The Gap stitches together an M&A opportunity 28 Feb 2019 The $10 bln clothier is spinning out faster-growing Old Navy from its other brands, saying they serve different customers. It’s not like the struggling retail sector needs another listed company. But it might not have one for long, if the more successful arm can attract a buyer.
Hard times favor skinny conglomerates 28 Feb 2019 Kraft Heinz’s stumble has dealt another blow to the notion of the diversified roll-up M&A machine. United Technologies, GE and Newell Brands had already got that message. Conglomerates can still work if they stay lean and keep cash on hand. Take Kraft investor Berkshire Hathaway.
Lampert tightens grip in slow strangle of Sears 16 Jan 2019 The hedge-fund manager’s $5.2 bln bid won the bankruptcy auction for the embattled retailer. That may keep the doors open for now. But in his 13-year tenure atop Sears, Lampert has starved it of cash and sold assets. Unless he changes tack, a slow-motion liquidation looks likely.
New Look makeover is bad trend for UK high street 14 Jan 2019 The ailing retailer is writing off three-quarters of its 1.35 bln pounds of debt in an effort to repair its finances. Like rival Debenhams, it can only survive if UK high street sales pick up. But after a bleak Christmas and with Brexit looming, a revival looks far from assured.
Ford’s European repair job may need outside help 10 Jan 2019 If boss Jim Hackett hits long-term profit targets, the carmaker’s market value could rise by $10 bln. Yet that requires implausible cost cuts. Partnering with or selling to a continental rival might be better. Peugeot’s purchase of GM’s European arm shows both sides can benefit.
General Electric can go from bad to worse in 2019 11 Dec 2018 The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.
Och-Ziff truce and rejig are small mercies 6 Dec 2018 Daniel Och is finally giving up his pioneering listed hedge-fund creation. After massive value destruction and a power struggle, he is ceding control and a big ownership stake. The firm will also be taxed as a corporation, not a partnership. For investors, the road back is long.
GM top-tier reshuffle may both boost and backfire 29 Nov 2018 The $52 bln carmaker’s second-in-command Dan Ammann is taking the wheel at Cruise, the unit that makes self-driving vehicles. The ex-Wall Streeter is the right person to whip it into shape and prepare for a possible IPO. But GM boss Mary Barra is losing her chief problem solver.
Hello concentration, goodbye conglomeration 27 Nov 2018 United Technologies is splitting into three while also closing a deal that creates an aerospace-parts giant. Like DowDuPont and others, activists and a need for competitive heft leave companies little choice – though tariffs and economic concerns stole $96 bln UTC’s show.
Michelangelo deal is work of abstract art 23 Nov 2018 Chinese waste hauler Yulong Eco-Materials has decided to become an owner of paintings and gems instead. It’s paying $75 mln for the Italian master’s “Crucifixion” after it bought a $50 mln sapphire. Bringing art investing to public markets is a risky form of creative destruction.
GE may be canary in credit market’s coal mine 15 Nov 2018 The firm’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all credit investors. U.S. companies carry more debt than ever, and quality has deteriorated. Rising interest rates and slowing growth could make this a big problem.
GE eases blow with Baker Hughes share sale 13 Nov 2018 The $70 billion industrial company is selling a chunk of its 62 percent stake in the oil-services firm a day after it said it urgently needed cash. The timing isn’t optimal. But it is better to do something than nothing, and GE can test the waters while saving dignity.
P&G lathers up for a close shave 9 Nov 2018 The $230 bln consumer-goods giant is reorganizing into six groups, each with its own CEO. Boss David Taylor argues that’ll give them greater focus. But it also makes it easier to trim off any groups that fail to perform. Grooming may be first for the barber’s chair.
UK landlords’ lifeboat has a Debenhams-shaped leak 11 Sep 2018 As British retailers flounder, the groups that rent them floor space have been pointing to continuing robust demand for prime locations. Debenhams’ potential restructuring not only threatens a key source of rental income. It also undermines landlords’ main counterargument.
Greece needs a governance reboot 21 Aug 2018 International lenders forced Athens to clean up its banks. Yet non-financial companies and their boards are still often dominated by large shareholders. Better protections for minority investors would attract more foreign capital, and help the economy recover from its bailout.
Hammerson tinkering reflects strategic impasse 24 Jul 2018 The UK landlord needed to atone for an Intu deal U-turn and its spurning of a Klepierre merger. A buyback and flogging 1.1 bln pounds of assets doesn’t quite do so. The problem is that even at their lowly valuation selling more UK assets looks hard to do.
HNA’s market thaw provides only cold comfort 20 Jul 2018 Three listed units of the troubled Chinese conglomerate lost a combined $1.5 bln in value after long trading halts ended. It signals a lack of confidence about HNA’s restructuring plans as it regroups without its late chairman. Pity investors trapped by a 10 pct downside limit.
Steinhoff swaps sovereignty for a lifeline 19 Jul 2018 A debt deal with creditors means the scandal-hit retailer is close to removing the imminent threat of default. Lenders have to wait three years to get paid. But on paper they get a higher payout, a say on asset sales and returns that might otherwise go to shareholders.
John Malone could still snag iHeartMedia 10 Jul 2018 Even though lenders to the bankrupt U.S. radio operator snubbed his last offer, the media tycoon has a chance thanks to the potential for a merger with his own Sirius XM. As iHeartMedia edges toward a $20 bln debt restructuring, there should be room for a harmonious deal.
Telstra’s slashing falls short of a full strategy 20 Jun 2018 The $26 bln Australian telco will cut one in four jobs, sell assets and put infrastructure in a standalone unit that could raise fresh capital. CEO Andy Penn’s austerity beats past scattergun attempts at reinvention. But there is no clear growth plan to get investors fired up.