Infrastructure

Telco tycoons’ UK bets look stuck underwater

25 May 2023

Patrick Drahi, Xavier Niel, John Malone and Abu Dhabi’s e& have lost $2.4 bln on about $13 bln worth of investments in BT and Vodafone, Breakingviews estimates. It’s hard to see either firm recovering soon, leaving their big-money backers potentially stuck in the quicksand.

Capital Calls: BT, Mediobanca

18 May 2023

Concise views on global finance: The 14 bln pound UK telco’s vague guidance is a concern for its two big shareholders seeking to recoup losses; the 8.5 bln euro Italian bank buys its biggest boutique yet.

Gautam Adani’s fundraisings offer multiple tests

16 May 2023

His companies are preparing to tap capital markets for some $3 bln, three months after a short attack succeeded in obliterating $120 bln and 50% off his group’s value. It will test the Indian conglomerate’s reputation, his attitude to public equity, and the besieged regulator.

Capital Calls: Wood Group

15 May 2023

Concise views on global finance: Apollo’s aborted bid for the $1 bln UK infrastructure firm prompted a 35% share price fall.

Capital Calls: Unilever, Shopify

4 May 2023

Concise views on global finance: The consumer goods company may need to backtrack on a pay package for its incoming CEO to quell a shareholder revolt; shares in Canadian e-commerce firm Shopify shot up over 20% after it said it was selling its logistics business to Flexport.

Telecom Italia is stuck in risky game of chicken

4 May 2023

The telco’s board must decide on rival bids from KKR and state investor CDP for its fixed-line grid. None comes close to the 31 bln euro price wanted by top investor Vivendi, but cash is needed to slash debt. If neither side blinks, the group could face a messy capital increase.

Capital Calls: Exxon, US regional banks

28 Apr 2023

Concise views on global finance: Exxon’s two golden eggs are the Permian and Guyana; market composure gives time for a First Republic fix.

Brookfield deal models infrastructure-as-a-vibe

12 Apr 2023

The Canadian investment giant is buying container-lessor Triton in a $13 bln deal. Calling it infrastructure may sound like a stretch, given the volatility of the shipping industry. But if what investors really want is infrastructure-like cash flows, the definition can be broad.

Another cultish cost-saving formula gets off-track

29 Mar 2023

Like GE’s Six Sigma and zero-based budgeting at Kraft Heinz, the railroad version of efficiency has gone too far. It is being tested at $120 bln Union Pacific, where a pushy investor wants devotee Jim Vena to be CEO. New industry concerns suggest it’s time to slam the brakes.

Xavier Niel can feast on European telco misery

27 Mar 2023

The French tycoon has assembled a privately owned telecoms empire worth about $33 bln, Breakingviews calculates. Behind the scenes he’s manoeuvring to further spread his wings. Purchases of stakes in Vodafone and Luxembourg-based Millicom signal the scale of his ambition.

Capital Calls: Bank of England, Wonder drugs

23 Mar 2023

Concise views on global finance: The UK central bank has joined peers in raising rates, but there’s not much room to keep hiking. Meanwhile, a drug that might help smokers’ lung is could be good for makers Regeneron and Sanofi, but even better for society.

CRH’s firm foundations go beyond where it lists

2 Mar 2023

The $38 bln cement maker’s stock rose amid plans to move its primary listing to the U.S. The shift may indeed prompt a re-rating of CRH shares. But the main driver of the latter will be its even greater focus on an infrastructure subsidy-rich market, and on higher-margin work.

Telecom Italia breakup can please all its masters

15 Feb 2023

The sickly telco needs to cut its 25.4 bln euro debt pile. Selling its fixed-line grid to KKR offers a fix, provided the government gets a stake in the strategic asset. For major investor Vivendi, the upside would be a chance to sell Telecom Italia’s revamped service business.

Malone’s Vodafone bet may take years to pay off

14 Feb 2023

Liberty Global bought 4.9% of the telco conglomerate, joining industry rivals Abu Dhabi’s e& and Xavier Niel. Chairman John Malone knows the $31 bln company well and may hope to influence any breakup. A 2015 investment in UK broadcaster ITV shows he’s willing to sit and wait.

KKR can limit the pain of Elliott’s telco blitz

13 Feb 2023

The activist is disrupting the buyout group’s bid for German phone masts firm Vantage Towers. With a 5.6% stake, Paul Singer’s fund is expected to block the delisting until it gets a big payout. But unlike previous Elliott campaigns, KKR has various ways to insulate itself.

Gautam Adani’s crisis will hit India hard

2 Feb 2023

The Indian magnate’s sprawling empire has lost over $100 bln of market value after a short-seller made accusations of fraud. In this Viewsroom podcast, Breakingviews columnists explain why the situation will narrow Adani’s financing options, limiting his infrastructure ambitions.

Capital Calls: Cryptocurrency, Chelsea FC

1 Feb 2023

Concise views on global finance: Britain delivers a blow to digital assets by aiming to regulate them the same way as traditional ones, while the UK soccer team’s new owner Todd Boehly splashes the cash.

Capital Calls: “Angry Birds”, Cellnex

20 Jan 2023

Concise views on global finance: Playtika’s offer for “Angry Birds” maker Rovio may be just the beginning of a takeover saga; a mooted bid for phone tower operator Cellnex comes in the middle of a strategic turnaround.

Snam rethink reflects Europe’s new energy reality

19 Jan 2023

The $18 bln network operator is hiking spending to boost gas flows into Italy and the EU. Stable revenues from such investments can help new CEO Stefano Venier lift EBITDA. But a lighter push into hydrogen and green projects suggests a slower European shift from fossil fuels.

New threats will corrode infrastructure M&A

30 Dec 2022

Blasts that damaged Baltic pipelines in September alerted investors to the physical risks to energy networks from geopolitics. Add growing cyber concerns and the cost of insurance is set to rise. As the appeal of formerly quasi risk-free bets dims, states will surely step in.