Cerberus finds workaround for Northern Rock mess 13 Nov 2015 The private equity firm is paying a premium for 13 bln stg of assets from the collapsed UK lender. It helps the state’s finances, but leaves Cerberus to fund a big portfolio itself. Selling a 3 bln stg chunk to TSB, and better securitisation markets, suggest a way to do so.
Biotech firm’s stock buyback emits bad bouquet 12 Nov 2015 NantKwest wants to snap up a large chunk of stock at a big discount to its July IPO. Yet the biotech controlled by Patrick Soon-Shiong needs the money as it’s likely to burn cash for years. A buyback would, though, prop up the price ahead of an expiring lockup for executives.
Apple and banks spoil for electronic-payment fight 12 Nov 2015 JPMorgan, Wells Fargo and others may let customers send money over the iPhone maker’s network. All are playing catch-up to the likes of PayPal and Facebook. The Apple Pay plan may wrest back some control for banks, but also portends an intense battle for money flows.
John Malone triples down on complexity 12 Nov 2015 The U.S. cable TV mogul plans to turn the $13 bln Liberty Media’s shares into three tracking stocks, each with three classes. Malone is an old hand at using shadow stocks to reshape his empire, tax-free. But investors may find the legerdemain more confusing than clarifying.
Rolls-Royce can emerge from turbulence intact 12 Nov 2015 Cutting next year’s pre-tax profit estimates by a third will intensify calls for a break-up of the UK engine maker. But that would neither solve Rolls’ problems, which mostly stem from past strategic errors and cheap oil– nor would it make much sense at the current share price.
Amundi’s so-so listing sums up Europe’s IPO market 12 Nov 2015 Shares in the Credit Agricole-owned asset manager opened just above the issue price, at the lower end of its original range. Anything less would have been a failure for the 15 banks on the deal. The valuation reflects concerns about the business – and new stocks in general.
Argus sale opens up obscure corner of oil market 12 Nov 2015 Oil price reporting agencies are the plumbing of a $2.5 trillion market – and Argus, which has put itself on the block, is one of the biggest. Expansion is an option for a buyer. Private equity should be interested, but the nuances of pricing oil may be too edgy for some.
UniCredit opts for fingers-crossed capital plan 11 Nov 2015 The Italian bank’s strategy to boost returns and capital involves a credible dose of cost-cutting. But to boost its core Tier 1 ratio to a still-unexceptional 11.5 pct, it will need topline growth that may not materialise. It may not be enough to close UniCredit’s discount.
New Vivendi looks muddled 11 Nov 2015 The French media group has turned itself into a pure music and pay-TV group. But both units face a tough market and need “heavy investments”, the company said in its third-quarter update. It’s also hard to see the payback from buying stakes in Telecom Italia and gaming groups.
E.ON sets dismal scene for dirty power spinoff 11 Nov 2015 The German utility has taken a $9 billion charge on the value of power plants and oil and gas exploration business in the third quarter. The charge does not affect actual cashflow but highlights the grim prospects of the units E.ON will spin off by 2016 under the Uniper brand.
Fed feeds Goldman conspiracy-theory machine 10 Nov 2015 Hiring former dealmaker Neel Kashkari to run Minneapolis means the investment bank’s alumni are in charge of three of the central bank’s 12 regional branches. It’s great fodder for those seeking evidence of a system in thrall to Wall Street and Goldman. The reality is less juicy.
Banks and big media wake up to aggregation risks 10 Nov 2015 An array of websites and apps allow consumers to see multiple financial accounts in one place. BofA is the latest lender to resist. Similarly, Netflix aggregates TV shows and media companies are showing more hate than love. Both traditional industries are fighting the tide.
Regional banks grab hold of repo grenade 10 Nov 2015 Wells Fargo, Nordea and Sumitomo Mitsui are bulking up in a form of short-term collateralised lending, as big investment banks pull back. Yet buoyant “repo” financing may carry hidden risks. The market played a central role in the financial crisis - and much of it remains opaque.
ABN Amro IPO merits discount for ugly structure 10 Nov 2015 The Dutch state is hawking up to 23 pct of its erstwhile problem child, valuing the bank at up to 18.8 bln euros. The price range seems attractive relative to listed peers. But a markdown is warranted given an anti-takeover provision that could rescind investors’ voting rights.
Vodafone could break new ground with India IPO 10 Nov 2015 The mobile giant has taken a step towards listing its India unit, which could be worth $14 bln. With a 25 pct free-float, it could be the country’s largest ever offering. An outgoing wrangle over tax and new competition could prove thorny, but this is the kind of listing India’s bankers dream about.
Dud IPO adds fuel to Rocket’s downward trajectory 10 Nov 2015 Cash-burning e-commerce investor Rocket Internet pulled the listing of startup HelloFresh. A $2.8 bln valuation for a loss-making delivery firm of ready-to-cook meals rightly did not sway investors. Rocket shares have more than halved this year, but may have further to fall.
Match’s IPO profile is alluring but with strings 9 Nov 2015 The dating-sites owner pegs its worth as high as $3.6 bln. Much of that derives from Tinder, its fast-growing swipe-to-like app. The numbers make for an attractive and credible stock. It’s a risky proposal, though, and Barry Diller’s IAC looks like an overbearing chaperone.
New York coal settlement could be climate canary 9 Nov 2015 Peabody’s deal with state prosecutors over misleading atmospheric risks may inform a similar probe of Exxon. Though the lack of fines is a weak sign, the miner at least must share its assessment of possible climate rules. That could expose the danger of stranded energy assets.
Yahoo needs truth rather than report from McKinsey 9 Nov 2015 The struggling internet site has hired the firm for advice on new opportunities. It’s unclear, though, what management consultants can do to arrest the company’s descent that a procession of CEOs hasn’t already tried. A blunt memo recommending a sale would make better reading.
Lonmin buys time but platinum is bigger problem 9 Nov 2015 A $407 mln rights issue at an eye-popping 94 pct discount will allow the South African miner to postpone a day of reckoning with its creditors. Lonmin has bought itself a reprieve, but this won’t fix the platinum price, or help it avoid another strike at its Marikana mines.