UK bank watchdog throws wrench into hostile M&A 5 Jun 2019 Lender Non-Standard Finance scrapped its $1.4 bln bid for Provident Financial after the UK regulator took a harsher-than-expected view on capital. It didn’t help that many shareholders hated the deal. The strict approach means bankers will shy away from similar raids in future.
Thrice-ditched Aussie telco has its work cut out 5 Jun 2019 Swedish fund EQT has dropped its toppy $2.3 bln bid for Vocus after due diligence. Shares dropped 20%. It’s the third financial buyer to walk since 2017. It casts doubt on the target’s efforts to integrate deals. New boss Kevin Russell has to find a way to dial up confidence.
Transatlantic $10 bln chip deal does not compute 3 Jun 2019 Germany’s Infineon is paying a premium of almost 50% to buy U.S.-based Cypress Semiconductor. CEO Reinhard Ploss has given few details on how he will hit ambitious long-term revenue targets. Given the deal’s success hinges on hitting these goals, the price looks too high.
Fiat’s French appeasement game is means to an end 3 Jun 2019 Chairman John Elkann is mulling concessions to get the French state to greenlight the $35 bln Renault merger. A board seat for Paris and some cash shouldn’t risk planned cost savings, or Nissan’s assent. It’s a small price to pay for first-mover advantage in car consolidation.
Carl Icahn is a problem of Occidental’s own making 31 May 2019 The activist is upset about the U.S. shale driller’s $38 bln purchase of rival Anadarko. Oxy boss Vicki Hollub pulled some shareholder-unfriendly moves, like avoiding a vote, even if Anadarko’s disdain for its owners made her do it. Icahn will be ready to pounce on any missteps.
Renault-Fiat merger savings matter more than price 31 May 2019 The French carmaker’s board may feel a proposal by its Italian-American rival takes advantage of a depressed share price. The bigger prize, though, is synergies worth 50% of combined operating profit. If those are credible, Renault should not quibble too much about valuation.
Allianz picks brave moment to double down on UK 31 May 2019 The German giant is forking out $1 bln to lift its exposure to British home, car and pet insurance. Bolting a Legal & General subsidiary onto an existing joint venture will boost scale. But fierce competition, looming regulation and a shaky economy make it hard to ramp up returns.
Hedge funds see honey in Japan’s value traps 31 May 2019 The Land of the Rising Sun dominated Hong Kong’s Sohn gathering. Many see signs of unjustified panic in slumping equities this year, creating opportunities to buy low. But even optimists highlight the cash hoarding and slack governance that have long scared investors away.
Timing may at last be right for CBS-Viacom reunion 30 May 2019 The U.S. media groups are again talking about recombining after two failed attempts. The logic of the possible $29 bln merger has changed little. But with CBS under new management and Viacom neither thriving nor floundering, conflicting egos and valuations are no longer problems.
Viewsroom: A new game of carmaker matchmaker 30 May 2019 Fiat Chrysler spurned Peugeot by offering to merge with France’s Renault, which is itself joined to Nissan. How will the pairings play out, and what does it mean for the automotive sector? Plus: Why fossil-fuel giants like BP are painting themselves a pale shade of green.
Cox: Merger of equals is French expletive 30 May 2019 Fiat and Renault hope to succeed where other deals billed as partnerships failed to deliver on promises to France. From LafargeHolcim and Alcatel-Lucent to TechnipFMC and EssilorLuxottica, hopes have been dashed. Proving the exception requires an understanding of those failings.
Macau mogul picks up Crown jewels for a song 30 May 2019 Lawrence Ho is buying 20% of his former partner’s Australian casino operator for $1.2 bln, less than rival Wynn earlier indicated it might pay. A bet Down Under could play well for the New York-listed group but James Packer’s partial exit is a raw deal for other shareholders.
Chevron’s North Sea deal eases its wounded pride 30 May 2019 The U.S. oil major has sold its assets off the British coast for $2 bln, at a better valuation than recent deals have fetched. Buyer Ithaca should still make a decent return. Chevron shows it hasn’t completely lost its dealmaking nous after being jilted at the altar by Anadarko.
Axel Springer buyout works best with breakup 30 May 2019 KKR may take the $6.6 bln German media group private alongside CEO Mathias Doepfner and the founder’s widow. An unwieldy structure that spans publications like Bild and Business Insider as well as classifieds means a low valuation. Separating the two is the surest route to riches.
Greyhound sale is first leg of owner’s long trip 30 May 2019 Under pressure from an activist, Britain’s FirstGroup is selling the iconic U.S. coach group and spinning off its UK bus unit. Simplifying the $1.8 bln group should unlock value. But uncertainty over timing and liabilities means investors are miles away from their destination.
Berlusconis’ German TV raid looks opportunistic 29 May 2019 Mediaset, controlled by the former Italian prime minister’s family, snapped up 10% of Germany’s ProSieben. There’s a case for Europe’s media groups to combine to fight Netflix, but the move brings the Italians few real benefits. A cheap price is probably the main draw.
Payments bonanza has spoils even for latecomers 28 May 2019 Global Payments’ $22 bln merger with Total System Services is the sector’s third big deal this year. What it lacks in first-mover advantage it makes up for with sensible terms – the premium is less than FIS is giving Worldpay. Missing consolidation would have been a worse fate.
UK contractor crisis leaves lasting scars 28 May 2019 Galliford Try rebuffed Bovis’ $1.3 bln bid for its housebuilding unit. The offer left behind a challenged construction business, that could struggle to access capital. After the collapse of Carillion, investor aversion will force public contractors to shrink, or merge.
Fiat-Renault deal leaves Peugeot in the M&A dust 28 May 2019 The $21 bln auto group looks strategically boxed in now its Italian-American suitor may pair with French rival Renault. CEO Carlos Tavares could try Indian-owned Jaguar Land Rover or General Motors. Yet both Plan Bs lack the $6.3 bln of cost savings he’s missed out on with Fiat.
Nissan gets cheap ride on Fiat Chrysler bandwagon 28 May 2019 The Japanese carmaker could reap over 1 bln euros of savings if 20-year partner Renault merges with its Italian-American rival. It also would curb France’s influence, give Nissan a seat at a bigger table and buy it time to regroup. Diluted strategic clout is a small price to pay.