Divestment

GE’s Larry Culp is playing a bad hand well

11 September 2019

The CEO is selling what he can to save what he must. Ceding control of oil services firm Baker Hughes will mean a hefty writedown for the conglomerate, but it brings divestments to nearly $20 bln on his watch and reduces leverage. That buys Culp time to fix GE’s troubled core.

UK building supplier adopts Peltz’s American dream

3 September 2019

Ferguson plans to spin off its British unit and focus on the United States, as suggested by the activist. Trading more in line with U.S. peers should boost shares in the 14 bln pound group. But UK-based holders could make moving the primary listing to New York a tough project.

CNH can release valuation brakes with truck split

30 August 2019

The $14 bln Italian-American tractor-to-van group may spin off its struggling commercial vehicle unit, Bloomberg reports. Investors might pay more for a purer agricultural play. And independence might help the subscale vehicle business, whether on its own or in stronger hands.

TechnipFMC may work better with split personality

27 August 2019

The $11 bln French American oil and gas servicer is breaking in two not long after merging. Investors in the Paris-listed engineering unit will need a higher risk tolerance, though orders are booming. The remaining pipes and wells business should benefit from a higher multiple.

Bristol-Myers passes $74 bln deal’s first big exam

26 August 2019

The drugmaker is stretching to buy ​rival Celgene. To smooth U.S. antitrust review, it put its target’s blockbuster psoriasis treatment on the market. Amgen has won that prize, for an unexpectedly rich $13 bln. That’s a boost for Bristol-Myers’ deal rationale – and its timing.

Transatlantic pet care deal will need grooming

20 August 2019

Elanco is paying $7.4 billion in cash and shares to buy Bayer’s animal-health division. The deal may make more sense for the seller than the buyer. The Eli Lilly spinoff will have to ramp up sales and deliver on ambitious cost-cutting plans to make a success of its acquisition.

Knight Vinke tilts at new European energy windmill

20 August 2019

The activist investor doesn’t want its 1.3% stake in Swiss utility Alpiq to be squeezed out in a delisting. The offer does look undervalued. But as with its other European energy interventions, Knight Vinke’s worthy crusade for shareholder justice faces stiff headwinds.

G4S carve-out lacks compelling valuation bump

9 August 2019

The British security firm is spinning off its cash-handling unit, a no-brainer given the shift to digital money. That allows more focus on its core business of guarding people and businesses. But a share price bump requires investors to place a high value on the latter.

Healthineers robot buy puts big price on old veins

8 August 2019

The $41 bln Siemens spinoff is paying $1.1 bln for Corindus, which helps automate vascular operations. It’s paying a vein-popping 100 times revenue to stay ahead of Philips in the race to fix ageing blood vessels. Healthineers will have to pump up growth to justify the price.

Bolloré hits right note to mute Vivendi doubters

6 August 2019

The French tycoon may sell 10% of Universal to China’s Tencent at a price that values the music label at 30 billion euros. Sceptics who feared a deal wouldn’t happen this year will be silenced. But more selloffs are required to erase Vivendi’s persistent conglomerate discount.

Indian mogul’s ode to Anglo ends on duff note

26 July 2019

Anil Agarwal is dumping his roughly 20% stake in miner Anglo American. The complex holding structure, dubbed “poems” by creator JPMorgan, meant he only partly profited as the target’s shares soared. The bigger prize, meshing it with his Vedanta empire, also proved elusive.

WPP disposal offers cautionary tale for Publicis

2 July 2019

The UK ad group is selling the debris from a debt-driven acquisition spree under former boss Martin Sorrell. Its $12.3 bln French rival is borrowing to splurge on a data business. Publicis’ lowly valuation shows investors fear that CEO Arthur Sadoun may repeat Sorrell’s mistakes.

John Malone’s M&A nous gets short shrift in Europe

28 June 2019

The cable cowboy’s Liberty Global should get $15 bln of cash from Swiss and German asset sales. A lowly share price means investors are worried Malone will waste the money. That’s unmerited: share buybacks and further selloffs seem likelier than a risky acquisition.

Casino takes baby step on road to redemption

28 June 2019

The French grocer has simplified its Latin American structure. The bankruptcy of Casino’s parent company Rallye frees it to recapture some value for investors, and offloading stakes in Latam supermarkets would cut leverage. A focused French business could be an easier sell.

Greyhound activist gets few scraps from board coup

25 June 2019

Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.

Bristol-Myers drug sale tests $74 bln Celgene deal

24 June 2019

U.S. trustbusters have butted in once again, forcing the divestiture of a lucrative treatment. Bristol-Myers could have off-loaded its own nascent drug. Instead it may be hoping for a big price. That would support the idea that Celgene was undervalued, but it’s a riskier path.

VW $17 bln IPO gets reform drive back on the road

14 June 2019

The German carmaker is offering a smaller slice of its truck unit at a lower valuation, after delaying the float in March. It’s a sign that CEO Herbert Diess wants to simplify the group even if proceeds are less than hoped. That’s encouraging for VW’s often-ignored investors.

Anbang’s Dutch cast-off hopes for third time lucky

10 June 2019

Apollo-backed Athora is paying the defunct Chinese group 2.5 bln euros for insurer Vivat, its third owner in five years. The sale spares the blushes of the Dutch regulator for approving the previous sale. The new Bermuda-based owner is not risk-free but looks relatively safer.

Bayer animal-health buyout will need heavy petting

3 June 2019

Private equity groups are itching to get their hands on the German group’s flea-powder and tick-collar unit, the FT says. To earn a decent return, a new owner would need to supercharge sales, boost margins and cut R&D. Even then, the mooted 8 bln euro price tag looks excessive.

Chevron’s North Sea deal eases its wounded pride

30 May 2019

The U.S. oil major has sold its assets off the British coast for $2 bln, at a better valuation than recent deals have fetched. Buyer Ithaca should still make a decent return. Chevron shows it hasn’t completely lost its dealmaking nous after being jilted at the altar by Anadarko.