Sweden

Second-hand $4 bln colostomy bag LBO may get messy

26 Mar 2019

Medical-kit maker ConvaTec’s value rose 9 pct after a report that buyout group EQT might be interested. Its shares are down a third since it was floated by private equity in 2016. A new owner could slash costs to rip out cash, but risks sacrificing more market share to rivals.

Spotify pitches Apple lament to easy EU audience

14 Mar 2019

The Swedish music service filed a European Commission complaint alleging that its rival’s payments system hurts competition. It may take years, but the EU has pursued similar cases against the likes of Google. It’s also well timed given the growing backlash against U.S. Big Tech.

EU banks keep stepping on old landmines

20 Feb 2019

A French court fined UBS a record $5.1 bln for helping clients evade taxes in the past, while Swedbank faces allegations about old dodgy transactions linked to Danske Bank’s money-laundering scandal. European lenders seem unable to avoid the damage from past compliance bungles.

Cevian, Nordea dangle truce in bank activism feud

21 Dec 2018

Lenders and shareholder activists rarely gel. But the Nordic bank welcomed the Swedish fund’s 2.3 pct stake. Cevian’s proposals for cost cuts are less radical than, say, a breakup, but could push Nordea’s return on equity to 14 pct. Its surplus capital could be a sweetener.

Ethical investing is cherry on private equity cake

18 Dec 2018

Bridgepoint is bidding $1 billion for Swedish gaming firm Cherry. The buyout group’s scope to pay a big premium and still get a good deal is due to public markets’ aversion to “sin stocks”. Ethical investing is supposed to improve behaviour, not private equity coffers.

Sweden’s SEB chooses relevance over higher returns

13 Dec 2018

The country’s second-biggest bank by assets said costs will increase 1 bln crowns by 2021 to cover digital investment, hitting profit. Yet unlike many stodgy European lenders battling online rivals, SEB is in a better position to defend the bottom line.

CVC’s $3 bln Nordic LBO do-over needs new tricks

11 Dec 2018

The buyout firm is taking control of Ahlsell again, two years after selling out of the Swedish distributor. Its recent ownership suggests there won’t be much scope to cut more costs. To get a decent return this time, CVC will have to pile on debt and hope for revenue to pick up.

Ericsson debacle exposes costs of anti-Huawei push

7 Dec 2018

The Swedish group’s glitchy software crashed some telecom networks. Yet it may grab market share, with its rival’s CFO under arrest and governments backing away from the Chinese company’s kit. A more concentrated market would mean higher prices and a risk of further big outages.

ABB belatedly succumbs to industrial revolution

19 Oct 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

H&M gets too much credit for a patchy new look

27 Sep 2018

A glitchy supply chain sent the 23 billion euro fast-fashion retailer’s pre-tax profit down a fifth in the third quarter. Strong online demand was a rare bright spot. Investors who bid up the stock 10 percent ignore high levels of unsold stock and sales growth well below targets.

Spotify value is out of tune with musical reality

13 Sep 2018

The $33 bln streaming service is growing quickly and inching towards profitability. Yet investors are already giving the group credit for its ambitious targets. Powerful labels like Universal have every reason to make life difficult for boss Daniel Ek.

Volvo’s IPO problems go beyond brewing trade war

10 Sep 2018

The carmaker’s Chinese owner has paused a float worth up to $30 bln. Even without America’s tariff antics, that price tag would have been far too high. Investors are unconvinced old-school auto groups will get a return for their spending on electric and autonomous cars.

Sweden election shows it’s not the economy, stupid

7 Sep 2018

The Nordic nation is growing faster than the EU as a whole, has a higher employment rate, a budget surplus, and scores well on income equality. Yet the far-right Sweden Democrats may do well in Sunday’s vote. A good life offers limited immunity against immigration fears.

Nordea’s bumper payout can weather top-line squall

19 Jul 2018

Scaling back lending to shipping and Russia dragged down the Nordic bank’s revenue and knocked 9 percent off its underlying pre-tax profit in the first half. However, a comfortable capital ratio of 19.9 percent should ensure the lender’s 8 percent dividend yield is safe.

Nordic telecom mash-up gives might to challenger

17 Jul 2018

Sweden’s Telia is beefing up its Norwegian operations by buying rival TDC’s local business for $2.6 bln. That gives it a sturdier platform to challenge incumbent Telenor. Cost savings should help deliver a decent return – as long as it avoids price wars or a regulatory clampdown.

Micro Focus $2.5 bln sale amplifies growth problem

2 Jul 2018

The British tech group’s disposal of an open-source software unit is helping its share price, which halved in March. Yet the source of its problems, a troubled former HP division, now accounts for more of the group’s revenue. A tricky turnaround has become even harder to execute.

Morrisons can pilfer from larger rivals’ trolley

7 Jun 2018

The merger of J Sainsbury and Walmart-owned Asda leaves the UK grocer in a distant third place. Boss David Potts could counterbid, but drumming up similar synergies looks tough. Better to lobby against the deal, and grab market share and the best shop locations if it goes ahead.

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.

Volvo IPO will open road for M&A

11 May 2018

The Swedish group’s Chinese owner Geely may list the business it bought in 2010, profiting from a turnaround. That would raise cash for research and development and facilitate dealmaking. But a mooted valuation of up to $30 billion hinges on unrealistic Tesla-style multiples.

Spotify price hikes are dubious profitability plan

27 Apr 2018

The loss-making music service will soon charge Norwegians 10 pct more to listen to its vast song library. That will test if users value it enough to pay a premium over rival Apple. Spotify’s thin margins mean little benefit to investors even from a similar worldwide hike.