Infrastructure

Vodafone intruder adds hope to activist toolbox

31 Jan 2022

Shareholder Cevian Capital lacks obvious levers to boost the 36 bln pound telco’s performance. Consolidation in markets like Spain, Italy and the UK would lower costs and improve pricing. But success depends on competition watchdogs dropping their opposition to fewer operators.

Capital Calls: GE’s Larry Culp learns to say “no”

25 Jan 2022

Concise views on global finance: It will be a while before the industrial conglomerate’s markets normalize, and its planned breakup takes place. In the meantime GE is trying to cut costs and be more selective. That means less revenue, at least at first.

Capital Calls: Dan Loeb’s gadfly circles again

18 Jan 2022

Concise views on global finance: The U.S. activist’s activists up the ante with call for independent director.

Mammoth re-engineering project begins: Germany

28 Dec 2021

Its manufacturing-led, carbon intensive economy is ill-suited to the 21st century. Chancellor Olaf Scholz and firms like Volkswagen will spend more on green and digital investment. The trick will be to plough on despite short-term supply chain problems and rising labour costs.

Climate-change money will flow freely to Plan B

24 Dec 2021

COP26’s so-so outcome makes damaging temperature rises more likely. At some point, optimal portfolios may require guns and canned food. Until then investors will lean towards shares in Syngenta, Veolia and other companies that aid adaptation to global warming not just mitigation.

Shipping giants will plot course for landbound M&A

22 Dec 2021

Soaring container fees pushed the valuations of seaborne transport companies to record highs. Those trends will reverse in tandem. Still, with sacks of cash on board, ocean-goers like Maersk can buy landlubbing logistics rivals in preparation for the next supply-chain crunch.

Toshiba clears path for big 2022 Japanese buyouts

22 Dec 2021

The $18 bln conglomerate plans to split, but a takeover bid betrayed private equity’s voracious appetite in the country. A few dozen chunky companies suit the LBO financial model, per a Breakingviews analysis. Closer inspection suggests a tempting target among them is Ricoh.

Bolloré’s happy Africa exit hints at more deals

21 Dec 2021

French tycoon Vincent Bolloré may sell his African logistics business to shipping group MSC for 5.7 bln euros. It’s a rich price for an asset tainted by a bribery scandal. He could use the cash to buy more cheap shares in his media group Vivendi, or his own investment company.

KKR sends strong buy signal on European telecom

17 Dec 2021

The private equity firm is paying 1 bln euros for half of a Spanish fibre-optic network at a multiple of 22 times EBITDA. It already owns Madrid-based Masmovil, tilted at Dutch operator KPN in May and is stalking Telecom Italia. Eventually, public investors will get the message.

KKR can still find gems in Telecom Italia’s wreck

16 Dec 2021

Chopped into bits, the struggling Italian telecom operator may be worth 38 bln euros including debt. Its network alone, in which its U.S. stalker has a stake, is probably worth almost half that. A breakup may add a quarter to the fund’s 10.8 bln euro prospective offer.

Billionaire Drahi plays the long game at BT

14 Dec 2021

The Franco-Israeli tycoon has upped his stake in the UK telco to 18%. The government would almost certainly nix a full bid, especially with BT’s fibre-optic rollout hitting top speed. But with operators across Europe falling into private hands, Drahi can afford to sit and wait.

Europe’s phone firms line up for last tower dance

10 Dec 2021

Vodafone and Deutsche Telekom bosses both want to hook up their mast divisions with a partner. France’s Orange is also in the mix, having just completed an internal carveout. With its tower unit already listed, Vodafone has an advantage. An Orange tie-up is the simplest fit.

Bondholders are biggest losers in telco LBO frenzy

1 Dec 2021

Telecom Italia’s bonds fell on fears that the securities may not be redeemed if KKR’s $37 bln buyout succeeds. The M&A boom has made unexpected targets of large public companies. Even when investors enjoy stronger protections, as with UK rival BT, these offer limited solace.

Telecom Italia will keep bankers busy in 2022

29 Nov 2021

KKR’s $12 bln proposal has put the telco in play. The process is likely to involve multiple bidders and key actors including French shareholder Vivendi and the Italian government. As with Telecom Italia’s 1999 leveraged takeover, it’s a boon for bankers, lawyers and consultants.

Mukesh Ambani BT bid would struggle for clear line

29 Nov 2021

His Reliance would earn a so-so return buying the UK telco’s enterprise for 38 bln pounds. It’d be a distraction for his energy-to-retail conglomerate’s huge India ambitions too. He can more comfortably get a taste of a rich market by narrowing his focus to BT’s broadband unit.

Cox: Telecom Italia and the curse of the euro era

25 Nov 2021

The 1999 buyout of Italy’s phone monopoly baptised Europe’s new single currency. The years since have been terrible for the company and its many trophy-seeking owners, who have lost some $23 bln. Here’s why the latest offer from private equity firm KKR offers hope for redemption.

KKR has wiggle room to sweeten Telecom Italia bid

24 Nov 2021

The U.S. private equity group will need to raise its 33 bln euro offer for the Italian telco to win over investors Vivendi and CDP. It’s already the largest buyout in European history. But KKR has ways to fund the deal without overloading Telecom Italia with debt.

Capital Calls: China’s data centre sale

24 Nov 2021

Concise views on global finance: Global Switch is attracting big-name private equity interest, but its quirky setup might justify suitors asking for a discount.

KKR bid is next act in Telecom Italia soap opera

22 Nov 2021

The buyout group wants to take the phone operator private for 10.8 bln euros. Offering less than the pre-pandemic share price looks opportunistic. Yet the 47% premium will tempt all but top investor Vivendi, which is nursing hefty losses. The board should start a conversation.

Biden at war with himself on supply-chain battles

16 Nov 2021

The U.S. president wants to ease bottlenecks but punitive tariffs on Chinese-made port equipment, a vaccine employer mandate, and expiring contracts with a dock workers union stand in the way. Solving the problems require changing Biden's policies. Neither will be fixed soon.