Divestment

Dan Loeb hits limits of “constructivism” on Nestlé

2 July 2018

A year after disclosing a stake, the activist investor called on the Swiss giant to shake up its business and board. Though his ideas make sense, progress has been slow and the stock has lagged. He could take a more muscular approach, but only if other shareholders go along.

Micro Focus $2.5 bln sale amplifies growth problem

2 July 2018

The British tech group’s disposal of an open-source software unit is helping its share price, which halved in March. Yet the source of its problems, a troubled former HP division, now accounts for more of the group’s revenue. A tricky turnaround has become even harder to execute.

Novartis contact lens spinoff defies messy optics

29 June 2018

Separating its Alcon eyecare division is an admission of failure for the Swiss pharma group, which spent $52 bln on the unit seven years ago. Though the listing won’t unlock much value, it should help Alcon’s recovery, and let new boss Vasant Narasimhan focus on making drugs.

Caixabank wisely exits Spain property party early

29 June 2018

The lender has sold real estate assets worth 12.8 bln euros to Lone Star, at a better valuation than deals by Santander and BBVA. With prices recovering, Caixa could have got an even better outcome by waiting. Given the mess the sector has made, moving now makes more sense.

GE breakup ushers in brave new era

26 June 2018

CEO John Flannery is spinning off the ailing $111 bln conglomerate’s healthcare unit and selling Baker Hughes, ending more than a century of growth. Focusing on aviation and power has risks, but the plan slashes debt and makes GE manageable. It was Flannery’s only logical choice.

Altice’s $2.9 bln towers sale locks in 5G premium

21 June 2018

Patrick Drahi’s telecoms group has secured a high price for the possible sale of stakes in its French and Portuguese mobile towers. It’s a vote of confidence from private investors like KKR in new superfast networks. But it only makes a modest dent in Altice’s $36 bln debt pile.

Adyen’s $17 bln pop flags bipolar IPO market

13 June 2018

The Dutch payments group’s shares doubled on its market debut, defying a recent trend for flops like publisher Springer Nature. It shows investors are putting a premium on companies that promise growth. The risk is that, as with Adyen, they end up giving away most of the upside.

Morrisons can pilfer from larger rivals’ trolley

7 June 2018

The merger of J Sainsbury and Walmart-owned Asda leaves the UK grocer in a distant third place. Boss David Potts could counterbid, but drumming up similar synergies looks tough. Better to lobby against the deal, and grab market share and the best shop locations if it goes ahead.

RBS stake sale makes the best of a bad job

5 June 2018

The UK’s sale of an 8 pct holding in the state-dominated bank is miles below where it bought in a decade ago. But it’s not below what the government needs for its budgetary requirements. And if anything it’s above what RBS is actually worth.

Dutch $8 bln payments IPO banks fat growth premium

5 June 2018

Amsterdam-based Adyen is listing shares at a higher multiple than peers. That’s arguably justified by booming sales and racy customers like Netflix and Facebook. But card groups like Visa and tech giants are vying for a slice of the payments pie, likely hurting intermediaries.

DS Smith’s repackaging could have further to go

4 June 2018

The UK paper group is buying Spain’s Europac for 1.9 billion euros. As online shopping boosts demand for box materials, more European tie-ups are likely. One could be an International Paper deal for DS Smith, if the former’s bid for Smurfit Kappa finds the wastepaper basket.

Bayer M&A magic beans are cheaper but less fertile

4 June 2018

The German group’s acquisition of seed-maker Monsanto finally won regulators’ approval. The lengthy antitrust process and disposals mean Bayer is paying $3 bln less than expected and raising less equity. But it won't be able to cut as many costs, and the return is still sparse.

Investors risk whiplash in car parts M&A standoff

31 May 2018

Shares in German headrest maker Grammer are trading 10 pct above an offer from Ningbo Jifeng. That’s optimistic. A big Bosnian investor is unlikely to counter-bid, and the Chinese group just needs another 25 pct to win control. Selling in the market may be the safest option.

BT network sale has too many parties to please

29 May 2018

Infrastructure groups may be eyeing the British telco’s broadband arm. BT would need to extract a high valuation and retain control to avoid spooking pension trustees. Any buyer planning to load the business up with debt risks angering politicians eager for more investment.

Red-faced Wesfarmers walks away from UK botch job

25 May 2018

The Australian DIY giant has offloaded its Homebase subsidiary to management. It racked up losses of almost a billion pounds in two years of disastrous tinkering with the previously profitable business. At least the company has now accepted it doesn’t understand the market.

Smurfit Kappa’s aloofness looks justified, for now

24 May 2018

The Irish packager spent 460 mln euros on a Dutch mill after snubbing a bid from International Paper. That may bolster the case for staying solo, even if its obduracy is angering shareholders. But the U.S. group can afford to pay more, and make Smurfit’s cold shoulder untenable.

French telco M&A requires more than regulatory nod

22 May 2018

The sector’s supervisor has had a change of heart and is now open to dealmaking. Price wars and investments have bled operators dry. The weakest, Altice and Iliad, are the likeliest targets. But the former is too laden with debt and the latter may be cheaper in a year’s time.

Emirates NBD’s Turkish deal riskier than it looks

22 May 2018

The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.

Insurers risk retreading banks’ pre-crisis folly

22 May 2018

Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.

Hyundai U-turn puts Asia investors in higher gear

21 May 2018

The South Korean conglomerate slammed the brakes on a $9 bln restructuring after investors revolted. It's a big step in a region where shareholders are often given short shrift. Alongside other recent upsets, Hyundai's is welcome evidence the balance of power is shifting.