Divestment

French telco M&A requires more than regulatory nod

22 May 2018

The sector’s supervisor has had a change of heart and is now open to dealmaking. Price wars and investments have bled operators dry. The weakest, Altice and Iliad, are the likeliest targets. But the former is too laden with debt and the latter may be cheaper in a year’s time.

Emirates NBD’s Turkish deal riskier than it looks

22 May 2018

The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.

Insurers risk retreading banks’ pre-crisis folly

22 May 2018

Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.

Hyundai U-turn puts Asia investors in higher gear

21 May 2018

The South Korean conglomerate slammed the brakes on a $9 bln restructuring after investors revolted. It's a big step in a region where shareholders are often given short shrift. Alongside other recent upsets, Hyundai's is welcome evidence the balance of power is shifting.

Barclays trolls activist with Irish mortgage foray

18 May 2018

The UK bank has bought a 4.3 bln pound book of Irish mortgages for 4 bln pounds. With fees from securitising the loans and investors lined up, the deal could make sense. But it sits awkwardly alongside new investor Edward Bramson’s strategy to prune the investment bank.

Vivendi music IPO rests on chart-topping valuation

17 May 2018

The French media group is deciding whether to float Universal Music. A $40 bln valuation suggested by CEO Arnaud de Puyfontaine could boost its shares by 40 pct. Yet a more realistic price tag would create little value, and give shareholders less reason to own Vivendi stock.

Cut-price IPO virus infects Avast’s market debut

14 May 2018

The $3.2 bln Czech cybersecurity outfit priced shares at the bottom of its range, only to see them fall in early trading. High debt, an unfamiliar “freemium” model and governance questions merit a discount. Yet investors have erected a too-strong firewall after recent IPO flops.

Volvo IPO will open road for M&A

11 May 2018

The Swedish group’s Chinese owner Geely may list the business it bought in 2010, profiting from a turnaround. That would raise cash for research and development and facilitate dealmaking. But a mooted valuation of up to $30 billion hinges on unrealistic Tesla-style multiples.

Saint-Gobain and Sika build happy truce

11 May 2018

A takeover battle dating back to 2014 is resolved. The French company ends up more than 600 mln euros better off after buying a stake of Sika and then selling a chunk back. Its former Swiss target pays a relatively low premium for freedom. Shame peace took so long to break out.

AXA’s IPO miss is awkward reminder of XL blunder

10 May 2018

The French insurer has raised $2.8 bln listing its U.S. business. It was hoping for more to help fund the purchase of the Bermuda reinsurer. Given CEO Thomas Buberl was already overpaying, investors won’t be feeling any better about the deal.

Vodafone’s $22 bln deal is worth financial strain

9 May 2018

The UK mobile group is buying Liberty Global’s German and eastern European assets. Boss Vittorio Colao is funding the deal with debt and funky convertible bonds. He can point to juicy cost savings to quell any concerns about Vodafone’s creaky balance sheet.

Billionaire’s Burberry sale is fashionably early

9 May 2018

The luxury brand’s top investor, a vehicle of Albert Frere, has sold its 6.6 pct stake. It’s an odd move for the typically long-term owner. But Burberry’s valuation rivals peers like LVMH, and boss Marco Gobbetti’s turnaround will be a lengthy process. It’s a good time to exit.

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.

Activist tests Lagardere disdain for shareholders

2 May 2018

Amber Capital is pushing for new board members at the $3.7 bln French group. That’s largely symbolic since a funky structure gives boss Arnaud Lagardere control. But the pressure is useful at a time when the unwieldy company is thinking of selling its peripheral media businesses.

India’s top builder starts useful renovation

2 May 2018

Larsen & Toubro is selling its electrical and automation unit to Schneider and Singapore's Temasek for $2.1 bln. It reduces the sprawl of a $30 bln group with lacklustre returns. To achieve ambitious targets could require more remodelling from a CEO less than a year into the job.

Enel and Iberdrola’s Brazil war lacks restraint

30 Apr 2018

The two companies’ rival bids for Eletropaulo have nearly doubled the market value of Brazil’s top utility in a month, to $1.6 billion. The Europeans want to boost their presence in Latin America’s biggest nation. But the deal is too pricey to create much value for the winner.

Sainsbury’s tries to succeed where Walmart flopped

30 Apr 2018

The UK grocer is buying the U.S. giant’s Asda subsidiary for 7.3 billion pounds in cash and stock. Even after passing on some cost savings to shoppers, Sainsbury’s could make a double-digit return on investment. Unless demands from competition authorities eat into the benefits.

WPP’s post-Sorrell era starts with glimmer of hope

30 Apr 2018

The UK ad group’s sales were broadly stable in the first quarter, allaying fears that the exit of long-time CEO Martin Sorrell would prompt clients to flee. And buyout group CVC may be eyeing WPP’s market-research arm. Together that warrants a smaller valuation discount to peers.

TPG’s Baidu deal plays with Chinese fintech fire

30 Apr 2018

The U.S. buyout shop is leading a $1 bln investment in the search giant's payments, lending and wealth management business. It frees up resources for Baidu and helps it focus. For TPG's group, it's a big gamble on a laggard in a cutthroat industry facing tougher oversight.

Once-bitten merger arbitrageurs are twice Shire

27 Apr 2018

The $62 bln Takeda bid should in theory be an attractive hedge-fund plaything. A yawning gap between the offer value and the target's share price suggests otherwise. Multiple currencies and time zones act as deterrents. So too do the scars from Shire's deal with AbbVie.