Second Sainsbury run could make sense for Qatar 15 Oct 2009 The UK supermarket chain s shares leapt on rumours of a reprise of the 2007 Qatari approach, crushed by the beginning of the credit crunch. That eleventhhour retreat left the investors looking amateurish. But they are savvier now and Sainsbury s shares are cheaper.
AB InBev gets hangover insurance from Blackstone 8 Oct 2009 The Budweiser and Stella brewer has offloaded its American theme parks arm to the buyout firm for $2.3bn. Getting a deal done at all is an achievment. But AB also gets to skim off $400m from Blackstone's profits, dulling the pain of selling cheaply.
Kraft should bid below Cadbury’s share price 2 Oct 2009 The US foods group has until November 9 to make a formal bid for its UK rival. Breakingviews imagines a shareholder advising Kraft CEO Irene Rosenfeld to raise her bid from 745p a share but not much.
Femsa turns up late to the beer bash 2 Oct 2009 The Mexican maker of Dos Equis happily sipped alone as rivals swapped brews. Now it wants to join in just as many wouldbe suitors are nursing debt hangovers from other deals. Without the froth, remaining bidders are less likely to pay top dollar for Femsa s bitter aftertaste.
Hostile M&A unforgiving of nuance 24 Sep 2009 Cadbury s CEO has unwittingly given the impression he sees logic in Kraft s unsolicited takeover proposal, and that his job is to get a full price. It s possible to reconcile his words with Cadbury s official denigration of the bid. But the slip still weakens the defence a bit.
Cadbury smart to force Kraft’s hand early 22 Sep 2009 The UK confectioner wants the takeover authorities to make US rival Kraft launch a formal offer or withdraw its unsolicited £10bn approach. The intensity of Kraft s advance means retreat is unlikely. But Cadbury is pressing the issue while it still has the market on its side.
Pilgrim’s Pride investors should do the funky chicken 21 Sep 2009 Brazil's JBS is plucking the poultry company out of bankruptcy for $2.8bn meaning creditors are paid in full and equity holders even get a few nuggets. With stock prices buoyant, there's a chance other bust companies will also pay back more than was thought possible.
Suntory is ideal buyer for Blackstone’s Orangina 10 Sep 2009 The Japanese drinks group may reportedly pay over $2.6bn for the iconic French juice brand. Suntory would be the fourth owner in eight years. Orangina might not be growing fast but, with the Japanese drinks market shrinking, its privateequity owners may well get a fizzy price.
Cadbury break-up faces sticky obstacle 8 Sep 2009 A NestléHershey joint bid might be more attractive to the UK confectionery group than an offer from Kraft. But there s a snag: both white knights may be interested in keeping the same bit of Cadbury. Hershey would need a carrot to be persuaded to take the piece Nestlé can t.
How much more can Kraft pay for Cadbury? 8 Sep 2009 If the food giant wants to avoid sacrificing value for growth, it should resist paying a premium greater than the value of synergies. Based on similar deals, Kraft can squeeze out over $625m of annual costs. But that still only justifies a slight bump from what s on the table.
Kraft will need to sweeten hostile £10bn Cadbury pitch 7 Sep 2009 The food giant's opening offer of a 31% premium isn't compelling, especially since it is mostly in USlisted paper. But a combination makes sense and Kraft s synergy estimates are conservative. Upward revisions could fund a more generous offer.
Big Beer tests Obama’s tolerance 26 Aug 2009 It s uncanny to see AB InBev and MillerCoors raising prices at the same time during a recession and while beer demand is slumping. With an 80% market share between them, it almost begs for an industry antitrust review.
Dole re-equitisation good early test for LBOs 17 Aug 2009 The US food company filed for a $500m IPO to refinance debt that s the legacy of a 2003 MBO. Many leveraged companies will be forced to follow in its wake. But Dole has the earlymover advantage and its performance is good big legs up.
Pepsi bottlers’ $7.8bn deal looks reasonable 4 Aug 2009 PepsiCo boosted its cashandstock offer for the parts of the two bottling companies it doesn t already own by nearly $2bn. That may still undervalue synergies, but the bottlers get the chance to benefit from any upside. It s not a bad outcome for targets with little leverage.
Beer wars open a new front in Africa 31 Jul 2009 A legal skirmish between SABMiller and Diageo could presage allout warfare for Africa s beer drinkers. A forecast 4% economic growth rate and fat margins have executives salivating. The old Africa hands at SAB may not like it, but competition should eventually help everyone.
US corporate profit surprises may not last 23 Jul 2009 A third of the way through the US reporting season, secondquarter earnings look far better than expected thanks to cost and inventory cuts. But those are relatively quick, easy fixes. Longer term, profits depend on economic growth and rising sales. Those will come more slowly.
Starbucks gets into the poetry beat 16 Jul 2009 The java giant is restyling three Seattle stores as indie coffee houses, serving up wine and poetry slams. This could be a smart extension, like the ones some clothing retailers have managed. But it s not without risks of its own.
Godzilla of Beers could take on global giants 13 Jul 2009 A merger of Japan's Kirin and familyheld Suntory would create a superbrewer, albeit in a declining suds market. A backofthebeermat analysis suggests synergies worth $12bn but the real prize would be to create a new consumer giant big enough to stamp its footprint overseas.
Danone’s E3bn cash-call shows need to reposition 26 May 2009 The French water and yogurt company wants to cut debt while maintaining the flexibility to make acquisitions. It got overleveraged when it bought babyfood maker Numico two years ago, and is exposed to a shrinking mineralwater market. Danone needs to adapt to a changed world.
SABMiller finds traditional recipe for growth 14 May 2009 The intrepid beer giant just opened a brewery in Sudan. Such expansions are helping, but more conventional techniques brought most of the resilience in a tough year. Tight cost control and hefty price increases worked wonders and that was with ingredient costs at record highs.