Toshiba has reasons to cling to its cash pile 1 Jun 2018 The scandal-hit Japanese group is poised to finally sell out of memory chips. Having also raised money from hedge funds, Toshiba will have $10 bln of net cash. Yet hurdles to distributing dividends and big transformation plans make large payouts to investors a distant prospect.
Enel’s Brazil dominance needs elbow grease 31 May 2018 The Italian utility offered $2 bln to buy grid operator Eletropaulo, over three times its market value in March. It makes sense for Enel to grow its presence in South America’s biggest country, but extracting value at this price will require hefty cost savings and efficiencies.
Investors risk whiplash in car parts M&A standoff 31 May 2018 Shares in German headrest maker Grammer are trading 10 pct above an offer from Ningbo Jifeng. That’s optimistic. A big Bosnian investor is unlikely to counter-bid, and the Chinese group just needs another 25 pct to win control. Selling in the market may be the safest option.
Wall Street’s software roll-up contains a glitch 30 May 2018 Private equity is on a tech binge. KKR’s $8.5 bln purchase of BMC from rivals led by Bain and Elliott sets the firm up for more deals. Enterprise software is sticky, so this play can mint money. But with copycats lining up, the strategy’s popularity will eventually kill returns.
China is winner in German-Bosnian governance fight 29 May 2018 Manufacturer Ningbo Jifeng may offer to buy out other shareholders of Bavarian auto supplier Grammer. The Chinese group is offering a tiny premium and should make a healthy return. But a lowball exit may appeal to investors weary of a boardroom spat with Bosnia’s Hastor family.
Pret A Manger is new pawn in global coffee wars 29 May 2018 JAB is acquiring the UK food outlet for $2 billion. After spending roughly $30 bln on coffee and food chains over the past two years, the German conglomerate is a growing threat to larger rivals Nestle and Starbucks. An agile and ambitious model gives it a good shot at success.
Red-faced Wesfarmers walks away from UK botch job 25 May 2018 The Australian DIY giant has offloaded its Homebase subsidiary to management. It racked up losses of almost a billion pounds in two years of disastrous tinkering with the previously profitable business. At least the company has now accepted it doesn’t understand the market.
How Comcast can boost its chances of snaring Fox 24 May 2018 The cable group is preparing to scuttle Disney’s $52.4 bln bid for some of Rupert Murdoch’s assets. A major Fox shareholder is receptive to the idea. But Comcast boss Brian Roberts needs more than the best price to get a hearing. He could start by offering a bigger break fee.
Smurfit Kappa’s aloofness looks justified, for now 24 May 2018 The Irish packager spent 460 mln euros on a Dutch mill after snubbing a bid from International Paper. That may bolster the case for staying solo, even if its obduracy is angering shareholders. But the U.S. group can afford to pay more, and make Smurfit’s cold shoulder untenable.
Football is imperfect hedge for hedge fund mogul 24 May 2018 Appaloosa’s David Tepper brings a winning attitude to Carolinas' Panthers, which he’s buying for $2.3 bln. America’s biggest sport is all about active management and performance - a welcome break from the pressures squeezing hedge funds. But data geeks are targeting the NFL too.
Canada adds to global muddle with Chinese M&A veto 24 May 2018 Ottawa blocked the $1.2 bln sale of construction company Aecon to a Beijing-backed rival on national security grounds. The controversial decision could confound trade talks between the two countries. Increasingly, mergers are getting mixed up in the wider geopolitical realm.
Indian hospital deal merits a second opinion 24 May 2018 A Fortis Healthcare director was ousted by shareholders after three others facing a similar fate resigned a day earlier. It’s a rebuke of the decision to sell a minority stake to local tycoons. A fresh review of four other offers by a new board should lead to a better prognosis.
Paddy Power turns M&A into a fantasy sport 23 May 2018 The Dublin-based group is merging its U.S. assets with fantasy-sports business FanDuel. If a recent Supreme Court ruling leads to nationwide legal sports betting, loss-making FanDuel’s users could become valuable punters. The catch is that payback could be a while in coming.
StanChart dream reveals Barclays’ limited options 23 May 2018 The UK bank has considered merging with rivals including Standard Chartered, according to the Financial Times. Combining the two makes little financial sense. But it shows Barclays boss Jes Staley has few obvious ways to boost returns and appease activist Edward Bramson.
Rio Tinto can ease out of Indonesian mine mess 23 May 2018 The Anglo-Australian group may be ready to accept $3.5 bln for its interest in Freeport-McMoRan's Grasberg copper operation. The offer is hardly full, but a deal would save on costs and frustration. It also should make it easier for both companies to extract from a tough spot.
Santos gambles on crude with $11 bln bid rebuff 23 May 2018 The Australian gas group rejected the last in a string of approaches from private equity-backed Harbour Energy. New Chairman Keith Spence is optimistically betting energy prices will stay high. Given the industry’s volatility, this could come to look like a missed opportunity.
Adobe pays princely sum to add to virtual realm 22 May 2018 Graphics design and video production may be the $120 bln software juggernaut’s crown jewels, but Adobe wants to expand in the lucrative land of helping companies go digital. Magento could be key to unlocking faster growth. Yet at 11 times trailing sales, it’s a stiff price.
Sony loudly demonstrates love of content with EMI 22 May 2018 The Japanese group is buying 60 pct more of EMI Music Publishing from a consortium led by Mubadala. A valuation of $4.8 bln, or 19 times EBITDA, is deafeningly expensive. It leaves no room to doubt new boss Kenichiro Yoshida’s belief in a streaming-led recovery for the industry.
French telco M&A requires more than regulatory nod 22 May 2018 The sector’s supervisor has had a change of heart and is now open to dealmaking. Price wars and investments have bled operators dry. The weakest, Altice and Iliad, are the likeliest targets. But the former is too laden with debt and the latter may be cheaper in a year’s time.
Emirates NBD’s Turkish deal riskier than it looks 22 May 2018 The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.