA by nearly a third. But failure to comply would likely cost the 10 bln euro group its Italian concession.
Alfa Laval’s $2 bln Finnish deal assumes a lot 13 Jul 2020 The Swedish industrial group’s cash offer for valve maker Neles raises its exposure to carbon-heavy markets. In the absence of as-yet-unquantified synergies, the return on investment looks paltry at less than 4%. Alfa investors who hailed the purchase are taking a lot on trust.
Sweden chips away at fintech star’s foundations 13 Jul 2020 A new law by the Nordic state requires Klarna to reduce the prominence of so-called “buy now, pay later” options on e-commerce platforms. It could check a key growth area for the domestic financial group. That might be a problem if other governments decide to clip its wings too.
Yum China can fill a pricier bucket in Hong Kong 13 Jul 2020 The $19 bln KFC operator is mulling a secondary float in the city. Its New York shares have been whipsawed by Sino-American tensions. An outsize base of U.S.-centric investors, a legacy of its spinoff, could be to blame. Heading East will fetch a more finger lickin’ valuation.
Takeda feeling uncomfortable Shire side effects 13 Jul 2020 The Japanese drugmaker is near a deal that would get it to a $10 bln divestiture target 18 months after buying its Irish rival for $62 bln. Promised cost savings are materialising and debt slowly shrinking. Weak stock performance under boss Christophe Weber suggests he overpaid.
American Airlines has jumbo-sized seating dilemma 10 Jul 2020 The Dallas-based carrier’s un-socially distanced cabins have displeased passengers and health officials. But a look at its finances suggests the alternative would be big losses. It’s hard to see how American can please the many people who have stumped up to keep it airborne.
Covid will drag on Boeing profit for years 10 Jul 2020 Certification flights for the 737 MAX are a step toward putting the $100 bln plane maker’s cash cow back in service. But monthly production next year will be about half what was planned before the pandemic. That alone probably means at least a 20% hit to profit.
Corona Capital: Mets star bidders, Robot slayers 10 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Power couple J. Lo and A-Rod are giving hedge fund manager Steve Cohen competition for the New York Mets baseball team; Covid-19 is accelerating automation of the meat industry.
Gold’s enduring high gives miners room to be bold 10 Jul 2020 Bullion has breached $1,800 per ounce amid fears of a viral surge. Mine bosses’ enthusiasm to develop lower grade reserves that only make sense at exalted price levels is usually dampened by worries of a sharp snapback. An extended Covid-19 tail means more will take the chance.
Sugar war divides food group fitties from fatties 10 Jul 2020 UK Prime Minister Boris Johnson plans to ban junk food promotions, the Times reported. The pandemic is spurring a new crackdown on unhealthy snacks. Giants like Nestlé were already curbing their sweet cravings. Others like Cadbury-owner Mondelez have less room to shape up.
DiaSorin offers rare bright spot in Italian gloom 10 Jul 2020 The $11 bln company’s Covid-19 kits may not be as iconic as Prada bags or Ferrari cars. But they sell like hot cakes in a pandemic. If the virus wanes, so will its tests' appeal. Still, DiaSorin’s biotech focus is a step-up from traditional Made in Italy products.
Mortgage IPO brings past crises to the fore 9 Jul 2020 Quicken Loans parent Rocket Companies is profitable, growing, top of its industry and has cutting-edge tech. Founder Dan Gilbert even drove Detroit’s revival. But as crashes like 2008 showed, economic pain hits specialist lenders hard. This time is unlikely to be different.
Volatile markets make case for stock deals 9 Jul 2020 Buyers like Simon Property and Cineworld who have used cash to lunge after strategic targets are dropping their deals like a bad habit. Uncertain asset prices, liquidity crunches and pre-Covid valuations are all to blame. Transactions using stock have a better chance of closing.
Corona Capital: Nursing homes, Airlines, Walgreens 9 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Nursing home investments will get a rethink; airline travelers get the upper hand; and Walgreens’ LBO heyday is in the past.
SAP will struggle to walk, chew gum at same time 9 Jul 2020 The $190 bln software group is weathering the Covid storm: CEO Christian Klein kept sales rising while also slashing costs. Yet keeping up with fast-growing U.S. rivals like Salesforce requires investment. That implies a margin hit, and disappointment for cash-hungry investors.
Rolls-Royce flies closer to credit-card max-out 9 Jul 2020 The British jet engine maker led by Warren East incinerated 3 bln pounds in the last six months due to aviation lockdowns. At least another 1 bln may disappear in the next. Extra credit lines look increasingly like bandages over a balance sheet in need of serious surgery.
UK tests financial limits of green transition 9 Jul 2020 Britain’s regulator has halved the annual return energy companies can make by transmitting gas and electricity to under 4%. The cut is overdue given super-low interest rates. However, the watchdog’s zeal to squash excess profits risks choking investment for a zero-carbon future.