Month: May 2018

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.

Insurers risk retreading banks’ pre-crisis folly

22 May 2018

Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.

Vanguard puts bond fund managers on notice

21 May 2018

The giant fund firm wants to launch the first U.S. exchange-traded product for global fixed-income. Rising rates pose risks to those who buy it, but the $54 trln bond market is largely untapped by cheap index trackers. Active securities pickers will have one less place to hide.

Blackstone relives Hilton on a boutique scale

21 May 2018

The buyout firm offered $3.7 bln for hotel operator LaSalle, wading into a bidding war just after it sold its remaining stake in Hilton. That earlier deal took more than a decade to close out. With riskier properties and a higher valuation, this new foray will be tougher.

Wall Street data merger chases $10 trln dream

21 May 2018

IHS Markit is snapping up Ipreo from Blackstone and Goldman for $1.86 bln to bulk up the information it can sell on alternative assets from private equity to real estate. It’s a booming area crying out for more transparency – and spurring plenty of competition on data.

Bank investors lose the plot over $4.7 bln merger

21 May 2018

Fifth Third is paying a 24 pct premium for fellow U.S. lender MB Financial. The Chicago-based target gets the better deal – it has struggled to grow earnings and lent almost to its limits. But cost cuts and the logic of consolidation make Fifth Third’s share slump look excessive.

UK’s tough-guy act on Russia can only go so far

21 May 2018

Britain’s delay over the renewal of Roman Abramovich’s visa comes against the backdrop of a wider clampdown on Russian oligarchs. Its sanctions on Moscow, however, contain holes. Closing them requires EU support and a readiness for the City to lose out in the crossfire.

GE CEO finally shunts turnaround plan onto tracks

21 May 2018

John Flannery is selling the struggling conglomerate’s sputtering locomotive unit to Wabtec for $2.9 bln and half of the new outfit, most to be spun off to shareholders. It’s not transformational but it removes a big headache and indicates how Flannery might shed other assets.

Hadas: Vatican asks the right financial questions

21 May 2018

A new document approved by Pope Francis criticises speculative trading in derivatives and provides helpful guidelines for reform. It’s not just Catholics who see that finance needs to serve the common good. A moral commitment to restrain financial excess could help curb populism.

Italy has room to bluff its way with Europe

21 May 2018

The likely government’s plans to boost spending and keep Monte dei Paschi state-owned break European rules. A revived economy, low rates and weak EU leadership give it a better hand than previous rebel Greece. And Europe needs to avoid a clash that could end the single currency.

Deutsche fightback begins with legacy asset reveal

21 May 2018

The German lender’s balance sheet includes about 50 billion euros of unprofitable trades which drag down its investment bank’s return on equity. Reporting them separately would attract attention to past mistakes – but also offer a clearer picture of the bank’s recovery.

Hyundai U-turn puts Asia investors in higher gear

21 May 2018

The South Korean conglomerate slammed the brakes on a $9 bln restructuring after investors revolted. It's a big step in a region where shareholders are often given short shrift. Alongside other recent upsets, Hyundai's is welcome evidence the balance of power is shifting.

Breakdown: EU gains new powers for Big Tech fight

21 May 2018

Europe’s new privacy rule, the GDPR, prohibits covert data gathering and allows users to have information moved or deleted. The likes of Google and Facebook may initially find it easier to comply than smaller companies. But over time they’ll face a hostile EU with new weapons.

ArcelorMittal paying an odd bid “premium” in India

21 May 2018

The world's largest steelmaker is ready to cover $1 bln of debt in a tiny rival it no longer backs so it can buy bankrupt Essar. A quirky rule bans owners of defaulting companies from acquiring distressed assets. It's a sign of how India’s bankruptcy law is a work in progress.

Baidu gets $9 bln warning to stay the course

21 May 2018

The surprise exit of COO Lu Qi sparked a big drop in the Chinese search engine's shares. He helped Baidu focus on search and AI, lifting the company's market value since his arrival from Microsoft in 2017. Boss Robin Li has been sent a strong message about what investors want.

