United States of America

Bankrupt Hawker may not be so easily hawked

10 Jul 2012

A Chinese bidder for the jet maker is offering a heroic price, and could save thousands of U.S. jobs. But Chinese state backing could be a sticking point. All hinges not just on the foreign investment regulator, but whether a bankruptcy court thinks the deal can fly politically.

Mitt Romney’s healthcare obsession is unhealthy

9 Jul 2012

The Republican presidential hopeful is hell-bent on repealing Obama’s Affordable Care Act. Making it a “day one” initiative, should he win, could undermine action on pressing economic issues, like unemployment. Such a move also would set a bad tone for dealing with Democrats.

Supreme Court gives shot in arm to Obamacare M&A

9 Jul 2012

Expanding health coverage to 32 mln Americans remains politically contentious. But it’s here to stay and a lucrative opportunity for insurers that helps justify juicy merger premiums. That’s the logic behind WellPoint’s pricey $4.5 bln bet on Amerigroup. More deals are likely.

Congress’ all-star hedgie panel proves own point

9 Jul 2012

Legislators in 2008 hauled in top fund managers to testify on their roles in the meltdown. Today, Falcone is being chased by the SEC, Paulson is bleeding and Griffin only recently clawed back his losses. Such mixed fortunes, without systemic consequences, underline their case.

Jobs data show US gets some austerity, by default

6 Jul 2012

For a fourth month running, the growth in new jobs came from the private sector. Government layoffs, meanwhile, have been a solid feature since the Feb. 2010 trough, which followed a big boom. Wait until Uncle Sam actually, and inevitably, is forced to tighten the fiscal belt.

Duke CEO sucker punch a value lesson for investors

6 Jul 2012

Electricity firm Progress demanded, and got, the top job when it agreed to sell to its larger rival. In return the firm accepted a tiny premium. That Bill Johnson lasted only hours in the post is a reminder to shareholders not to sacrifice value for the prestige of leadership.

Review: Financial whodunit clues into bankers

6 Jul 2012

Imagine Goldman had merged with Lehman, stuffed it with surprise amounts of dreck as Merrill did to BofA and then Dick Fuld confessed to killing Lloyd Blankfein. A story like that underpins journalist John Gapper’s debut novel. The mystery is fun but also not entirely frivolous.

Libor adds another worry for U.S. mega-bank owners

5 Jul 2012

So far only Barclays has been accused of wrongdoing in the unfolding scandal. But shareholders now must add an arcane interest rate to an already long list of risks. That’s going to make it more difficult for JPMorgan, Citigroup and BofA to trade above book value any time soon.

Falling gas prices might just fuel Obama this fall

5 Jul 2012

The U.S. president’s re-election hopes might not be doomed by his nation’s recent economic hiccups. Like last summer, consumers had sticker shock at the pump this spring. But gas peaked earlier this year and fell further. That could restore growth - and Obama’s chances.

Coty’s IPO should give it a leg up on Avon

5 Jul 2012

The spurned Avon suitor has turned its affections to the public market where it hopes to sell $700 million of stock. Coty ought to fetch a pretty premium thanks to revenue growth and a proven management team. That would enable a second run at the lagging cosmetics group.

New mortgage seizure plan is the nuttiest idea yet

5 Jul 2012

A California county wants to use eminent domain rules to forcibly take underwater mortgages from investors. If it catches on, it will cost bondholders, and potentially taxpayers, billions. That’ll whack up mortgage costs and may leave the U.S government as the only lender.

Private equity earns slick return from oil data

4 Jul 2012

The global race for natural resources has yielded a rich seam of profits for Wood Mackenzie, a PE-backed specialist in energy data. Owner Charterhouse will recoup three times its money through a $1.7 bln sale. Paying a full price in 2009 was bold, but the risk has been rewarded.

Will Microsoft learn through self-flagellation?

3 Jul 2012

The software giant squandered shareholder treasure for years to break into internet services, gaming and consumer electronics. Writing down the $6 bln it blew on aQuantive should mark a turning point where Microsoft at long last returns to its knitting and focuses on enterprise.

Best hacking defense isn’t really a good offense

3 Jul 2012

Computer break-ins have cost Citi, Sony and others millions of dollars in stolen data. Retaliation is tempting, but risky and probably illegal. Instead, law enforcers need sharper tactics like the FBI’s recent hacker sting. Otherwise, victims can’t be blamed for hacking back.

Chinese IP awareness, sown by West, bruises Apple

3 Jul 2012

The gadget maker can easily afford the $60 mln it’s paying for the iPad name in China. And a lawsuit over Snow Leopard poses little threat. Still, the Middle Kingdom is increasingly alert to trademarks, patents and so on. Western multinationals wanted that, but it cuts both ways.

Indispensability of Chesapeake CEO is exaggerated

2 Jul 2012

Embattled CEO Aubrey McClendon owes his survival largely to a myth of unsackability. Despite numerous abuses, supporters contend his talent makes him indispensable to the energy group. This puts too high a value on the CEO and too little on Chesapeake’s vast asset portfolio.

How does a $670 mln deal spark a $400 bln battle?

2 Jul 2012

When Brazil’s largest credit card processor goes on the hunt. Cielo is buying U.S. e-commerce shop Merchant e-Solutions hoping to defend its lead in a highly competitive market. With industry profits expected to fall, Cielo, Redecard and others are all fighting for an edge.

Bristol-Myers and Astra make fat bet on obesity

2 Jul 2012

The U.S. and UK drug giants are teaming up in the $7 bln purchase of Amylin. Seven times estimated sales is a hefty price for a biotech whose main drugs face stiff potential competition. But Amylin’s focus on diabetes, a sadly expanding market, makes this a healthier endeavor.

Upstart EverBank zigs while GE Capital zags

2 Jul 2012

The industrial giant is shedding financial assets and trying to reduce dependence on wholesale funding. The newly public EverBank is taking the opposite tack, spending almost double its $1.3 bln market cap on GE’s Business Property unit, leaving it with more loans than deposits.

Gas giant Linde expands to fill healthy space

2 Jul 2012

The German company will pay $4.6 billion including debt for Lincare, a specialist in respiratory gases. That is a full-looking 9.3 times EBITDA and synergies will be limited. But Linde boosts its U.S. footprint - and secures a route to growth outside its consolidated core market.