Deals

AT&T and Comcast alike in debt, not in risk

18 June 2018

Big acquisitions will leave the telco and cable firm with more than $170 billion of debt each. At first, Comcast’s bid for bits of Fox would create the heavier relative leverage load. But it’s AT&T’s recently closed merger with Time Warner that looks more vulnerable.

Smurfit Kappa loses a suitor, may gain an activist

6 June 2018

The Irish paper group irritated shareholders by stonewalling a 9 billion euro offer from International Paper. And it trades at a discount to rivals. Hitting ambitious targets would help close the gap, but an impatient investor could push for a breakup.

CBS, Shari Redstone litigate selves off M&A rails

17 May 2018

A judge denied the $20 bln media firm’s restraining-order request against its controlling shareholder. But CBS may be able to argue Redstone is breaching her fiduciary duty. It almost ensures a long legal drama that’ll shunt deals with Viacom or other companies onto the sidings.

Vodafone’s $22 bln deal is worth financial strain

9 May 2018

The UK mobile group is buying Liberty Global’s German and eastern European assets. Boss Vittorio Colao is funding the deal with debt and funky convertible bonds. He can point to juicy cost savings to quell any concerns about Vodafone’s creaky balance sheet.

WPP’s post-Sorrell era starts with glimmer of hope

30 April 2018

The UK ad group’s sales were broadly stable in the first quarter, allaying fears that the exit of long-time CEO Martin Sorrell would prompt clients to flee. And buyout group CVC may be eyeing WPP’s market-research arm. Together that warrants a smaller valuation discount to peers.

Once-bitten merger arbitrageurs are twice Shire

27 April 2018

The $62 bln Takeda bid should in theory be an attractive hedge-fund plaything. A yawning gap between the offer value and the target's share price suggests otherwise. Multiple currencies and time zones act as deterrents. So too do the scars from Shire's deal with AbbVie.

Sky upside depends on Disney-Fox irrationality

25 April 2018

Brian Roberts’ Comcast formalised a $31 bln bid for the UK group. Rival suitors Bob Iger and Rupert Murdoch, of Disney and Fox, will struggle to match the U.S. cable giant’s synergies. Sky investors betting on a counteroffer must hope the media moguls ditch financial logic.

Poker group bets $5 bln on Sky-high sports growth

23 April 2018

Canada’s Stars Group is buying UK online sports-gambling specialist Sky Bet. The price is more than current owners CVC and Sky would have got in a mooted IPO. For Stars, the debt-heavy punt only works if Sky Bet’s rapid growth continues - or the U.S. relaxes sports-gambling laws.

Shire makes needy suitors work for risky bet

19 April 2018

The London-listed pharma group has rejected a 42 bln pound offer from Osaka-based Takeda, and may now face a bid from Botox-maker Allergan. Shire’s business has its challenges, but its would-be acquirers have strategic issues and need a deal. The risk of overpaying is going up.

Qatar/Exxon love-in makes two types of sense

12 April 2018

Deepening its relationship with the Texas-based oil major would tie the Arab state more closely to the U.S. after recent tensions with Saudi Arabia. It also gets Exxon investing in infrastructure. That could open up the global market, to the benefit of both parties.

Tenneco and Icahn pull a mini DowDuPont

10 April 2018

The U.S. auto-parts maker is paying $5.4 bln including debt for Federal-Mogul, owned by the investor’s listed entity. The plan is to break the merged company into two, boosting the overall value. Shareholders shoulder risk when deals have several steps. But the logic holds up.

Travelport must hope Elliott inspires others

26 March 2018

Paul Singer's hedge fund has put the travel-tech company in play by taking a 12 pct stake, and may even make a bid. The risk is Elliott could bully the company into a bad deal, but the potential to boost margins makes it a ripe target. Shareholders should welcome wider interest.

Blackstone’s Schwarzman schools CIC on art of deal

14 March 2018

China’s sovereign wealth fund has sold its stake in the private equity firm. CIC only bagged a so-so return from its decade-long investment. For Blackstone’s founder and CEO, meanwhile, the partnership opened some lucrative doors to the world’s second-largest economy.

ArcelorMittal’s India homecoming may be scrappy

14 March 2018

The world’s largest steelmaker is back on the acquisition trail with a $6 bln bid for bankrupt Essar. It paves the way for the family to go back to its roots. The Mittals would face an inhospitable environment, but it's probably manageable for a company spawned by a hostile deal.

Beijing’s Heineken pint will be tough to craft

9 March 2018

Chinese giant CR Beer is in talks to buy the local assets of its Dutch rival for over $1 bln. Premium international brews are attractive in a stagnating market. But fixing the deal terms will be tricky: global players are fiercely protective of their brands.

Cigna pays over the odds for uncertain benefit

8 March 2018

The insurer is paying $54 bln for pharmacy middleman Express Scripts in the latest healthcare consolidation move. Express’s business has stalled and the FDA’s campaign for drug-price transparency threatens its model. Cigna’s $13 bln premium is not a sure prescription for growth.

Chinese bidders find new way to collar their prey

8 March 2018

Geely’s boss used an “equity collar” to amass a $9 bln stake in automaker Daimler fast, and without much hard currency. HNA has done something similar at Deutsche Bank and Swiss travel retailer Dufry. Other Chinese firms could use derivatives to make their money go further.

HNA is enjoying a pleasant stay at Hilton

7 March 2018

The cash-strapped Chinese group bet $6.5 bln on the U.S. hotelier, using lots of borrowed money. It has now sold stock in the spun-off Park Hotels for $1.4 bln, while retaining another $7.6 bln stake. HNA has been a crazily prolific investor, but this trip was worth it.

Miners face a multibillion-dollar growth debate

28 February 2018

The big diggers have emerged from 2017 in rude health: BHP, Rio and Glencore's combined net debt is down to a third of where they ended 2013. The challenge is how to go beyond better payouts. Geology and high prices mean the next phase of growth may be unorthodox.

Alibaba delivery deal could be tasty side dish

27 February 2018

The $500 bln e-commerce outfit may buy the rest of Chinese startup Ele.me, which gets meals from restaurants to homes. Simply battling rival Meituan Dianping would be costly. If it can enhance Alibaba's payments, groceries and parcels businesses, though, it makes much more sense.