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Leisure/Hotels

Big Beer’s stumbles leave investors ice cold

14 Aug 2024

Heineken shares are down after it disappointed investors hoping for a sport-fuelled profit party. Rival Carlsberg’s valuation has fallen due to a $4 bln soft drinks takeover. For CEOs, emerging markets growth and deals in the right areas are the only way to add fizz to stocks.

Diageo’s succession hangover has fuzzy duration

30 Jul 2024

The $67 bln drinkmaker’s 2023 promotion of CEO Debra Crew was seamless. But Diageo’s share price has slumped since, and some of the problems are self-inflicted. Crew’s future may hinge on a rebound of US consumer sentiment, rather than any bold change of strategy.

Booze-free beverages are no small beer

11 Jul 2024

Carlsberg’s $4 bln deal to buy soft-drinks maker Britvic is just the latest foray by a big brewer into serving the alcohol-averse. In this Viewsroom podcast, Breakingviews columnists discuss whether it’s a seismic tobacco-like shift or a frothy attempt to fizz up profit margins.

Cruise-ship IPO bets the rich will always float

23 Apr 2024

Viking is seeking an $11 bln valuation in its US listing — a premium price relative to the larger Carnival and Royal Caribbean. As ballast, it offers a focus on high-end customers and less debt than peers. Investors will be reliant on the whims of the few, in more ways than one.

European airlines’ hot summer belies sector clouds

23 Apr 2024

Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.

Soho House’s private party may prove disappointing

2 Apr 2024

Executive Chair Ron Burkle could bless a de-listing of the loss-making $1.1 bln chain of members’ clubs, which he reckons will one day generate handsome earnings. He’s only right if the new sites, like São Paulo and Bangkok, prove as popular as the older ones. It’s a gamble.

McDonut is a happy meal without M&A mess

26 Mar 2024

Krispy Kreme will sell donuts at McDonald’s, sending shares in the pastry maker up 25%. That cuts costs to build stores, akin to synergies, while the $200 bln burger chain takes on little risk. In a world with high rates and harsh trustbusters, it’s a smart twist on dealmaking.

Hotel-deal hostility just piles on extra baggage

13 Dec 2023

Radisson-owner Choice is taking its $7 bln offer directly to Wyndham shareholders. The target’s stock price reflects some doubts about chances for success. Even with the added threat of a proxy fight, investors have good reason to want more cash and less of the buyer’s equity.

Choice Hotels takes a vacation from reality

21 Nov 2023

The Comfort Suites operator has taken another stab at its unsolicited and unwelcome $9.8 bln offer for rival Wyndham. The part-shares deal is easy to rebuff in a wobbly market where cash is king. But switching it to cash could leave Choice with hefty debt and unhappy customers.

Capital Calls: Starbucks’ wages

6 Nov 2023

Concise views on global finance: Only US baristas with five years of experience will get above-average raises in 2024. Despite more than 9,000 organized workers, Starbucks is dodging the labor pressures faced by shipping firms and automakers this year.

Capital Calls: Paramount’s stricter streaming

3 Nov 2023

Concise views on global finance: The media stalwart’s shares popped 10% as boss Bob Bakish predicted that losses from its costly streaming push have topped out. But the company still faces a cutthroat market full of better-resourced rivals.

Wyndham suitor is unprepared to check in just yet

18 Oct 2023

After months of talks, rival hotelier Choice went public with a $10 bln offer, putting pressure on its target’s board. Despite a 38% premium, the deal lacks a compelling valuation and could lard on heavy debt. It also glosses over competition risks. There’s some tidying up to do.

Retailer ‘shrink’ becomes too big to box up

3 Oct 2023

American stores lost $73 bln to theft last year, a nearly 20% rise from 2021, while Target just blamed crime for nine closures. Few chains report specifics, however, stirring doubts about anecdotal evidence. Consistent disclosure would help keep investors from getting fleeced.

Tidy-up puts $70 bln tobacco giant in good company

26 Jul 2023

India’s ITC is spinning off its hotels business but keeping a 40% stake. It’s a partial break from the firm that counts British American Tobacco as its top owner. Yet it may be the best way to close a valuation gap with its Tata-backed rival and fully cash in on a tourism boom.

Capital Calls: Eli Lilly gorges on obesity options

27 Jun 2023

Concise views on global finance: The drugmaker found patients losing an incredible 24% of their weight on one of its latest treatments. First-movers don’t always win out in pharma, however, as Pfizer proved with Lipitor. That’s why Lilly is wise to keep investing in alternatives.

MGM’s bet on Asia’s next Macau may age well

26 Apr 2023

The US casino operator will open Japan’s first casino. It isn’t an obvious destination for gambling: Sands and Wynn stayed away, preferring Singapore and the UAE. But the Osaka resort could be as big a money spinner for the operator as its properties in the Chinese hub.

Capital Calls: Starbucks

21 Feb 2023

Concise views on global finance: The $123 billion coffee chain’s new patent filing speaks to popular TikTok campaigns for more bespoke beverages – and other labor challenges.

Macau bounces into Year of the Rabbit

19 Jan 2023

Spring has sprung in the casino hub with the end of China’s zero-Covid. Operators will return to profit. Yet from Sands to SJM, balance sheets are stretched. How quickly they are repaired depends on if punters spend as much as before. Pandemic policies will leave other scars too.

Capital Calls: Barbarians at the check-in desk

22 Dec 2022

Concise views on global finance: Hotel landlord Vivion is engaged in a war of words with short-seller Muddy Waters, but it could fight back more effectively with cash.