China’s Sina fires up governance Wayback Machine 8 Nov 2017 Days after escaping a board insurgence effort, the web outfit issued new stock that hands control to its chairman. It retroactively aligns Weibo's parent with Silicon Valley structures just as momentum swings against them. It's a bad turn for China Inc that also cost $500 mln.
Broadcom grows its way to strategic dead end 7 Nov 2017 The acquisitive chip company has become so big that it needs to take larger and riskier bets to maintain its super-charged expansion. Its $130 bln unsolicited offer for Qualcomm qualifies on both counts. If successful, Broadcom will be short of targets that can move the needle.
Bill Ackman is losing his touch 7 Nov 2017 Fewer than one ADP shareholder in four backed the activist's bid for board seats at the payroll processor. That puts his Pershing Square hedge fund on a three-year losing streak after failed bets at Valeant and Herbalife – and makes it easy for other firms to ignore his demands.
Hong Kong tech fervour defies Western IPO wobbles 7 Nov 2017 Investors have snapped up shares in Razer, a maker of keyboards for gamers, and China Literature, an electronic publisher backed by Tencent. That contrasts with signs of IPO fatigue in New York and London. Limited supply, particularly in tech, has helped keep the market healthy.
Broadcom deal cements boutiques’ M&A takeover 6 Nov 2017 Moelis is heading up the chipmaker’s $105 bln Qualcomm bid. It’s not the largest transaction an independent adviser has led, but it’s striking for one so dependent on financing. With smaller firms now prominent in most big deals, the bulge bracket risks becoming just dumb money.
Broadcom lenders shed prudence just as it’s needed 6 Nov 2017 The chipmaker’s advisers are “highly confident” of arranging finance for its $105 bln Qualcomm bid. Ample liquidity, low defaults and easing regulations have banks itching to lend. But rising corporate leverage and looser covenants pose big risks for anyone coming to the dance.
Broadcom faces down ghost of chip LBOs past 6 Nov 2017 The $111 bln soon-American-again chipmaker offered $105 bln for Qualcomm. If the unsolicited bid goes anywhere, borrowing nearly $90 bln would send debt-to-EBITDA ratios towards leveraged buyout territory. Two former chip LBOs – Freescale and NXP – give pause for thought.
SoftBank pace should endure after Sprint stumble 6 Nov 2017 Boss Masayoshi Son ditched a deal between his U.S. mobile operator and rival T-Mobile US, losing out on some $10 bln in synergies. SoftBank investors have two solid consolations: a long-term case for keeping control of Sprint and a slew of investments at the $98 bln Vision Fund.
U.S. rally, pain at home deter China tech’s return 5 Nov 2017 After a bold take-private deal last year, software maker Qihoo’s $8 bln backdoor listing has hit a regulatory snag. Meanwhile, shares of U.S.-listed Chinese outfits are outperforming those on the mainland. Tech firms considering an escape from New York might rethink their plans.
Chinese auto-trading IPO may prove to be a lemon 5 Nov 2017 Yixin is preparing a Hong Kong IPO. Connecting auto buyers, sellers and lenders is good business as China’s car market booms and millennials embrace debt. But a mooted value of up to $6.5 bln sounds over-revved. Even if the float goes well, the stock could later go into reverse.
Investors put their chips on Broadcom mega-deal 3 Nov 2017 Fresh off its plan to move to the United States, the semiconductor firm is weighing a $100 bln bid for rival Qualcomm, Bloomberg reported. The industry is consolidating while patent and regulatory woes make the target vulnerable. An exuberant market reaction could seal the deal.
Sina’s board wins Yahoo-like prize 3 Nov 2017 Bosses of the $8 bln Chinese web outfit thwarted a U.S. hedge fund's quest to add two directors. Sina's big problem is that it's worth less than its big stake in Weibo. As Yahoo laid bare, it can be hard to run a company whose value sits elsewhere – regardless of who's in charge.
The Exchange: Ellen Pao 2 Nov 2017 The investor sued Kleiner Perkins for discrimination, becoming a canary in the coal mine for a raft of sexual-harassment and gender-bias allegations rocking Silicon Valley, Hollywood and beyond. She discusses if this is a turning point for what she describes as a systemic problem.
BT leaves decisive dividend call on hold 2 Nov 2017 The UK telecoms group kept its interim payout flat and raised the prospect of investment in pricey full-fibre networks. Increasing the dividend while pleasing regulators may prove tricky. But ducking the trade-off for now means shareholders will have to dial up the uncertainty.
Parts makers offer safer Auto 2.0 bets than Tesla 1 Nov 2017 Elon Musk’s outfit trades at an outlandish valuation on hopes it’ll lead the electric and autonomous car revolution. Yet it routinely misses targets and faces intense competition. Battery makers like LG Chem and Tesla partner Panasonic may pave a less volatile road to riches.
Tencent’s hit spinoff reads like a prologue 1 Nov 2017 China Literature’s $1.1 bln IPO priced at the top of the range. That could encourage parent Tencent to list other units, which would both raise capital and lessen the regulatory scrutiny on some businesses. The most radical move would be floating crown jewel WeChat.
Emerson’s tilt at Rockwell lacks killer blow 31 Oct 2017 The rejected $28 bln offer for the U.S. automation group represents a premium of just 15 pct, paid partly in stock that has systematically undershot Rockwell’s. With valuations high, an all-cash bid might have tested the target’s independence. That looks beyond Emerson’s means.
WPP woes cement Mad Men bargain-basement valuation 31 Oct 2017 The group may cut targets for the third time this year. Advertising firms are grappling with frugal customers and online sales. Investors rate them as lowly as media dinosaurs like newspaper sellers. M&A options look tricky. Their best bet is to hope clients start spending again.
Sony’s success may delay further disentangling web 31 Oct 2017 The Japanese group riding high on Spider-Man is also thriving in games, chips and music. It now expects annual operating profit to hit a record $5.6 bln. That's testament to a long overhaul, but also increases a temptation to stay in areas like phones, TVs and financial services.
Samsung’s new bosses will have to be generous 31 Oct 2017 The tech giant is raising dividends to at least $26 bln through 2020. A tweaked returns policy also gives Samsung's three fresh CEOs-in-waiting and newly separate chairman room to hand back even more. That would help keep outside investors onside for an eventual restructuring.