Divestment

Capital Calls: BT, Mediobanca

18 May 2023

Concise views on global finance: The 14 bln pound UK telco’s vague guidance is a concern for its two big shareholders seeking to recoup losses; the 8.5 bln euro Italian bank buys its biggest boutique yet.

Telecom Italia is stuck in risky game of chicken

4 May 2023

The telco’s board must decide on rival bids from KKR and state investor CDP for its fixed-line grid. None comes close to the 31 bln euro price wanted by top investor Vivendi, but cash is needed to slash debt. If neither side blinks, the group could face a messy capital increase.

EY’s split fiasco will spark slow-motion decline

25 Apr 2023

The audit giant’s bean-counters are insulated against a rapid loss of business after its failed breakup. But EY’s more profitable consulting arm, including its prize tax unit, is less so. More reticent new clients and staff may see the Big Four become the Big Three-and-a-half.

J&J carves itself up at a discount

24 Apr 2023

The healthcare giant is floating part of its Listerine-to-Tylenol business with a mooted price of $40 bln, a 20% discount to rival Haleon. Litigation risk and an inhospitable market may leave J&J with a valuation wound in need of a Band-Aid. For investors, it’s worth the risk.

Man U sale rejig will perturb other soccer sellers

19 Apr 2023

The Glazers want to sell the Red Devils for $7 bln, but may have to settle for a stake sale to private equity instead. That raises the question of whether club valuations have peaked. If so, the likes of Man City’s Silver Lake may find it harder to secure a lucrative exit.

Pirelli will help read China investment tea leaves

4 Apr 2023

Sinochem has denied plans to ditch a 37% stake in the Italian tyremaker. But Beijing’s pressure on state-controlled firms to boost shareholder value and dump non-core assets may lead to a sale. Pirelli’s fate will have a bearing on China’s $1 trln overseas portfolio.

Alibaba breakup sends positive vibes to investors

30 Mar 2023

The $265 bln Chinese tech giant is splitting into six pieces. In this Viewsroom podcast, Breakingviews columnists discuss how the move could be replicated by peers like Tencent and how Beijing’s business charm offensive is sending the right signals to China watchers.

Alibaba drafts breakup blueprint for China tech

28 Mar 2023

The $228 bln e-commerce group is splitting into six units spanning logistics to games, which may be listed. That should unlock value for weary shareholders, and please regulators keen to control strategic businesses. If done right, pressure for Tencent to follow may rise.

Deutsche Bahn $16 bln sale has non-obvious endgame

24 Mar 2023

The German railways group may sell logistics arm DB Schenker for over $16 bln to cut debt. The most obvious fit is rival DSV. But selling to private equity or French shipping giant CMA CGM could mean fewer job cuts, which may be more appealing to Deutsche Bahn’s state owner.

John Lewis needs a breakup more than a rescue

23 Mar 2023

The UK employee-owned retailer wants to raise $2.5 bln to improve its ailing stores. But that could leave a new investor owning nearly half the company, undermining its mutual status. Merging its grocer Waitrose with rival M&S would bring in cash and forge a more viable player.

Capital Calls: Maserati

21 Mar 2023

Concise views on global finance: The Italian sports car maker owned by Stellantis wants to lift its operating margin to 20% before considering a spinoff.

Banks’ state shareholders can afford slow selldown

2 Mar 2023

The Belgian and Dutch governments took advantage of a market rally to offload chunks of BNP and ABN. Valuations have risen but are still low relative to lenders’ returns. That means Britain and Germany would be wise to move gradually with their NatWest and Commerzbank holdings.

Capital Calls: World Bank, Bumble, Wood Group

23 Feb 2023

Concise views on global finance: The U.S. picks ex-Mastercard boss Ajay Banga to run the multilateral development bank; while the dating app’s shares are down, private equity owner Blackstone is still in the money; the UK oil services group has turned down three bids from Apollo.

TCI’s Airbus fury may have collateral benefit

22 Feb 2023

Hedgie Chris Hohn says the plane maker’s plan to buy a 30% stake in Atos’s cyber arm will destroy value. He’s probably right, but private investors take a back seat in defence deals, where governments call the shots. His salvo might however help Airbus drive a harder bargain.

Glencore’s coal fudge risks satisfying no one

15 Feb 2023

The dirty fuel is booming, and made up half of the $80 bln commodity giant’s 2022 EBITDA. Green investors may want CEO Gary Nagle to phase it out faster, while financially motivated ones would favour more mining. He’s doing neither, and paying the price with a middling valuation.

Telecom Italia breakup can please all its masters

15 Feb 2023

The sickly telco needs to cut its 25.4 bln euro debt pile. Selling its fixed-line grid to KKR offers a fix, provided the government gets a stake in the strategic asset. For major investor Vivendi, the upside would be a chance to sell Telecom Italia’s revamped service business.

Bayer’s new CEO plants seed of future breakup

9 Feb 2023

Bowing to pressure from activist investor Jeff Ubben, the $66 bln drugs-to-seeds maker is replacing embattled boss Werner Baumann. Ditching the architect of the ill-advised Monsanto deal makes sense. Hiring pharma expert Bill Anderson suggests the crop division may be spun off.

Credit Suisse overcooks First Boston sales pitch

6 Feb 2023

The Swiss bank wants to sell $500 mln of debt, with a twist: it will be repaid with shares in its dealmaking business when that gets spun off, Reuters reported. It’s potentially a cheap way of raising funds. But it assumes investors will want those shares when the time comes.

Liberated GSK is still searching for booster shot

1 Feb 2023

The $72 bln drugmaker spun off its consumer unit last year to focus on prescription medicines. But it now trades at a discount to European rivals. To close the gap, CEO Emma Walmsley needs to deliver new drugs, fend off Pfizer’s respiratory vaccine, and prove her M&A skills.

Vodafone stake-builder sends fuzzy breakup signal

24 Jan 2023

UAE telecoms group e&’s 12% holding in its $31 bln UK peer makes it seem like a full bid or a breakup lies just around the corner. But the $61 bln Middle East stake-builder doesn’t seem that keen. And most of Vodafone’s many locales look hard to split off anyway.