Dan Loeb’s Honeywell spin goes too far 5 May 2017 Hiving off the $100 bln conglomerate’s aerospace unit could boost the stock. But the activist’s argument that it would increase shareholder value by a fifth is a stretch and ignores the benefits the unit brings to Honeywell. New CEO Darius Adamczyk has other levers to pull first.
VW-Fiat Chrysler merger too tempting by half 4 May 2017 Welding together the German and the Italian-U.S. carmakers might unleash cost savings of more than $38 bln. As the auto industry gets more challenging, and Fiat Chrysler boss Sergio Marchionne more eager to sell, that prize may trump memories of previous car deals gone wrong.
Time for Siemens investors to forget troubled past 4 May 2017 For decades, the German engineering group’s poor margins and talent for botching large-scale projects justified a persistent discount to peers. Quarterly results confirm turnaround CEO Joe Kaeser has fixed both issues. If shareholders agree, Siemens could be worth 9 pct more.
Safran can wiggle out of Zodiac mess in own time 28 Apr 2017 The French engine maker clearly needs to reduce or scrap its 8.2 billion euro bid for the plane-seat maker. The current offer, a third above Zodiac’s share price, is financially and politically daft. But there’s no rush to renegotiate. Clever timing might produce a better result.
Arconic takes battle of letters to Elliott 24 Apr 2017 The parts maker offered to back two of the activist's four board picks but accused Elliott of twice reneging on agreed compromises. The exit of CEO Klaus Kleinfeld after his own intemperate screed has not relieved the tensions. Regular shareholders may by caught in the crossfire.
PPG raised offer kicks hole in Akzo’s door 24 Apr 2017 With a 50 pct premium, guarantees for European workers and a big break fee, the U.S. paint maker’s third approach for its Dutch rival leaves CEO Ton Buechner no choice but to engage. The onus would then be on PPG to explain how this rich 24.6 bln euro deal makes financial sense.
SNC-Atkins implies more risk for buyer than seller 21 Apr 2017 Canadian engineering firm SNC-Lavalin is forking out 2.1 bln pounds for UK peer WS Atkins. Given that the synergy benefits cover the premium, it looks mutually beneficial. But while Atkins gets a 42 pct cash premium, SNC’s rich cost-saving targets are less set in concrete.
Akzo’s go-it-alone plan has a rose-tinted hue 19 Apr 2017 The besieged maker of Dulux paint is wooing investors by breaking itself up and becoming more profitable. On paper, the strategy is superior to merging with U.S. rival PPG. In reality, lifting margins by a quarter until 2020, while cutting fewer jobs, looks a stretch.
Swede tissue bid justifies breakups without tears 13 Apr 2017 Forestry group SCA reportedly received an offer for the hygiene business it is about to demerge. Above $22 bln for the unit’s equity would be good. Either way, SCA has given itself options. Others faced with calls to break up, from Akzo Nobel to BHP Billiton, can take note.
Active boards needn’t fear activist investors 12 Apr 2017 Dulux paint maker Akzo Nobel wants to stymie a vote on whether its chairman should go, after he rebuffed a $24 bln bid from rival PPG. That makes it look like the company is trying to stifle debate. While activists can overplay their hand, good managers still have the advantage.
German pump maker launches farcical take-under 30 Mar 2017 Family-owned Busch is exploiting a German market quirk to bid 1.1 bln euros for peer Pfeiffer, below the current price. It may then be free to raise its stake at leisure. Oddly, Busch is offering more than it has to. Still, it’s not a great advert for German takeover rules.
Unilever can take page from GE’s activist playbook 29 Mar 2017 The 139 bln-euro Magnum ice-cream owner may attract uppity investors for the same reasons Kraft Heinz came calling: low margins and relatively little debt. CEO Paul Polman could keep them at bay by aping GE and seeking an activist's advice. But he'd have to be willing to act.
Akzo activists are useful and best ignored 29 Mar 2017 Holders of a quarter of the Dutch paint maker’s shares think it should engage with hostile bidder PPG, claims activist fund Elliott. Yet by rushing into talks, Akzo would play a trump card too early. Appearing lukewarm, but with shareholders still keen, may lure a better offer.
PPG bid for Akzo fails narrative and maths tests 24 Mar 2017 The U.S. paint and coatings maker says cost savings and the benefits of scale justify a $24 bln offer for its Dutch rival. It’s hard to tell a more visionary tale in a low-growth sector where consolidation is the way to stay ahead. But PPG’s synergy targets don’t add up either.
Hadas: The stakeholder revolution has been delayed 22 Mar 2017 Robust takeover rebuttals by Unilever and Akzo Nobel suggest that explicitly ethical stakeholder capitalism can overturn the idol of short-term shareholder value. That mostly makes economic sense. But the pressure for quick financial results is increasing. Compromise, please.
Akzo shareholders, beware the double-Dutch defence 22 Mar 2017 The maker of Dulux paint says a sweetened $24 bln approach by U.S. rival PPG is bad not just for shareholders but the community, customers and employees. It’s hard for a suitor to counter those claims. If such defences become the norm, expect fewer takeovers and lower valuations.
Piech exit only small step to VW governance revamp 20 Mar 2017 The 79-year-old patriarch may sell his stake in the carmaker to younger family members. The next generation should be keener on shareholder value than empire building. But while Ferdinand Piech’s vanity will be history, VW’s bigger burden - flawed governance - remains intact.
Renault’s main risk is Ghosn exit – not emissions 16 Mar 2017 The carmaker’s shares lurched on reports of French authorities’ allegations of emissions cheating. Unless Renault’s protestations of innocence are bogus, the concerns look overblown. A far bigger problem for the group would come if boss Carlos Ghosn were to be shunted aside.
PPG will struggle to paint by Akzo Nobel numbers 15 Mar 2017 A $22 bln proposal to mix the makers of Glidden and Dulux pigments was rejected by the Dutch target. To make a sweetened bid deliver even a reasonable return, PPG will have to apply ultra-glossy cost savings. For shareholders, the outcome would more likely be corrosive.
Star-crossed Zodiac deal works at half the price 15 Mar 2017 Engine maker Safran’s 8.2 billion euro offer for its plane-seat making compatriot looks a bit sick after Zodiac popped out a profit warning. It’s a chance for the buyer to renegotiate a poor deal. But the value at which it would make sense is far, far lower.