Peugeot’s Tavares could use another deal 24 Jul 2019 The 20 bln euro French group’s CEO quickly turned around Opel Vauxhall, bought from GM in 2017. Now operating margins seem near their peak, and global car sales are stalling. Teaming up with Fiat Chrysler or Jaguar Land Rover would give the famous cost-cutter more fat to trim.
IndiGo row makes case for clipping founders’ wings 10 Jul 2019 The two top owners of India's largest and most profitable airline are at war over an old shareholder deal handing one of them outsize control. Now that the country has laid out strict rules for dual class shares and more, such pacts look like a relic of bad governance past.
Branson’s space deal defies financial gravity 9 Jul 2019 The bearded billionaire is selling half his cosmic travel group to former Facebook executive Chamath Palihapitiya’s blank-check vehicle. A $1.5 bln valuation looks rich given Virgin Galactic’s record of two test flights. Still, it needs cash, and Palihapitiya has too much of it.
Brookfield on slow train to infrastructure payback 1 Jul 2019 The investor and Singapore’s GIC are buying U.S. railroad group Genesee & Wyoming for about $6.4 bln. The return on total investment works out under 5%, partly reflecting the scarcity of transport assets. Brookfield at least has the portfolio and experience to squeeze out more.
San Francisco vaping ban shows warped agenda 28 Jun 2019 Juul Labs’ home is the first U.S. city to block its sales. Local agencies can’t use facial-recognition software. Meanwhile the area has a property-crime problem and human feces on its streets. The place boasting the highest density of billionaires is neglecting basic services.
FedEx gets caught in a trade-war vise 25 Jun 2019 The $41 bln parcel carrier is suing the U.S. government over onerous rules for exports, not least to China. Meanwhile, its own errors may land it on a Beijing blacklist. FedEx can handle a profit hit, but getting embroiled in a tariff fight would put it further behind rival UPS.
Greyhound activist gets few scraps from board coup 25 Jun 2019 Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.
KKR’s $3 bln rail float helps to clear IPO line 21 Jun 2019 UK website Trainline priced near the top of its range and popped 20% after listing in London. Its rapid growth and positive cash flow make an alluring combo, but investors also looked past risks including shifting UK rail policy. That bodes well for fellow IPO travellers.
Deutsche Bahn faces Corbyn haircut on UK rail exit 21 Jun 2019 The German train group is selling its Arriva unit for a mooted 3.5 bln euros. Its British buses and European networks justify the price, suggesting the UK rail franchise comes for free. It’s a fair call given opposition leader Jeremy Corbyn wants to end private ownership.
Ride-hailing misses the U.S. IPO bus 17 Jun 2019 Lyft and Uber are rare laggards among 2019 debutants. Plant-based burger maker Beyond Meat is the top performer, but others involve video chats, online retailing, cybersecurity, and plain old blue jeans. Investors see a bright future – except perhaps in the overhyped gig economy.
Gulf oil risk response looks too sanguine 13 Jun 2019 The price of Brent crude jumped 2.5% after attacks on two tankers near the critical Strait of Hormuz. The U.S. secretary of state blames Iran. With oil still barely above $60 a barrel, the market reaction to this tense situation looks mild. That puts a lot of faith in cool heads.
Uber analysts ride dreams to common destination 4 Jun 2019 They expect the $70 bln ride-hailing app to lose money for years but see various grounds for optimism, from cross-platform synergies to flying cars to demographics. Yet most roads lead to a forecast price upside of around 25%. It’s Wall Street’s form of herd immunity.
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.
Arduous road awaits refueled Chinese used-car app 29 May 2019 Uxin is issuing $230 mln of convertible bonds, including to existing investors TPG and Warburg Pincus. It follows a 70% loss in market value since last year's IPO. A short attack, China’s slowdown and generous terms make it hard to see the deal as accurately calling a bottom.
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.
Car industry second-stringers lock arms to compete 26 May 2019 Renault and Fiat Chrysler are crafting an alliance that could let them cut costs, pool technology and better bargain with rivals. Even without merging, savings could be worth more than Renault’s 15 bln euro market value. Former Fiat boss Sergio Marchionne’s dream is coming true.
UK rail IPO comes with noisy fellow travellers 22 May 2019 KKR may float travel-booking company Trainline, used by Brits to book coach and train tickets, for $2 billion. It’s a rare IPO that is growing quickly and generating cash. The problem is that Trainline is pulling into the station soon after a few high-profile UK tech flops.
Greyhound breakup is worth the trip 20 May 2019 Activist Coast Capital wants the U.S. coach chain’s parent FirstGroup to spin off its loss-making UK parts and stop bidding for rail franchises. Pension liabilities and valuation debates complicate matters. But even on a pessimistic view, investors could double their money.
Growth IPOs exploit total addressable credulity 13 May 2019 Uber says its “total addressable market” is $12.3 trln. Lyft is less exuberant, claiming a mere $1.2 trln TAM, while one estimate of WeWork’s global real-estate opportunity hits over $200 trln. Such heady figures show ambition, but investors need to address the built-in hype.
Nissan could easily tempt a bold activist 13 May 2019 The $31 bln carmaker is resisting deal talks with Renault. An arm’s-length arrangement favoured by boss Hiroto Saikawa will only weigh on Nissan’s value. Pushy investors have been chipping away at corporate Japan. One able to handle the politics could help make the case for M&A.