United States of America

Liberty pushes envelope for post-crisis M&A debt

6 Feb 2013

The U.S. media group is funding the cash element of its $23 bln Virgin offer by gearing up its target. Almost $8 bln of new debt will be issued with the deal. Overall leverage may still be below pre-crisis multiples. But it’s a big moment - and could beget more levered M&A.

RBS moves away from Libor danger zone

6 Feb 2013

The UK bank has avoided a franchise-destroying U.S criminal liability. The 390 mln stg fine - more than Barclays, much less than UBS - should be bearable. But the UK government still has many other problems to deal with before it can sell its 81 pct stake.

Hack attacks may be West’s cue to try harder

6 Feb 2013

China’s alleged attacks on U.S. companies are a new twist on an old theme: outsiders wanting in. China sees itself as the ultimate underdog, so the urge to snoop should fall as it matures. Meanwhile, fears of hacking may spur useful new initiatives in potential targets.

Murdoch and Malone make better allies than rivals

5 Feb 2013

The media moguls are squaring off again. John Malone’s Liberty Global wants to buy Britain’s Virgin Media - a rival to the Rupert Murdoch-backed BSkyB. But the two UK companies complement each other. Collaboration would work in their favour, leaving third player BT as the loser.

Ally so close to paying back Uncle Sam, yet so far

5 Feb 2013

CEO Mike Carpenter threatened to pick up his ball and go home in a spat with creditors of ResCap, its bankrupt mortgage unit. But Ally is better off playing nice. The auto lender may be profitable again, but investors won’t go near Ally until its mortgage exposure is resolved.

Warning: it’s not just the hacks being hacked

5 Feb 2013

The New York Times and other media outlets may think network intrusions from China are payback for probing the Beijing regime. But PRC news paranoia is only a small part of a big story. Other Western companies should read between the lines, and beef up inadequate cyber-defenses.

DoJ deals $4 bln-plus downgrade to S&P, Moody’s

5 Feb 2013

The rating firms’ successful legal defenses to date and a booming debt market may have persuaded shareholders that good times were back. But a U.S. government suit against S&P, though a long shot, is a sharp reminder that subprime sins haven’t been forgiven or forgotten.

Dell’s $24 bln LBO involves a club of one

5 Feb 2013

And Silver Lake, the sole private equity firm included, isn’t even really the club. Michael Dell is contributing his 14 pct stake in the PC maker, cash and an investment from his MSD Capital. Time was mega-deals needed a team of buyers. For now, they remain more exclusive.

Liberty’s tilt at Virgin shows cautious deal fever

5 Feb 2013

The U.S. cable group’s renewed interest in UK-based peer Virgin Media comes as Dell nears a jumbo buyout. The structure of any Virgin deal is unclear. But there’s logic in using debt to fund a $20 bln bid for a stable UK cable firm, whether by Liberty or private equity.

Apple and Exxon may not be so different, after all

4 Feb 2013

The tech and oil giants share more than nearly identical U.S. market-leading values of about $400 bln. Both are threatened by shrinking margins and a struggle to replace their precious wares. Exxon has survived four times longer than Apple, but appears to be just as vulnerable.

Unlocking salary secrets could pay extra bonuses

4 Feb 2013

A new proposal in the U.S. Congress would allow employees to reveal their compensation freely. Though the aim is to curb gender discrimination, the effects are likely to be much more far-reaching. Such information should improve labor market efficiency and reduce inequality.

Equity split from commodities may be short lived

4 Feb 2013

Japan’s money-printing rivalry with the U.S. has swept stocks to multi-year highs while commodities lag on worries about slow global growth. The outlook is fundamentally good for both these asset classes, though, as long as central-bank cash keeps flowing into the system.

U.S. venture capital needs a reboot

4 Feb 2013

A decade of insufficient shrinkage hasn’t fixed wimpy performance, which undershoots boring stock indexes. The dot-com boom is history, startups find capital elsewhere, and funds chase assets over returns. A few big names aside, investors need to strip VCs of their mystique.

Steady U.S. job gains put pre-crisis peak in reach

1 Feb 2013

Creating the 3 mln or so positions needed to get back to the nearly 138 mln from 2008 no longer seems as daunting. The latest data indicate it could happen by mid-2014. Closing the yawning gap is an important milestone. Achieving “normal” will be the next big summit to scale.

2012 may be as good as it gets for Exxon

1 Feb 2013

The oil giant pumped out a near-record profit and its best earnings per share ever. But Exxon, like Chevron, is spending huge sums – almost $40 bln last year - to find and extract reserves. Holding output steady is tough enough. Unless oil prices jump, Exxon may have peaked.

Markets made Ed Koch fiscally successful NYC mayor

1 Feb 2013

Koch was a great showman who helped to reverse the U.S. financial center’s decades of decay. Hizzoner, who died Friday, will go down as a budget balancer who managed to boost headcount. He got lucky: late 1970s inflation cut debt costs and the 1980s finance boom grew receipts.

AB InBev setback may hasten last round of beer M&A

1 Feb 2013

U.S. government opposition to AB InBev’s $20 bln buyout of Grupo Modelo may speed up a last bout of sector consolidation. The world’s biggest brewer may yet find a workable compromise with trustbusters. But an obvious plan B is pouncing on emerging-markets focused SABMiller.

New U.S. trustbuster sprays cold brew on AB InBev

31 Jan 2013

William Baer, the DoJ’s antitrust chief, sued to stop the giant brewer’s $20 bln purchase of 50 pct of Modelo. AB InBev had tried to allay competition fears with the deal’s structure. Baer’s surprise move suggests a thirst for tough enforcement - or at least a tough reputation.

U.S. immigration plan slows brain drain at a price

31 Jan 2013

Congress is edging toward letting illegal immigrants stay, while promising greater vigilance. High-tech companies will like measures to retain more foreign-born graduates, while small firms may struggle with new red tape. Fixes are needed, but economically these are a mixed bag.

Ice cream and vodka could endorse the Oaktree way

31 Jan 2013

The U.S. group has helped pioneer a mixture of private-equity and distressed-debt investing in Europe. Hard cash returns aren’t yet huge but now Oaktree may sell big ice cream and spirits companies, and float an estate agency. That would help affirm the hybrid approach.