Divestment

GKN breakup defence is still on drawing board

12 Jan 2018

The UK engineer grappling with an accounting scandal rejected a $9.5 bln offer from serial acquirer Melrose. Its alternative plan of splitting itself in two makes sense and could deliver more value. But investors need more proof it can fix its business, and a clearer timetable.

Puma spinoff helps Kering’s race-fitness

11 Jan 2018

Gucci’s parent will hand investors most of its stake in the German sports label, a distribution worth 3.5 bln euros. Offloading the lower-end brand should boost the 52 bln euro luxury group’s value. Kering may even be able to leave behind its traditional discount to rival LVMH.

Continental would move to higher gear with breakup

9 Jan 2018

The $57 bln auto supplier is reportedly considering a business overhaul, including listing its tyres unit. That fits with a trend for breakups at auto groups, and would boost its valuation. The Schaeffler family, Continental’s largest shareholder, is a potential roadblock.

Drahi U-turn makes Altice’s problems easier to see

9 Jan 2018

Patrick Drahi is spinning off his cable group’s U.S. unit, raiding it for 900 million euros, and re-organising a struggling European business. The new structure will show whether he is doing enough to tackle slow growth, high debt, and a questionable content strategy.

Ambani’s debt cure is no elixir for shareholders

28 Dec 2017

Anil Ambani says he has rescued his Reliance Communications with a $6 bln firesale. That’s a relief for lenders, assuming buyers turn up as promised. But it’s not the moral victory the tycoon claims. Even if creditors play ball, investors are left with a much diminished company.

KKR benefits from Unilever’s weight-loss drive

15 Dec 2017

The buyout firm is paying $8 billion for the consumer giant’s unloved margarine unit. Though sales are stagnant, hefty leverage and more focused managers should enable KKR to earn a healthy return. What’s less clear is why Unilever was unable to make those improvements by itself.

Li & Fung family rearranges its sweater drawer

15 Dec 2017

The Hong Kong conglomerate is offloading its struggling knitwear, furniture and beauty products divisions for $1.1 bln. Buying them for a healthy price is a group led by the Fung clan. A company dividend will return some proceeds to them. It's a cozy solution to a prickly problem.

China’s medical reform is pain for foreign pharma

15 Nov 2017

Shanghai Pharmaceuticals agreed to buy the China drugs-distribution business of Cardinal Health for $557 million. It looks like a reasonable deal for both sides. It also highlights how even well-meaning medical reforms could prompt some foreign firms to look for the exits.

Fake news clouds real AT&T-Time Warner concerns

15 Nov 2017

America's No. 2 phone company cites 40 years of merger approvals as reasons why its $85 bln takeover should pass muster. A shifting media landscape might justify a new approach. The U.S. president's vitriol over the fate of CNN, which Time Warner owns, is an unhelpful distraction.

GE’s shaman exorcises ghosts of false expectations

13 Nov 2017

It doesn't take much imagination at work to grasp John Flannery's approach to the $178 bln conglomerate. He has halved the dividend, cut earnings guidance and questioned GE's portfolio of industrial assets. Next up is a total restructuring of GE's bloated, under-engaged board.

Mickey Mouse offers Sky investors an escape hatch

9 Nov 2017

Walt Disney has expressed interest in buying parts of Twenty-First Century Fox, including its 39 pct stake in the British TV group. That gives Sky shareholders another option if regulators block Fox’s 11.7 bln pound bid for full control. Disney may even be a more logical owner.

U.S. watchdog bares unexpected teeth on AT&T deal

8 Nov 2017

The telecom firm may have to sell Time Warner’s cable unit with CNN to win approval of the $85 bln tie-up. The Trump administration had been expected to go easy on big M&A. If the Justice Department is taking a tougher stance, corporate America will need to rethink strategy.

Arqiva’s old-school TV vibe creates IPO static

24 Oct 2017

The UK broadcast and mobile masts company plans to raise 1.5 bln stg. An order book of mostly inflation-proofed long-term contracts and the pledge of big dividends are appealing. Less so is its reliance on TV towers rather than the cell ones that are tomorrow’s money spinners.

Russia power IPO lacks “pass the parcel” discount

23 Oct 2017

Oleg Deripaska’s En+ priced its London IPO with a valuation of up to $8.5 bln. On the surface that makes it a cheap way of buying Rusal, the Hong Kong-listed aluminium producer it controls. The catch is that investors can’t see how this portfolio rejigging will shake out.

Private equity margarine bet needs activist backup

18 Oct 2017

Buyout firms may pay up to 7 billion euros for Unilever’s spreads unit. The new owners will need to stem falling sales as shoppers shun artificial produce. Acquiring other brands from food companies under pressure from uppity shareholders could be one way of boosting returns.

Time for Barclays to sever its U.S. cards arm

10 Oct 2017

CEO Jes Staley has a conundrum: the UK bank’s market value is so depressed investors are essentially getting the U.S. credit card business for free, according to Breakingviews calculations. Spinning off the unit would make Barclays less complex and help it to a richer valuation.

Mediobanca tries to have Generali cake and eat it

20 Sep 2017

The bank may sell a 3.2 bln euro stake in Assicurazioni Generali to a vehicle shared with other investors. The baroque plan would give Mediobanca capital to grow, and allow it to keep its influence over Italy’s biggest insurer. The appeal for its potential partners is less clear.

Memory sale leaves a hollowed-out Toshiba

20 Sep 2017

After many leaks, lawsuits and U-turns, Toshiba is set to sell its prized flash-memory unit to Bain and partners for $18 bln. A successful sale would fix the balance sheet and placate lenders. It also reduces a Japanese industrial icon to a ragbag of barely profitable businesses.

Telecom Italia breakup is a three-way tug of war

24 Aug 2017

Government ministers are talking about separating Telecom Italia from its network. A breakup could be beneficial for the Italian government, and TI’s biggest shareholder Vivendi. Other shareholders would be harder to satisfy.

Total gives Maersk a crude $7.5 bln exit from oil

21 Aug 2017

The Danish conglomerate will get a 3.8 pct stake in French energy major Total in return for its oil assets. While the price looks good, Total’s stock has underperformed Maersk’s. At least Maersk investors may retain exposure to the rich synergies Total is predicting.