Divestment

Sky upside depends on Disney-Fox irrationality

25 Apr 2018

Brian Roberts’ Comcast formalised a $31 bln bid for the UK group. Rival suitors Bob Iger and Rupert Murdoch, of Disney and Fox, will struggle to match the U.S. cable giant’s synergies. Sky investors betting on a counteroffer must hope the media moguls ditch financial logic.

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.

Subsea 7 can still save McDermott from itself

23 Apr 2018

The Oslo-listed oil services group has lobbed in a $2 bln offer for its U.S. counterpart. Subsea 7’s bid looks low, and hinges on McDermott ditching an agreed deal with CB&I. But CB&I’s sale of Stone & Webster to Toshiba is a bad precedent, and Subsea 7 can afford to pay more.

Poker group bets $5 bln on Sky-high sports growth

23 Apr 2018

Canada’s Stars Group is buying UK online sports-gambling specialist Sky Bet. The price is more than current owners CVC and Sky would have got in a mooted IPO. For Stars, the debt-heavy punt only works if Sky Bet’s rapid growth continues - or the U.S. relaxes sports-gambling laws.

Breakdown: Telecom Italia’s three-way poker game

23 Apr 2018

The incumbent telco is entangled in its umpteenth debilitating corporate fight. The row pits U.S. activist investor Paul Singer against French financier Vincent Bolloré. But an Italian state investor may be the key player. Breakingviews explains how the cards will fall.

Wesfarmers exposes its conglomerate discount

24 Apr 2018

By opting to spin off Coles Supermarkets, the $35 bln Australian group invites scrutiny of its coal-to-clothes hodgepodge. A Breakingviews analysis suggests a gap of 11 pct between its market value and the sum of its parts. It's enough to spur a fresh strategic review.

Shire makes needy suitors work for risky bet

19 Apr 2018

The London-listed pharma group has rejected a 42 bln pound offer from Osaka-based Takeda, and may now face a bid from Botox-maker Allergan. Shire’s business has its challenges, but its would-be acquirers have strategic issues and need a deal. The risk of overpaying is going up.

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.

Nestlé and Unilever switch focus to shopping lists

19 Apr 2018

The consumer giants reported strong sales growth in the first quarter; a welcome change after two years of sluggish demand. With share prices flatlining, though, a further shake-up of their brands is likely. There are growing signs of where both companies are looking to buy.

Hammerson’s M&A fumble leaves defences down

18 Apr 2018

The shopping centre operator ditched a 3.4 bln pound plan to buy rival Intu after shareholder pressure. The group will now sell assets and focus on posh malls, but the U-turn makes it vulnerable. The UK’s strict takeover rules give rejected suitor Klepierre a narrow way back.

French telco jigsaw missing key regulatory piece

17 Apr 2018

Bouygues could bid for Altice’s French business, Bloomberg reports, to end a painful price war. It’d make more sense than failed 2016 talks with state-owned Orange. But regulators may still prefer four less-profitable operators to three stronger groups with power to raise prices.

Shire cancer sale boosts weak takeover defences

16 Apr 2018

The $47 bln drugmaker facing a potential bid from Takeda sold its cancer treatments for $2.4 bln. Shire’s debt and doubts over its business weaken its resistance. The best bet may be to show that a Takeda offer undervalues its business. But more radical surgery could be tricky.

Hammerson has walked away from wrong deal

13 Apr 2018

The mall operator’s aversion to Klepierre’s 5 billion pound offer has driven away the suitor. The UK company is now free to pursue the takeover of a smaller rival in its home market. But the drawbacks of the plan and its clumsy defence risk irking investors.

Apollo’s Greyhound bet looks past UK politics

12 Apr 2018

Transport operator FirstGroup has rejected an approach from the U.S. buyout giant. The offer is bold given the UK backlash against rail privatisation. But the company’s American operations, including the iconic long-haul buses, help support its 1.3 bln pound market value.

New VW boss would only part-solve its problems

10 Apr 2018

The German carmaker may replace CEO Matthias Mueller after just two-and-a-half years. Probable successor Herbert Diess brings a welcome outside perspective having only joined 2015. His difficulty will be getting the conservative board’s approval for radical moves like spinoffs.

Tenneco and Icahn pull a mini DowDuPont

10 Apr 2018

The U.S. auto-parts maker is paying $5.4 bln including debt for Federal-Mogul, owned by the investor’s listed entity. The plan is to break the merged company into two, boosting the overall value. Shareholders shoulder risk when deals have several steps. But the logic holds up.

Bayer investors get unwelcome antitrust present

10 Apr 2018

The German company has struck a deal with U.S. regulators to clear its $60 billion acquisition of seed group Monsanto, the Wall Street Journal reported. After EU approval in March, a two-year saga is almost over. Bayer’s sagging stock price means shareholders can hold the cheers.

Canines chase cars, except in case of eHi’s buyout

9 Apr 2018

The Chinese auto-rental agency has been a dog since its IPO in 2014. While travel is growing in the People’s Republic, that hasn’t translated into a robust business. Still, compared to similar species like Car Inc, eHi's public owners will be fortunate to exit free of bite marks.

Novartis $8.7 bln splurge balances risk and growth

9 Apr 2018

The Swiss drugmaker paid a near 90 pct premium for AveXis, which is developing a treatment for spinal muscular atrophy, weeks after selling its consumer drugs joint venture. Experimental drugs offer faster growth than painkillers but more risk. It’s a pricey way to boost revenue.