Capital Calls: Telefonica cutbacks 4 Jan 2024 Concise views on global finance: The telecoms group and unions have agreed a plan to lay off more than 3,400 staff at a cost of 1.3 bln euros. The number looks high but it’s lower than expected cost savings and a previous accord. Labour representatives could have done better.
Microsoft will finally make its mark in mobile 29 Dec 2023 The software giant has famously tripped itself up in smartphones for years, but boss Satya Nadella is primed to play catchup. His Activision and OpenAI deals pave the way with ‘Candy Crush’, Xbox and ChatGPT. Bruising app wars at Apple and Google may exact a high price, however.
Spain’s Saudi telecoms shield is pricey and futile 20 Dec 2023 Madrid is buying 10% of Telefonica to protect it from the kingdom’s stake-building. But Prime Minister Pedro Sánchez already has tools to block the Gulf investor taking a board seat or a bigger share. Splurging taxpayer money unnecessarily looks risky for a new government.
Vodafone may have to answer Iliad’s Italian call 18 Dec 2023 French tycoon Xavier Niel’s new bid for his UK rival’s business in Italy values it at a chunky 10.5 bln euros. That’s near what he offered last year despite falling earnings at Vodafone’s local arm. CEO Margherita Della Valle may struggle to find a more attractive exit strategy.
Altice’s best hope will be a Middle East lifeline 18 Dec 2023 Telecoms tycoon Patrick Drahi is dismantling his empire to cope with a $60 bln debt wall. Attracting new investors may be tricky given low growth and a corruption scandal. Luckily Gulf states like the UAE and Saudi Arabia are flush with cash and keen to grab Western assets.
Fourth is with Jana in communications-space wars 8 Dec 2023 The pushy hedge fund wants $5 bln fiber-network builder Frontier to auction itself. Three of its other recent campaigns in the industry – at CyrusOne, Vonage and Zayo – all led to deals. This one’s a tougher sell, but there’s probably a buyer willing to pay a modest premium.
Capital Calls: AI funding 5 Dec 2023 Concise views on global finance: French AI model-maker Mistral is on track to notch a $2 bln valuation from investors like Andreessen Horowitz despite scant revenue.
Romanian telco upstart will be M&A party pooper 30 Nov 2023 Originally a mobile provider for Bucharest expats, Digi Communications is expanding across Europe. It is taking market share thanks to a low-cost model and as regulators force merging rivals to shed assets. A wave of consolidation in Spain and elsewhere may yield some surprises.
Uneasy lies the head of Crown Castle 28 Nov 2023 Pushy investor Elliott is again chiding the $47 bln wireless towers operator, urging it to replace CEO Jay Brown. The shares have dragged under his watch, with costly fiber networks partly to blame. As NRG and Citrix sensed, it’s unwise to slam the door twice on the hedge fund.
Google antitrust trial crystallizes Apple’s risk 15 Nov 2023 Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.
Vodafone CEO M&A job boosts Italy deal confidence 14 Nov 2023 After successfully offloading the telco’s UK and Spanish arms, Margherita Della Valle may sell all or part of its slowing Italian business. Rival Iliad is the top contender. But the division is now worth perhaps 2 bln euros less than what tycoon Xavier Niel offered last year.
Lina Khan’s spirit haunts T-Mobile deal ghost 10 Nov 2023 Consumers are suing the $170 bln telecom company for its deal with Sprint. Given government watchdogs can’t bust up big tech, it seems ambitious. But recent jury verdicts illustrate rising movements against companies. Plus the hassle creates yet another deal impediment.
Telefónica $2 bln German swoop is cheap but risky 7 Nov 2023 The Spanish telco is offering to buy out its Teutonic arm’s minority investors. On the surface, it’s a good time to pounce given the unit’s recent slump. But the immediate financial benefits are sketchy, and the debt-laden parent may have to wait years for a German turnaround.
Telecom Italia rival plan has too many pitfalls 3 Nov 2023 An ex-executive and a fund say the telco could raise 16 bln euros by offloading a Brazilian unit and other assets to slash its debt pile. That would spare it from selling its prized network to KKR. Yet bagging such valuations while executing a multi-step project looks tricky.
Apple’s cash insures against exuberance 3 Nov 2023 The $2.8 trln iPhone maker’s valuation is rich even as growth slows, antitrust worries cloud its services business and trade wars threaten China sales. While investors seem as confident as ever, the company’s balance sheet suggests boss Tim Cook is exercising some caution.
Vodafone CEO’s iffy Spain deal is better than none 31 Oct 2023 Margherita Della Valle is selling her unit in the country for 5 bln euros to a tiny investment vehicle. Part of her payment comprises shares in the highly leveraged buyer, which is yet to raise equity of its own. But even if that effort fails, the deal still works for Vodafone.
Capital Calls: McDonald’s resilience 30 Oct 2023 Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.
Capital Calls: Ford, Amazon 26 Oct 2023 Concise views on global finance: The loss per car at the $45 bln automaker’s electric-vehicle unit has jumped 51% in a year. So-so earnings at the $1.2 trln e-commerce giant’s cloud division beat the even lower bar set by rival Alphabet.
Stolen genetic data points to mutating cyber risk 17 Oct 2023 Biotech firm 23andMe may have fallen victim to hackers, joining other sabotage targets Clorox and MGM. Companies can strengthen their systems, but human error plays a role too – with customers and employees as potential vulnerabilities. That adds a new front to an ongoing battle.
Macquarie’s Norse saga sends telco breakup warning 17 Oct 2023 The Australian firm is mulling options for Danish operator TDC. A lengthy plan to separate its network from its consumer business left both units burdened by debt amid intense competition, which could deter buyers. Others looking to split, like Telecom Italia, may think twice.