Bad borrowing habits come home to roost in India 27 May 2020 A London court ordered Anil Ambani, the brother of Asia’s richest man, to pay $700 mln to Chinese banks led by ICBC over a personal guarantee on a loan. The case is indicative of the unorthodox funding practices used by the country’s tycoons. It should help clean up their acts.
Warner Music IPO is priced to sing 26 May 2020 Lizzo’s record label is returning to the stock market at a lower valuation than Vivendi scored selling 10% of Universal Music. But Warner is smaller and not growing as fast. Still, at $13 bln the discount looks big enough to strike a chord with buyers itching for a new hit.
Latin America puts new spin on airline distress 26 May 2020 The region’s largest carrier, Latam Airlines, has filed for bankruptcy protection weeks after rival Avianca did. It can’t bank on government bailouts and has hefty dollar liabilities, amplifying the shock of having to ground planes. The future looks a lot smaller.
Hertz is a study in financial comorbidities 26 May 2020 The car-hire company’s heavy debts crushed it when Covid-19 curtailed travel. Other businesses with overengineered balance sheets have similarly come unstuck. It’s not that Hertz could have seen this coming – but the system has quickly switched to favoring flexibility over risk.
Stanley Ho made sure his house kept winning 26 May 2020 The Macau gambling doyen, who has died aged 98, once provided half the former colony’s tax revenue. His SJM empire weathered the handover of the territory to China, its emergence as a competitive Las Vegas-beating hub, and family feuds. Punters have proved resiliently profitable.
JAB’s $23 bln coffee unit is priced to take away 26 May 2020 The investor is offering shares in JDE Peet’s at a decaffeinated 20% discount to Nestlé. Consumers stuck at home are giving packaged brands like Kenco a boost, but prices per cup can still grind higher when cafes reopen. Europe’s biggest float this year can brew a robust return.
Vegan boom is heading for a meat-fuelled bust 26 May 2020 Sales of animal product-free food soared in May, bumping up shares in the likes of Beyond Meat. Viral outbreaks at slaughterhouses suggest vegan supply chains are more durable. But as beef giant Tyson cuts prices and a slump looms, appetite for pricier foods could wane.
Corona Capital: Texas bank merger 26 May 2020 Concise views on the pandemic’s corporate and financial fallout: Texas Capital and Independent Bank ditched their almost $3 bln deal as Covid-19 played havoc with oil-and-gas loans. It is, at least, a mutual decision.
Sanofi finds M&A cure to CEO foot-in-mouth disease 26 May 2020 The French drugmaker is selling a $13 bln stake in biotech Regeneron. CEO Paul Hudson, recently chastised for saying America would get first dibs on a Covid-19 vaccine, now has a pristine balance sheet to do deals and invest. It helps Sanofi’s growth problem, and public image.
French plutocratic raiders rally around their kind 26 May 2020 LVMH’s Bernard Arnault helped the activist-besieged owner of Paris Match by snagging 25% of the Lagardere family’s holding company. And Vivendi’s Vincent Bolloré raised his stake in the media group to 16%. Mogul overcrowding risks blunting Amber’s bid for better governance.
Meituan Dianping cooks up some tasty scraps 25 May 2020 Covid-19 hit China’s $83 bln takeaway-to-taxis company, whose quarterly sales fell 13%. The outlook is shaky, but more restaurants have signed up and new initiatives like contactless delivery should provide value longer-term. Merging Western peers are in comparative disarray.
Luckin spill will get China coffee war brewing 25 May 2020 The reeling chain once worth $12 bln is getting booted off the Nasdaq for fraud. Its brand might be toxic, but it has assets and ideas that Yum China, Tim Hortons and HeyTea could buy or adapt. Such deep-pocketed competitors may present a more formidable challenge to Starbucks.
A Ford-VW tie-up would solve a ton of problems 22 May 2020 The two rivals’ souped-up electric and autonomous collaboration won’t solve their respective geographic weaknesses. A merger would. It’d also create value and give Ford’s underperforming boss a graceful exit. The biggest sticking point is the firms’ convoluted ownership.
Still time to make U.S. airlines pay their way 22 May 2020 Germany’s tough bailout of Lufthansa makes the U.S. government look a soft touch. True, it doesn’t make sense to punish an industry for problems not of its own making. But assuming more bailouts may be needed, there could be a chance for Uncle Sam to get more for the taxpayer.
Alibaba may be China’s secret stimulus weapon 22 May 2020 The e-commerce firm is benefiting as millions of shoppers turn online - quarterly sales rose 22% to $16 bln. But overall domestic demand is weak and Alibaba has been handing out subsidies to kickstart businesses. That makes the $569 bln giant ideally suited to revive consumption.
Bard bailout won’t keep all the world a stage 22 May 2020 Shakespeare’s Globe theater in London is asking for state aid to avoid closing its doors for good. It’ll likely get it to avoid the lousy symbolism. But live theater – including the more commercial variety on Broadway – needs more than a quick fix, or it may be curtains.
Luxury will fly only when travellers do 22 May 2020 Burberry and its fashion rivals face a summer of discontent. European stores are starting to reopen, and more bling is being sold in mainland China. But purchases by tourists won’t rebound for a while. Rising inventory is a sign that the current season is partly lost.
Corona Capital: Tech laggards, MAC fight 22 May 2020 Concise views on the pandemic’s corporate and financial fallout: Troubled firms HPE, Dell and IBM are facing even more challenges while chipmaker Nvidia gathers strength. Plus: A judge denied to fast-track payment firm Wex’s MAC fight.
Morgan Stanley gets closer to real Reliance prize 22 May 2020 Deals are flowing fast as Mukesh Ambani rejigs his empire. The U.S. bank has helped raise $10 bln for the tech unit from Facebook, KKR and others. It wasn’t on a bigger deal inked with Aramco but that’s less important, especially with the $70 bln Jio unit’s IPO on the horizon.
Financial myopia could be healed by virus 21 May 2020 Apple, Airbus and Asahi are among many companies withdrawing forecasts during the pandemic. It’s a good time to reconsider campaigns by JPMorgan boss Jamie Dimon and others to end quarterly profit guidance. Covid-19 should help refocus attention on the longer-term.