Corporate Governance

China’s wannabe fashion empire unravels

3 Apr 2020

Two years after agreeing to buy Swiss luxury brand Bally from JAB for $600 mln, Shandong Ruyi has failed to nail down financing. Its large and complex debt structure looks increasingly shaky. Even an HNA-like fire sale for the Lycra and SMCP owner will be tough in these times.

Japanese investors stick to curious old ways

30 Mar 2020

Despite signs of displeasure with Kirin’s strategy, shareholders rejected proposals to change it. Toshiba Machine’s approved anti-takeover measures while Teikoku Sen-i’s spurned higher payouts. There are glimmers of progress in the votes, but they are self-defeating all the same.

Mitsubishi is too mild a mediator for Nissan

27 Mar 2020

Mitsubishi Corp, second-largest shareholder in the eponymous carmaker, is mulling a 10% stake in Renault, Reuters reports. It’s a small step, but could signal an overdue adjustment within the troubled troika. The French group will have to give more to get Nissan on board.

Singapore Airlines secures business-class bailout

27 Mar 2020

State investor Temasek is supporting a whopping $13 bln funding package. Deeply discounted equity and a zero-coupon convertible bond provide other shareholders a chance to bet on a post-crisis recovery. The hard-to-copy playbook could even give the carrier a longer-term edge.

Crisis gives activism new drive in Lagardère spat

26 Mar 2020

Amber Capital is pressing ahead with its campaign to oust the French company’s supervisory board. Long-term share underperformance and messy governance provide the justification. With Covid-19 giving companies an excuse to shelve reforms, constructive criticism is still needed.

Korean Air drama risks ending in corporate tragedy

25 Mar 2020

Feuding siblings, white knight Delta Air Lines, and a pushy activist are all battling over the country’s top carrier. Change is overdue, but debt worth 862% of equity has left Korean Air more vulnerable than peers to a pandemic. Any victory from the proxy battle will be pyrrhic.

Masayoshi Son’s bold streak works in reverse too

23 Mar 2020

The acquisitive SoftBank boss plans to sell up to $41 bln of assets to retire debt and buy back the company’s deeply discounted shares. Balance sheet concerns had reached fever pitch. There are good reasons to worry, but Son is showing he has big levers and is ready to pull them.

Hong Kong is ripe for more tycoon-led buyouts

23 Mar 2020

The Fung clan wants to take Li & Fung private. Online retail, the trade war and Covid-19 have battered the supply-chain group, making a $1.4 bln valuation look generous. As such opportunistic deals gather pace, investors in the Asian hub may start to demand more of buyers.

Tortuous Japanese hotel deal takes viral twist

20 Mar 2020

Unizo is backing a sweetened $1.9 bln bid from Lone Star that matches Blackstone’s price. Top owner Elliott is ready to accept, eight months into the bidding war. Fresh Covid-19 volatility may accelerate an endgame, but also calls into question the frontrunner’s takeover plan.

JD certifies that old buyback habits die hard

18 Mar 2020

The Chinese e-commerce giant unveiled a $2 bln share repurchase plan amid a global crash. A possible second listing in Hong Kong may explain it, and JD is at least using cash on hand. Corporate obsession with such financial engineering probably will be pandemic-proof.

Fed will struggle to open discount window wide

16 Mar 2020

The eight biggest U.S. lenders are tapping the central bank’s emergency facility to help reduce its stigma. Ones that used the program during the financial crisis were publicly shamed. The likes of JPMorgan are setting a good example, but may not persuade smaller peers to follow.

CEOs finally have a licence to cite “uncertainty”

17 Mar 2020

Despite being paid to deal with doubt, bosses abuse the term as an excuse for poor performance or to criticise disliked policy. Covid-19 is the real deal, though, making it truly hard to read supply, demand and government action. It’ll be a 2020 buzzword alongside “coronavirus”.

Carlyle’s SBI Cards IPO is priced to perfection

16 Mar 2020

Shares of State Bank of India’s credit card unit fell slightly on their debut. In choppy markets, it’s a decent result for the U.S. buyout group pocketing most of the $1.4 bln in proceeds. As virus fears curb Indian spending though, the rich valuation suddenly feels over the top.

Yes Bank draws down Team India’s power

16 Mar 2020

Private institutions from HDFC to ICICI are joining a $1.4 bln state-led rescue of the troubled lender. There is self-interest in collectively trying to help restore systemic confidence. With more bad debt bound to turn up, though, it is also an early drain on limited resources.

SoftBank’s buyback is opportunistic and frivolous

13 Mar 2020

The Japanese group is partly bowing to pushy hedge fund Elliott by repurchasing $5 bln of its own stock. In a plunging market, though, Masayoshi Son’s company may struggle to sell assets at decent prices to fund the move. And taking on more debt will do little to boost its value.

Holding: Governance brawl a boon for stakeholders

10 Mar 2020

Attorney Martin Lipton and Harvard’s Lucian Bebchuk are at it again, with the latter saying company pledges to serve the greater good are illusory. Lipton counters that firms really are moving past shareholder primacy. At least the debate could benefit all corporate constituents.

Xerox drawn into duplicative Japanese fight

10 Mar 2020

After pushy investor Carl Icahn showed up, the U.S. printer maker rancorously rewrote a 57-year relationship with Japan’s Fujifilm. Xerox’s next move, a hostile $35 billion bid for HP, has now riled Canon, a 35-year HP partner. Aggressive tactics invite copycat responses.

White House race mirrors corporate diversity trap

5 Mar 2020

Senator Elizabeth Warren dropped out of the race to become America’s first woman president. More females are in Congress and closer to the C-suite than ever, but the pipeline breaks down at the top. In politics, voter whim plays a big role. Companies don’t have that excuse.

Guest view: Virus may give Chinese banks M&A bug

3 Mar 2020

The outbreak is infecting the financial system. Lenders must provide new loans, roll over existing ones and cut rates. More small institutions might founder. The crisis, argues author Fraser Howie, creates an opening for consolidation, so long as bailouts have strings attached.

Italy SpA’s game of musical chairs grows tiresome

28 Feb 2020

Directors at Eni, Enel and other state-backed firms worth 40% of Milan’s main index are up for renewal. A three-year rotation gives politicians in Rome too much meddling power and inhibits longer-term planning. Italy, and investors, would be served better by longer tenures.