Divestment

Italy’s TIM grab gives investors two messy options

5 Apr 2018

State investor CDP may buy 5 pct of Telecom Italia. If it sides with Elliott, the activist fund could take control from top shareholder Vivendi. The French group’s oversight of TIM has been dysfunctional. But protectionism coupled with complex ownership is also unappealing.

Leaving Intu at till is first step for Hammerson

5 Apr 2018

The UK shopping centre owner is waiting to see whether rival Klépierre makes a formal bid before it commits to buying smaller Intu Properties. Shareholders have already turned down their thumbs at the Intu deal. A sweeter offer from the French group would be a better outcome.

Fidessa bidding war allows Temenos a sensible exit

5 Apr 2018

The British financial technology group has two further suitors, having agreed a 1.4 bln pound offer from the Swiss bank-software supplier. That price was already high, and a sweeter offer would stretch the financial logic further. Best to let SS&C and Ion fight it out themselves.

Private equity’s retail fix risks landlord revolt

5 Apr 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Berlusconi scores point off Bolloré in mogul feud

3 Apr 2018

Shares in the former prime minister’s Mediaset TV group jumped after it agreed to collaborate with Sky’s Italian unit. An investor in Mediaset, Vincent Bolloré’s Vivendi will gain from the deal. But, as Berlusconi and Sky grow closer, Bolloré’s own ambitions risk being sidelined.

Siemens’ slimming strategy is half-hearted

3 Apr 2018

A part-sale of medical unit Healthineers has failed to shrink the German company’s conglomerate discount. After all, the 84 bln euro group still spans trains, energy and factories. Siemens’ exit from the lighting and mobile businesses offers CEO Joe Kaeser a useful template.

Melrose wins battle for GKN, UK M&A may be loser

29 Mar 2018

The takeover specialist's 8 billion pound bid for engineering group GKN has won the day. It now needs a turnaround plan that squares with pledges that were made to placate politicians. And potential bidders for other UK companies know they face a more interventionist government.

CME stretches to kill NEX bidding war

29 Mar 2018

The Chicago Mercantile Exchange owner is buying Michael Spencer’s broker for 3.9 billion pounds. Meshing U.S. Treasury futures trading with NEX’s currency and bonds business is a good idea. The hefty premium may deter rival bidders but requires the deal to be perfectly executed.

Tricky Renault-Nissan deal would be rewarding

29 Mar 2018

The French and Japanese groups chaired by Carlos Ghosn may merge to create a carmaker that trades as a single stock. The Gallic state, which owns 15 pct of Renault, would put up roadblocks. But after 19 years of cooperation, margins are low enough to make the union worth a try.

Drug companies take the anti-Amazon pill

27 Mar 2018

Novartis is selling its consumer health assets to GSK for $13 bln. It makes sense for the former to focus on traditional drugs given the threat from e-commerce. For the latter, the purchase is less risky than a Pfizer deal and may still allow investment in its core business.

Carlyle’s $12.6 bln Akzo deal has good chemistry

27 Mar 2018

The U.S. private equity group is buying a speciality chemical unit that the Dutch company put on the block after a failed PPG bid. Carlyle knows the industry and has slashed costs at Axalta. While there may be less scope for huge cuts this time, decent returns are still on offer.

Dana keeps GKN defence hopes alive

26 Mar 2018

The U.S. car parts maker raised its cash and shares offer for GKN’s auto unit by $140 million to thwart Melrose’s bid for the whole UK engineering group. The extra cash only compensates for recent falls in Dana’s share price. But given how tight the race is, any increase helps.

Deutsche fund IPO flaunts sickly bank

23 Mar 2018

The German bank’s IPO of asset management arm DWS has failed to create value. The rump bank and listed manager are worth at least 3 bln euros less than Deutsche was before the spinoff. The loss shows the limits of corporate rejigging, and upheaval still facing CEO John Cryan.

GKN owners should stick with the devil they know

23 Mar 2018

The UK engineer’s shareholders must choose whether to accept Melrose Industries’ $11 bln hostile cash-and-share bid. The buyer has a record for turnarounds, while GKN has missed targets. But Melrose’s plans are vague and riskier. GKN deserves the benefit of the doubt.

Naspers selldown prolongs Tencent dependence

22 Mar 2018

The South African group is offloading shares worth up to $11 bln in the Chinese giant. But it’s keeping the remaining 31 pct for at least three years, and will invest the proceeds. Shareholders have little reason to give it any more credit for its highly profitable Tencent bet.

Reckitt may yet benefit from Pfizer’s poor timing

22 Mar 2018

The Dettol maker’s shares jumped after it pulled a bid for the U.S. group’s consumer arm. The auction coincided with CEO Rakesh Kapoor’s struggle to digest a big deal, and rival GSK’s need to focus elsewhere. If Pfizer delays the sale, Reckitt could limber up for a second shot.

Time for Germany to make Deutsche/Commerz happen

21 Mar 2018

The country’s two biggest banks are projected to scrape mid single-digit returns on tangible equity by 2019. A merger that cut a tenth of joint costs could get that closer to double-figures. It could also stabilise Deutsche and give Berlin an excuse to sell its Commerzbank stake.

Elliott’s Italian master plan needs state player

16 Mar 2018

The activist fund wants to oust top investor Vivendi from Telecom Italia’s board and sell its network. A stand-alone telco backbone might attract a higher valuation and be able to shoulder more debt. However, success hinges on state-backed investor CDP’s readiness to chip in.

Altice investors require a stomach of steel

16 Mar 2018

Patrick Drahi’s telecom group has lost half its market value in less than five months. Spinning off the U.S. arm is sensible. But the slimmed-down parent’s 31 billion euros of net debt is almost 15 times its implied equity value. That is a recipe for wild share price swings.

Elliott picks unusual allies for Italian battle

15 Mar 2018

Paul Singer’s hedge fund wants to oust Telecom Italia’s chairman and other directors backed by top shareholder Vivendi. Nominating well-connected locals improves its chances of success. Still, it’s odd to see the free market champion joining forces with the Italian establishment.