Consumer Products and Services

Sickly IPO may infect Hong Kong waiting room

8 May 2018

The group behind medical app Good Doctor fell below its float price on the second day of trading. The diagnosis is simple: this was overpriced, like other recent deals. With giants such as Xiaomi set to list, bankers may want to leave more on the table to keep the market healthy.

Nature’s $5 bln IPO has good chance of flourishing

3 May 2018

The German science publisher is selling shares in a Frankfurt listing. A heavy debt load and a narrow focus on academic publishing are drawbacks. But Springer Nature is more cheaply valued than peers like RELX and will benefit if open-access science journals grow more dominant.

UK tabloids’ dire top line strengthens M&A case

3 May 2018

Sales are down 9 pct this year at Trinity Mirror, whose acquisition of Express newspapers is under the regulatory microscope. Buying rivals and slashing costs seems the only viable option for the Daily Mirror parent. Blocking the deal would leave the media sector on the sickbed.

Japanese odds may be growing longer for casinos

3 May 2018

MGM and Melco are among those keen to bet on the new market, estimated at $25 bln. They got lucky with Prime Minister Shinzo Abe, who helped advance plans in the face of opposition. His political woes, though, could deal the efforts some public backlash and crippling regulation.

Sainsbury’s shows need for new antitrust approach

2 May 2018

The grocer, which is buying Asda for 7.3 bln pounds, wants UK competition authorities to vet retail mergers in a new way. The rise of discount rivals and online sales means it has a point. A revamp of the metrics used to make sure shoppers have enough choice looks inevitable.

Power Rangers alone won’t win toy war for Hasbro

1 May 2018

The $11 bln Play-Doh parent is buying the superhero franchise from Haim Saban for $522 mln. Disney’s reboot of older brands like Marvel inspires copycats. But tangible toymakers have little edge over digital ones. Hasbro’s best hopes still reside in taking over $5 bln Mattel.

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.

Steinhoff payout may test South Africa reform zeal

27 Apr 2018

Hedge funds piled into 1.6 bln euros of the failed retailer’s bonds betting that its healthy South African unit will honour them. The fallout from Steinhoff’s collapse may make a payout politically tricky, and challenge new President Cyril Ramaphosa’s market-friendly credentials.

Electrolux buffeted by perfect Trump tariff storm

27 Apr 2018

The Swedish fridge maker lost a tenth of its value after operating profit almost halved in the first quarter. A rejig of its freezer factories in the U.S. was one culprit. But investors are dubious that cost cuts will enable such a global business to offset higher steel prices.

Amazon is getting bigger, but also heavier

26 Apr 2018

Jeff Bezos’s firm made $51 bln in quarterly revenue. Sales have more than doubled in five years, but it’s taking more fixed assets to get there. Amazon now uses property and such with less efficiency than Walmart – just as its more traditional rival tries to go the other way.

VW’s new boss has $184 bln of low-hanging fruit

26 Apr 2018

CEO Herbert Diess kick-started an overhaul of the carmaker. Cutting jobs will be hard given VW’s union-heavy board. But by slashing the group’s excessive spending on materials like steel, Diess could squeeze suppliers instead. That would make a big difference to its thin margins.

U.S. squeeze could rally China tech behind Beijing

26 Apr 2018

Like rival ZTE, Chinese telecoms equipment giant Huawei could also be in trouble over sanctions. The duo’s woes show how vital U.S. parts are to global supply chains. Beijing, which has long dreamt of self-sufficiency in technology, could enlist help from the likes of Alibaba.

Whitbread’s coffee spinoff is too slow

25 Apr 2018

The UK company is planning to hive off its Costa cafes less than two weeks after activist Elliott disclosed a 6 percent stake. That may lift the group’s undervalued shares and make the chain a bid target. But a 24-month timeline is too long for investors to wait for the takeaway.

Indian telecom tower M&A leaves room for more

25 Apr 2018

A union of Bharti Infratel and Indus Towers creates a $15 bln company with more masts than heavyweight rival American Tower. This paves the way for indebted telecoms backers, including Vodafone, to take out a special dividend or sell part of the merged group to a buyout firm.

Bookie investors misjudge odds in political casino

24 Apr 2018

William Hill, Paddy Power Betfair and GVC collectively lost 1 bln stg in value on reports Britain may cap betting-machine stakes and hike levies. That’s worse than feared, but not unimaginable given low UK gambling taxes. Smarter investors would have seen the writing on the wall.

Peugeot investors jump the gun on Opel turnaround

24 Apr 2018

The French carmaker’s shares trade at a premium to European peers despite its below-average operating margin. Investors are already counting on a turnaround at Opel, the loss-making business bought from GM last year. A German labour dispute means there’s room for disappointment.

Didi floors its way to a public listing

24 Apr 2018

The Chinese ride-hailing outfit may be steering toward an $80 bln IPO this year as Uber finds its way. Didi also is moving into Mexico, adding food delivery and exploring custom cars with the likes of Renault. It could be a bid to race to opening Hong Kong and Shanghai markets.

Takeda pushes its globetrotting ambitions too far

23 Apr 2018

The Japanese drugmaker led by a French CEO added cash to a slightly sweeter $60 bln bid for Irish rival Shire. Takeda's target is cheap, but the big premium will be hard to justify. The deal also would flood the market with shares and ratchet up debt. It's all a big stretch.

Bolloréxit sums up Vivendi’s sub-par governance

19 Apr 2018

Vincent Bolloré stunned investors by abruptly handing the French media group’s chairmanship to his son. The 66-year-old Vivendi shareholder may well linger, muddying accountability for group strategy. Corporate governance issues are familiar, but this is still an eye-opener.

P&G drug deal needs vitamin shot to persuade Peltz

19 Apr 2018

The U.S. consumer giant is paying 3.4 bln euros for the consumer arm of Germany’s Merck. For it to make sense P&G will have to crank up sales of Seven Seas vitamins while cutting out costs. Board member Nelson Peltz’s criticism of past acquisitions further raises the stakes.