Americas

Market limbo gets another extension

22 Nov 2012

China’s manufacturers have reported expanding output for the first time in more than a year. Data also show the U.S. recovery continues. These are big pluses. But a plunge in German services indicates the world is running on two out of three engines. European slowdown and the U.S. fiscal cliff will keep markets on edge.

A Hewlett-Packard primer on how not to do a deal

21 Nov 2012

A $12 bln acquisition at a 64 pct premium should involve more due diligence than looking at public financial statements. Don’t ignore your CFO if she thinks the price is way too high. And never buy anything from Frank Quattrone. Breakingviews sketches out the don’ts.

RBS’s Citizens unit all dressed up, nowhere to go

21 Nov 2012

The U.S. bank, with its $120 bln balance sheet, is a prize asset. That should mean a bidding war if UK taxpayer-owned RBS sells it. But the need to pay cash, keep their own investors happy and satisfy watchdogs may give buyers pause. Citizens could remain foreign for a while.

Disney chief’s unlikely fairy godfather: Murdoch

21 Nov 2012

With News Corp snapping up a piece of the Yankees TV network, Bob Iger’s battle with Rupert Murdoch is becoming more intense. But News Corp’s rich price for the deal implies a punchy valuation for Disney’s much-coveted ESPN. That could make the whole Magic Kingdom worth more.

Ethical economy: Candidates as consumer products

21 Nov 2012

Supermarket-style data mining was one key to Obama’s victory. The skill is undeniable, but governance is hurt by this manipulative approach to opinion-forming and opinion-following. Scientific electioneering only worsens the problems caused by money and “magical thinking”.

HP’s Autonomess should devour Marc Andreessen, too

20 Nov 2012

The Silicon Valley visionary behind Netscape goaded Leo Apotheker, the CEO he recruited to HP, to bet big on Autonomy as part of his “software eating the world” thesis. Andreessen was also integral to the value-destructive Palm deal. HP’s board would be better off without him.

Enforcers keep on casting for biggest SAC fish

20 Nov 2012

The feds hit Mathew Martoma, an ex-trader at Steve Cohen’s hedge fund firm, with criminal and civil insider trading complaints. They say he directly urged his boss to trade, helping make $276 mln. But if they hope Martoma can assist them in landing Cohen, they’ll need to deal.

JPMorgan CFO rejig leaves only Dimon unpunished

20 Nov 2012

Promoting Marianne Lake ticks several boxes. It sidelines another top dog, Doug Braunstein, who failed to spot the London CIO mess; adds another woman to the c-suite; and restores the CFO’s place in the hierarchy. Clawing back some of Dimon’s pay would at last harpoon the whale.

Baseball is due to face a financial curveball

20 Nov 2012

Rupert Murdoch is buying into the New York Yankees cable network at a Ruthian EBITDA multiple. Player salaries and ticket prices have surged at triple the rate of inflation over 20 years while franchise values are at 42 times operating income. These diamonds aren’t forever.

Deloitte tests whether TBTF applies to accounting

20 Nov 2012

If what HP says is true, Autonomy’s auditor will be in a tight spot. Deloitte keeps popping up in scandals despite a public shaming by its regulator. It’s becoming increasingly clear that the Big Four structure is leaving companies too vulnerable. It may be time to break them up.

HP’s $8.8 bln Autonomy trouble sown by dysfunction

20 Nov 2012

Sure, the granddaddy of Silicon Valley blames accounting improprieties at the UK software company it bought for nearly $12 bln last year. But HP, facing declining businesses and boardroom disarray, was too eager. CEO Meg Whitman’s already tough job just got even harder.

HP-Autonomy row suggests bankers did not compute

20 Nov 2012

There’s plenty of blame to go around in the explosive bust-up between the U.S. tech giant and the British data-sifter. But it raises tough questions for the M&A advisers who shepherded the $12 bln deal, chiefly Frank Quattrone’s Qatalyst, Barclays and Perella Weinberg.

Fiat Industrial unearths more value in CNH tie-up

20 Nov 2012

The Italian tractor maker’s no-premium merger bid for 88 pct-owned unit CNH was rightly rebuffed by a committee of the U.S. company’s board. FI is back with a 26 pct cash bump. The bidder’s not above some arm-twisting too. But this looks more like a fair squeeze-out premium.

Short-seller raises stakes with Singaporean attack

20 Nov 2012

Shares in Olam have been suspended after Muddy Waters founder Carson Block questioned its accounts. His record of exposing Chinese frauds will make investors take notice. But the commodity trader, and largest shareholder Temasek, are bigger game. Both sides have much to lose.

Amazon of China defies down-round blues after all

20 Nov 2012

The valuation of online shopping site 360buy swelled by 15 pct to $7.6 bln in a year, despite widening losses. VCs continue to pour money into China’s crowded e-commerce space. But as players increasingly compete for market share by discounting, profits look ever more elusive.

If Apple becomes Microsoft, investors should cheer

19 Nov 2012

At least, that is, for their wallets. Middle age for tech stocks can hurt as growth shareholders lose interest and value-oriented owners await stability. But Apple has already made the transition. Even if its next decade echoes Microsoft’s last, the company is worth over $1 trln.

Colombia’s land reform talks have handy template

19 Nov 2012

Land is the first order of business for the government and FARC rebels. Getting past ideas of communal ownership and agreeing on restitution or redistribution is crucial. As Hernando de Soto showed in neighboring Peru, solid property titles can be useful fuel for economic growth.

Intel’s next chief can’t be chip off old block

19 Nov 2012

The semiconductor giant’s shine has dulled with the rise of mobile. Being surpassed in market value by Qualcomm illustrates the shift. Retiring CEO Paul Otellini’s replacement will have to tackle smartphones, but time is wasting. Intel also needs to play tougher defense.

Soft power is priceless – and scarce

19 Nov 2012

When the term was coined in 1990, the U.S. way of life still had broad appeal. But America is now equally distrusted and emulated. No nation has filled the soft power gap. Japan and the UK are powerless despite a new study that says otherwise, and China offers only soft weakness.

Colombia brokerage fail more MF Global than Lehman

19 Nov 2012

Interbolsa’s collapse evokes elements of both Wall Street firms. But the demise of Colombia’s largest brokerage is merely painful like MF Global’s, not systemic like Lehman’s. At least Colombia’s regulators have an excuse: they’re toothless until a firm fails. That has to change.