U.S.-China trade deal kicks nearly every can

21 May 2018

Beijing agreed vaguely to reduce imbalances and improve IP rights, both of which it has signaled before. A U.S. demand that China shrink its surplus by $200 bln went missing. Such details may yet get hammered out, but Xi Jinping's industrial policy looks safe amid the detente.

Ant Financial quacks like a bank

21 May 2018

The Alibaba-linked outfit is pitching itself as more tech than fin to secure a $150 bln valuation. With over 600 mln users relying on it for payments, wealth management and loans, though, Ant is part of the fabric of Chinese finance. Beijing would be wise to regulate accordingly.

The Exchange: The failure and future of globalism

18 May 2018

Not everyone has been a winner from globalization. Eurasia Group founder Ian Bremmer talked to Amanda Gomez about his book “Us vs. Them: The Failure of Globalism” and discussed what political and business leaders can do to make the world economic system work for all.

United shareholders fly into more turbulence

18 May 2018

CFO Andrew Levy, hired to help the embattled $19 bln airline in dogfights with cheaper rivals. is leaving after less than two years. As its chairman also takes off, United looks less able than peers to combat rising oil prices and seat capacity hitting margins. Time to buckle up.

Les Moonves is starting to endanger his record

18 May 2018

The CBS boss has done shareholders proud. Yet wading into what may be a long legal fight with controlling owner Shari Redstone serves no one. It also suggests a touch of hubris. The overpaid Moonves has it covered, though: If he’s fired, he could pocket more than $100 mln.

EU’s Iran sanctions riposte is late and lame

18 May 2018

The bloc took 10 days to come up with a plan that will give its companies cover if they defy U.S. restrictions. That’s unlikely to stop businesses pulling out of the Islamic Republic. The dollar’s dominance in the financial system limits Europe’s ability to offer real protection.

Review: Silicon Valley gets a reality transfusion

18 May 2018

“Bad Blood” tells how Theranos, a company with a single flawed idea, attained a $9 bln valuation. A combination of need, greed, ignorance and hubris made it possible for a seductive fairy tale to outpunch scientific skepticism. Companies can’t live on stories forever, though.

PayPal takes $2.2 bln step into physical payments

18 May 2018

The online pioneer is buying iZettle, which provides mobile card readers to small merchants. The valuation is higher than U.S. rival Square, and twice the Swedish group’s mooted IPO value. For PayPal, though, it’s a worthwhile move to expand its appeal to real-world retailers.

Barclays trolls activist with Irish mortgage foray

18 May 2018

The UK bank has bought a 4.3 bln pound book of Irish mortgages for 4 bln pounds. With fees from securitising the loans and investors lined up, the deal could make sense. But it sits awkwardly alongside new investor Edward Bramson’s strategy to prune the investment bank.

UK’s costly royal wedding is worth every penny

18 May 2018

The marriage of Prince Harry to Meghan Markle may cost taxpayers as much as 30 mln pounds. If the transatlantic union prompts a small increase in American tourism, the expense can be recouped. In an era of isolationism and political volatility, it’s an efficient soft power boost.

Settling 1MDB scores will be easier than debts

18 May 2018

Malaysia’s new government can reopen investigations in the state fund but they are stuck with its debt. Reckless promises of support, and a previous desperate clean-up, put the state on the hook for about $8 bln. Trying to dodge these obligations would do more harm than good.

Citi’s Hong Kong slap has lesson for new IPO boom

18 May 2018

The securities watchdog fined the U.S. lender $7 mln over a troubled 2009 flotation. One failing was a lack of oversight from senior staff. As a wave of biotech outfits, many boasting complex and unproven products, prepares to list, banks in the city will have to stay vigilant.

Singapore Airlines is cruising comfortably

18 May 2018

The $10 bln flag carrier beat forecasts with a 148 pct jump in annual earnings. Its overhaul is working, and a plan to absorb regional arm SilkAir looks sensible. There is more to do, but the group can afford to take its time evaluating growth options, including India.