United States of America

Jilted Air Products gets only a consolation prize

19 Jun 2012

Since the U.S. hydrogen producer’s hostile bid for Airgas failed last year, it has lagged rivals. Its former prey’s dramatic outperformance exposes the $5.8 bln offer as too stingy. A smaller deal in Chile may help Air Products revive growth but is a poor Airgas substitute.

KKR gets rich prescription for top-of-market LBO

19 Jun 2012

Walgreen’s two-stage acquisition of European rival Alliance Boots should more than double the investment KKR and its partners made at the height of the 2007 boom. What the U.S. drug chain’s investors will get for their money - as much as $16.2 bln - is harder to fathom.

Lazard’s new investor isn’t passive by nature

19 Jun 2012

Nelson Peltz says his 5.1 pct stake in the Wall Street advisory shop is a bet on the current plan and management. It’s a coup to win over the uppity activist – Peltz was behind campaigns at Heinz and State Street. But CEO Ken Jacobs also probably doesn’t have much room for error.

Jefferies’ so-so Q2 may be best of a poor bunch

19 Jun 2012

Trading revenue fell less than feared while sales of new debt and stock actually increased. Yet Jefferies, which includes a buoyant March in its earnings, still only managed to eke out a 7 pct return on equity. Larger rivals reporting next month may struggle to match even that.

Microsoft tablet suffers from lack of greatness

19 Jun 2012

The software giant’s latest foray into consumer gadgets looks better than earlier attempts - remember Zune? That’s good, as a growth of mobile devices leaves it no choice but to compete with Apple and Android. But while its tablets show some promise, that’s probably not enough.

NYC plan needs Financier Bloomberg not Mayor Mike

18 Jun 2012

Privatizing 90,000 parking spaces could raise billions to head off looming budget deficits. But as Chicago showed, such deals can sacrifice long-term revenue for short-term relief. Political expediency should take a backseat in the Big Apple. A joint venture would work better.

Rajat Gupta goes down but insider trading may not

15 Jun 2012

Guilty verdicts against the former McKinsey boss and P&G director should scare the bejeezus out of corporate America and Wall Street. But until the rules on passing tips are more clearly defined and miscreants truly fear being caught, the case’s deterrence value will be limited.

Letter to the Editor: R.I.P. too-big-to-fail

15 Jun 2012

Wilson Ervin, senior adviser to the CEO of Credit Suisse, takes issue with a pervasive belief that systemically important U.S. financial institutions can’t collapse. Responding to a recent Breakingviews article, he says there’s now a credible, workable way to wind them down.

Looming US debt clash a safety check for investors

15 Jun 2012

Washington looks set to repeat last year’s battle over the nation’s borrowing limit. That was almost a debacle. But the messy spectacle serves to put reducing deficits in the spotlight, forcing Congress to ensure that borrowing remains manageable. That should be welcomed.

Review: Groupon’s baby CEO grows up – to a point

15 Jun 2012

The daily deals website was the fastest company to achieve $1 bln in sales. Frank Sennett’s new book, “Groupon’s Biggest Deal Ever,” gives a blow-by-blow account of the startup’s rapid ascent. But investors looking for clues to Groupon’s sustainability may be disappointed.

Value and diversity protect in tricky markets

15 Jun 2012

No matter their views of the future, good investors prepare for whatever it may bring. That’s tough as another phase of the Europe-centred crisis unfolds. But there are a few spots where basic valuation measures look off, even in an uncertain world, and so present opportunities.

Dewey backlash presents law firm ethos Exhibit A

14 Jun 2012

A former partner is alleging the once-proud legal shop deceived him about its finances. New York prosecutors are considering similar charges. It’s looking as if the legal community’s quest for lessons from the firm’s bankruptcy can start with a simple reflection on Lady Justice.

Middle-class American dream needs less real estate

14 Jun 2012

U.S. families in the middle income bracket lost 29 pct of their net worth between 2007 and 2010. The plunge in home values was largely to blame. Yet the rich got richer, with tax deductions of various kinds making it cheaper for them to save. Policy can help redress the balance.

Too big to fail anxiety fuels Jamie Dimon circus

13 Jun 2012

One thing binds the politicians, pundits, protesters and investors outraged by the $2 bln loss of a well-capitalized, profitable private company. Nobody believes taxpayers are really off the hook for Wall Street’s failures. The real casualty of the debate is the Dodd-Frank Act.

Man Utd’s IPO transfer keeps owners in control

13 Jun 2012

The English soccer club may switch a $1 bln listing from Singapore to New York. So much for brand-building in Asia. Despite public indifference, U.S. investors will see value in a strong global franchise. And the owners can bring over the lopsided governance in the original plan.

Jamie Dimon should come out swinging in Senate

12 Jun 2012

JPMorgan’s dumb trades exposed its risk management as fallible. But it’s an issue primarily for shareholders, not politicians. The notion that rules and watchdogs should prevent banks from losing money engenders the false sense of security that girds too-big-to-fail thinking.

Warren Buffett embraces the 100 pct strategy

12 Jun 2012

Berkshire Hathaway’s bid for bankrupt ResCap is a bet of sorts on a rebound for U.S. housing and the ailing 99 pct. Buffett is also long the 1 pct, spending $10 bln on luxury jets. And the record bid for his charity auction lunch is a fresh sign he can bridge the two groups.

Watchdogs need to demystify shadow bank definition

12 Jun 2012

A U.S. Supreme Court judge said of pornography that he knew it when he saw it. Sadly it’s a bit the same with global regulators and the world of so-called shadow banking. They’ll have to describe it better to control a multi-trillion dollar area of finance that poses real risks.

Apple and Facebook become frenemies versus Google

12 Jun 2012

The iPhone maker hasn’t figured out social networks. Remember Ping? Facebook fears losing control to makers of operating systems of mobile gadgets. Making Facebook work smoothly on Apple devices can boost revenue for both - and allow them to thwart their mutual enemy Google.

JPMorgan should consider whale of a bonus

11 Jun 2012

Not in terms of size, but linked to the losses by the London trader with the marine mammal moniker. Payouts using derivatives tied to the disastrous hedges would force JPMorgan bosses to eat their own cooking. It won’t repair the damage, but would deliver some justice.