Yum China plays proficient game of deal chicken 26 Apr 2019 Boss Joey Wat and her board rejected an $18 bln buyout approach led by Hillhouse last summer. After detailing KFC expansion plans and a Pizza Hut turnaround, the shares are now flirting with the offer price. That puts pressure on Yum China to fully justify a standalone strategy.
China’s wannabe Starbucks brews a muddy IPO 23 Apr 2019 Luckin Coffee is rushing to deliver a New York listing before its business plan leaks. Its prospectus argues fair value doubled in three months, and an April round put the company’s worth at nearly $3 bln. Its money-losing model and murky corporate structure leave a bitter taste.
Kraft Heinz new boss is a good palate cleanser 22 Apr 2019 Miguel Patricio is not an entirely fresh ingredient for the food company – he ran marketing at AB InBev, created by Kraft’s second-largest shareholder. Both companies have underperformed in recent years. That said, his focus on marketing may break the company’s holding pattern.
Unilever could use a few Nestlé diet tips 18 Apr 2019 Decent first-quarter revenue growth at both consumer giants means their 2020 margin goals can live another day. But Unilever’s foods business expanded just 1.5 percent organically compared to 3.4 percent overall at Nestlé. The Anglo-Dutch group needs to overhaul its pantry.
Apollo’s grocery-store double dip looks digestible 17 Apr 2019 Leon Black’s buyout shop is buying niche food retailer Smart & Final for the second time in 12 years. The chain’s earnings have come under pressure of late. But at $1.1 bln Apollo isn’t paying a fat multiple. And its knowledge of the firm and the industry should serve it well.
Viewsroom: Wells Fargo searches for a leader 11 Apr 2019 The U.S. bank may be tempted to recruit from splashy peers like Goldman Sachs. But there are better reasons to poach from smaller firms. Meanwhile, the $170 bln Chinese liquor maker Kweichow Moutai is worth more than Diageo. Breakingviews columnists discuss the firewater’s draw.
Holding: Investors ignore law of “stuff happens” 11 Apr 2019 Using fiascos like oil-well blowouts and tainted burritos to claim stock fraud is increasingly common in the United States, but misguided. Companies have a duty to disclose significant risks, not warn of unlikely mishaps. Arguing otherwise enriches lawyers at investors’ expense.
China’s firewater punch diluted by a political put 9 Apr 2019 The $170 bln Kweichow Moutai is now worth about as much as Diageo, Pernod, Campari and Remy combined. Eye-popping earnings and foreign interest have fuelled a 50 pct stock price surge this year. But officials in Beijing keep its valuation from reaching maximum intensity.
AB InBev shareholders get more smoke, less 3G 20 Mar 2019 The brewer nominated former Altria CEO Martin Barrington as chairman. Though he’s not linked to the Brazilian investment firm that jointly controls the $143 bln company, the Marlboro maker is a shareholder. Investors who want a more radical shake-up have an opportunity to say no.
China’s Starbucks rival pushes its luck 13 Mar 2019 Lu Zhengyao, Luckin Coffee’s chairman, wants a $200 mln personal loan in exchange for a role on the upcoming IPO, Reuters reports. Such hubris suggests the delivery-focused chain, which faces intensifying competition, is overheating. Investors should beware getting scalded.
Meituan Dianping drives itself to distraction 12 Mar 2019 The $42 bln Chinese super-app operator grew fourth-quarter sales by a robust 89 pct. Meituan’s entire valuation is reflected in the strength of its food delivery unit against Alibaba-owned Ele.me. That raises fresh questions about costly ride-hailing and bike-sharing diversions.
Cox: Unilever can’t help but mull a Kraft pounce 7 Mar 2019 The tables have turned since the Cheez Whiz maker bid for its rival. At $40 bln Kraft is worth a quarter of its erstwhile prey. Unilever can afford a deal, export its culture and reap synergies. But Kraft’s portfolio may be a poison pill unless used as a prelude to exiting food.
Kraft Heinz new recipe could start with the board 6 Mar 2019 The $40 bln ketchup maker’s board is stocked with representatives of its main shareholders and has plenty of consumer expertise. But Kraft Heinz has missed a trick. Its rivals have more flavor from other industries. Having disappointed investors, there’s room for fresh insights.
Just Eat’s final course looks unappetising 6 Mar 2019 The UK takeaway group’s sales are soaring and it has a lead in its home market. The problem is that Uber and Deliveroo are eating its lunch. Just Eat can sell assets like the Brazil unit, but investors would be left with a group with no head chef and better-funded competitors.
Goudet exit shows AB InBev model’s last dregs 6 Mar 2019 Chair Olivier Goudet is leaving the brewer because of conflicts with his role at JAB. Both groups share a taste for buying assets, and cutting costs. Yet the tension with JAB’s Snapple or Dr Pepper brands shows the strategy’s limits, and AB InBev’s need to go beyond alcohol.
LVMH-Pernod bid talk makes for watery cocktail 4 Mar 2019 Ever since activist Elliott showed up at Pernod, Paris has been awash in speculation that LVMH covets the $46 bln spirits group. Adding booze brands like Absolut to its portfolio would dilute LVMH’s luxury profile. Bernard Arnault’s public disavowal of a deal is believable.
AB InBev sets itself an easy target 28 Feb 2019 The Corona brewer pleased investors by unveiling healthy revenue growth and plans to cut net debt to below four times EBITDA by end-2020. The goal is feasible even without a mooted IPO of its Asia unit. Just as well since the company can ill afford big cuts in its marketing spend.
Hadas: The CEO guide to corporate old age 27 Feb 2019 So far this century, real revenue at big U.S.-listed companies is up only about half as much as domestic GDP. Last week’s Kraft Heinz writedown suggests that both bosses and shareholders often harbour unrealistic hopes of doing better. Lower expectations would help everyone.
3G’s special sauce runs out of financial flavor 25 Feb 2019 The Brazilian investment firm’s private equity-style penchant for buying companies, larding on debt and slashing costs can work to a point. But without good strategy, management and a plan for an exit, it can cause problems like those now besetting Kraft Heinz.
Uber’s Indian takeout will feed future rivals 25 Feb 2019 The ride-hailing giant may swap its local food delivery business for a stake in $3.3 bln rival Swiggy. Checking out of Uber Eats's fastest-growing market will cut losses ahead of a global IPO. It would also prioritise short-term gain over efforts to keep new competitors at bay.