Reckitt slump offers a cue to slim down 18 Mar 2024 The $41 bln Lysol maker’s shares fell sharply after it lost a US court case. One option for Reckitt Benckiser is to separate the nutrition arm, focus of the legal woes. That would ease the hit to the rest of the group, but also leave a new arm that may yet be worth something.
Liberty Global’s buyback has grounds to go large 8 Mar 2024 Shares in the $7 bln telco conglomerate are down 12% since it announced a restructuring of its scattered units last month. After flagging new buybacks for 10% of the stock, CEO Mike Fries joked he was taking the group private very slowly. Maybe he should – but fast.
Bayer’s inertia will make mounting problems worse 5 Mar 2024 The $30 bln seeds and drugs maker has ruled out a rapid breakup. Bayer could have used a consumer health sale to cut debt and offset bigger US litigation costs. Betting instead that it can grow its way out of trouble risks exacerbating a yawning discount to the sum of its parts.
Boeing’s reverse deal thrust augurs small tailwind 4 Mar 2024 Jettisoning supplier Spirit AeroSystems in 2005 benefited the plane-maker, but only temporarily. Financial weakness is now compounding 737 MAX woes and hurting shareholders of both companies. Buying back the $4 bln former subsidiary should generate value in quality improvement.
Vodafone’s Italy exit puts speed before valuation 28 Feb 2024 The UK telco looks poised to sell its hard-pressed local business to Swisscom for 8 bln euros in cash. The price tag is lower than a previous Iliad offer. But it’s a cleaner exit, and advances boss Margherita Della Valle’s goal of prompt M&A to make her company less sprawling.
DSM’s China de-risking plan hinges on booster shot 15 Feb 2024 Shares in the $30 bln Dutch firm surged 14% on plans to hive off its unit that makes vitamins for cattle. DSM is right to steer away from a business hurt by Chinese competition. But management needs it to recover to justify investors’ enthusiasm.
Capital Calls: Lyft 14 Feb 2024 Concise views on global finance: The US ride-hailing firm mistakenly forecast 500 basis points of margin improvement for 2024, causing its stock to surge some 60% before it came back to earth.
Unilever is test case for ‘edible stranded assets’ 2 Feb 2024 The $123 bln consumer goods group relies on brands that look vulnerable to sugar taxes and changing eating habits. Like oil majors facing lower demand, Unilever and others like Nestlé may have to write down the value of these assets. Unfortunately, the problem defies easy fixes.
Holcim split cements deglobalisation trend 29 Jan 2024 The $43 bln Swiss building materials giant is separating its fast-growing North American arm from its remaining operations in an attempt to unlock value. The striking thing is that investors appear to view Holcim’s global scale as a brake on value, rather than a driver of it.
Paramount suitors chase a Pyrrhic deal prize 11 Jan 2024 Warner Bros Discovery and David Ellison’s Skydance are weighing a deal for the media company. The former could reap $3 bln in savings while the latter would control the movie studio it already does business with. Either way, Paramount lumbers under debt and would be subscale.
Narrow exits will fatten fattest buyout fat cats 10 Jan 2024 Some private equity shops may be forced to start accepting discounted valuations on a record $2.8 trln of unsold investments. Others like KKR and EQT are best positioned to hold out. This disparity should help 25 firms, with 22% of the industry’s firepower, pad their dominance.
Atos plea to creditor banks could backfire 3 Jan 2024 The 780 mln euro French IT group wants lenders to roll over its large debt pile. Plans to raise cash by selling Atos’s cybersecurity arm to Airbus suggest they should. But the company’s threats to seek legal protection if they don’t may give banks pause for thought.
Capital Calls: Eni’s green sale 22 Dec 2023 Concise views on global finance: The Italian energy major’s 10 bln euro valuation for its retail-and-renewables arm Plenitude is more likely to be recreated or exceeded if it avoids a rushed listing.
Price of Illumina’s Grail fail extends to board 19 Dec 2023 The gene-sequencing company finally conceded to selling the cancer-testing business it bought without regulatory approval for $7.1 bln. Its bravado will be costly, as Grail’s value has plummeted. Boss Francis deSouza already paid with his job; directors deserve to, as well.
Altice’s best hope will be a Middle East lifeline 18 Dec 2023 Telecoms tycoon Patrick Drahi is dismantling his empire to cope with a $60 bln debt wall. Attracting new investors may be tricky given low growth and a corruption scandal. Luckily Gulf states like the UAE and Saudi Arabia are flush with cash and keen to grab Western assets.
Vivendi takes slow road to unleashing value 14 Dec 2023 The 10 bln euro French media group may list pay-TV arm Canal Plus and advertising group Havas. That might help controlling shareholder Vincent Bolloré cut Vivendi’s conglomerate discount. A quicker ploy would address the fact that the rump is still a disparate jumble of assets.
Fourth is with Jana in communications-space wars 8 Dec 2023 The pushy hedge fund wants $5 bln fiber-network builder Frontier to auction itself. Three of its other recent campaigns in the industry – at CyrusOne, Vonage and Zayo – all led to deals. This one’s a tougher sell, but there’s probably a buyer willing to pay a modest premium.
Glencore’s split is yet to be copper-bottomed 6 Dec 2023 Having merged its coal assets with Canadian miner Teck’s, the $70 bln Swiss group is eyeing a spinoff. But boss Gary Nagle faces a tricky call on what to do with oil trading. And the appeal of a coal-clean metals split may hinge on whether Teck’s own separation creates value.
Bayer drug fail is symptom of growing breakup pain 20 Nov 2023 Shares in the 33 bln euro group fell 20% after it aborted a late-stage trial. Given drugs regularly fail, that’s excessive. Instead, investors’ main concern could be that a grim pharma outlook and litigation risk in Bayer's seeds unit mean a planned split may release less value.
Vodafone CEO M&A job boosts Italy deal confidence 14 Nov 2023 After successfully offloading the telco’s UK and Spanish arms, Margherita Della Valle may sell all or part of its slowing Italian business. Rival Iliad is the top contender. But the division is now worth perhaps 2 bln euros less than what tycoon Xavier Niel offered last year.