West End foray breathes life into UK property M&A 1 Jun 2020 Capco, owner of much of London’s upmarket Covent Garden district, has bought a 26% stake in $2.4 bln Shaftesbury, which manages large swathes of the trendy Soho area. A merger could follow. The risky punt shows UK landlords are starting to think about life after the pandemic.
Buyout firms make first move in EU telco shake-out 1 Jun 2020 KKR, Cinven and Providence are offering $3.3 bln for low-cost Spanish operator MasMovil. Stricter financial discipline may mean less of the cut-throat pricing that hurt rivals. After an EU court ruling on a nixed UK merger, it may also be the start of a new round of mergers.
Germany’s car bonus scheme is only half the trip 1 Jun 2020 Chancellor Angela Merkel is mooting 5 bln euros in auto subsidies. A similar plan saved jobs at Volkswagen and Daimler in 2009. But the incentives would cover 2 mln vehicles – barely half last year’s sales. If the pandemic has permanently dented demand, a bigger boost is needed.
Corona Capital: Tech diversity, CNN’s middle age 1 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: As big U.S. technology companies’ CEOs speak out about racial inequality, working from home trends could give them a chance to make a real difference; and 24/7 news network CNN feasts on Covid-19 as it turns 40.
India Insight: Mukesh Ambani sets high bar for Jio 1 Jun 2020 At $68 bln, the tycoon’s telecom operator is being valued like a tech startup. It’s backed by A-list investors from KKR to Facebook, and more are queuing up. Growth has been impressive. But the wannabe super-app could encounter serious competition in the country’s digital race.
Mall-to-retailer relationships will get creative 29 May 2020 Brookfield Asset Management launched a $5 bln fund to invest directly in retailers. It’s an effort to salvage some of the Canadian mall owner’s top customers. As Neiman Marcus and J.C. Penney march into bankruptcy, other real estate owners will rethink traditional rents, too.
German carmakers step on Chinese electric pedal 29 May 2020 VW is taking big stakes in two Chinese EV firms, while Daimler may invest in battery-maker Farasis Energy’s $480 mln IPO. Demand remains tepid, oil is too cheap, and the targets look richly priced. But these deals lock in supply, and position both to compete with Tesla in China.
Virus bailouts will be messier than past rescues 29 May 2020 Governments are ponying up trillions of dollars to save lockdown-hit firms. Further assistance looks inevitable as economies falter. States will demand higher taxes and jobs in return, putting them at odds with private owners. And lending to smaller firms creates bigger tensions.
Corona Capital: Saving/not spending, Pandemic Pig 29 May 2020 Concise views on the pandemic’s corporate and financial fallout: what to make of falling spending and the growing taste for meat alternatives.
China can live with a less special Hong Kong 28 May 2020 The entrepôt's unique autonomy brought prosperity without Beijing having to cede control of the economy and people. Hong Kong’s importance has dwindled, however, and may even be holding China back. A U.S. move to strip its special status only shows how disposable that status is.
Chinese online tutor gets lesson in multiplication 29 May 2020 GSX Techedu deflected one sloppy short-seller attack and a second sensational one. A third from Muddy Waters calling the $7 bln company a fraud hit as Luckin buckled and Congress moved on U.S.-listed Chinese stocks. Growing scepticism will require targets to have strong defences.
Amazon steers towards self-driving leverage 28 May 2020 Jeff Bezos’s $1.2 trln behemoth is one of the obvious big buyers of autonomous vehicles. Acquiring startup Zoox would give it an even bigger say in how the technology gets rolled out. That would also help deepen its customers’ dependence on Amazon’s fast and cheap shipping.
Twitter can’t please everyone but still has to try 28 May 2020 Fact-checking a President Trump tweet has put founder Jack Dorsey in a political spotlight he had previously avoided. A spring clean of tweets is good for business in the long term. But unlike peers, Dorsey needs to please shorter-term investors too, like activist fund Elliott.
Exxon climate activists can call in reinforcements 28 May 2020 Environment-linked resolutions won less backing at the $193 bln energy firm’s annual meeting on Wednesday than at rivals’. Replacing directors is the next logical step. It’s a task traditional activists are more used to – and Exxon’s poor financial record could pull them in.
Activist curve will get flattened by the pandemic 28 May 2020 Dozy boards are crying out for prodding as Covid-19 ravages businesses. But balance sheets will need to be more, not less, robust. And pushy investors can hardly point to great returns. After years of barging down doors, they should prepare to have more slammed in their faces.
Boohoo’s shopping spree needs to nail more looks 28 May 2020 The $5 bln UK online fashion group is buying out minority investors in peer prettylittlething for $400 mln. The fair price counters short-seller warnings of an overly generous payout. Yet the retailer will need to stretch beyond skin-tight tat to justify its own rich valuation.
TikTok’s best move is a clean break from ByteDance 28 May 2020 The video app’s Chinese parent is shifting power away from the People’s Republic. That’s unlikely to win over American lawmakers suspicious TikTok will collect consumer data and send it back to Beijing. ByteDance’s most realistic political option is to sell its rising star.
Vacant arenas fortify TV’s financial grip on sport 28 May 2020 When games restart, distancing rules will mean emptier soccer and baseball stadiums. Sports which rely less on live crowds, like golf or Formula 1, may benefit. More home viewers should further boost the value of media rights, already worth $51 bln, and offset lost ticket sales.
Big Tech faces a post-virus global tax onslaught 28 May 2020 The OECD’s efforts to fashion a fairer global tax system are at risk of stalling. France and Britain already levy charges on the revenue of Facebook, Amazon and others. With public debt soaring and the pandemic boosting Big Tech’s sales, a messy patchwork of levies could ensue.
IWG war chest burnishes anti-WeWork credentials 28 May 2020 The UK office group raised 320 mln pounds to fund acquisitions. Unlike its troubled rival, IWG has little debt and is expanding when competitors are retrenching. CEO Mark Dixon’s plan still relies on the hope that companies will need as much real estate once the lockdown ends.