Management & Leadership

‘Be like Buffett’ mantra takes on new meaning

6 May 2024

Financial masterminds like KKR’s Henry Kravis aped Berkshire’s model by soaking up permanent capital. Yet their stocks have more recently bested the Omaha Sage, burnishing reputations that win plum deals. As Berkshire’s guard changes, New York firms may now overshadow the master.

HSBC’s ideal new boss probably doesn’t exist

6 May 2024

CEO Noel Quinn’s replacement should be familiar with the $167 bln group, have experience of Western and Asian markets, understand wholesale banking, and be available. None of the potential candidates score full marks. Chair Mark Tucker may have to compromise to fill the vacancy.

Shrunken Vodafone has narrow path to growth

2 May 2024

The $24 bln telco’s stock is down since CEO Margherita Della Valle sold the slow-growing Spanish and Italian units. Outside core and mature UK and German markets, hopes for growth rest on corporate clients and Africa. That may not be enough to close Vodafone’s valuation gap.

Anglo breakup costs complicate a sweeter BHP deal

1 May 2024

The miner’s Australian suitor is mulling a hike to its $39 bln proposal. But if Anglo American were to demerge its listed South African units as part of the deal, BHP or any other buyer might inherit a $2 bln tax bill. That may limit BHP boss Mike Henry’s scope for generosity.

Global retailers are headed for Shein reckoning

30 Apr 2024

Zara owner Inditex, H&M and other apparel giants are holding ground against the Asian fast-fashion upstart. However, AlixPartners’ retail expert Matt Clark argues in this Exchange podcast that Shein’s focus on garment quality could threaten the dominance of pricier rivals.

CEO departure puts HSBC at risk of strategy drift

30 Apr 2024

Noel Quinn is retiring from the $164 bln bank after less than five years in charge. If Chair Mark Tucker picks an internal replacement the new broom risks looking like a second choice. Appointing an outsider could leave HSBC without clear medium-term targets for a year or longer.

L’Occitane sets a high bar for Hong Kong exits

30 Apr 2024

Chairman Reinold Geiger’s offer to take his skincare group private values it at 6 bln euros, a decent 30% premium. Funding led by Blackstone might help keep a lid on interest expenses while the company restructures and seeks a listing in Europe. Other buyouts will be trickier.

Sánchez’s psychodrama leaves Spain at loose end

29 Apr 2024

PM Pedro Sánchez is staying on after threatening to resign over a court probe into his wife’s dealings. He appears weakened before a series of elections, raising doubt on his ability to push for reforms and ensure the country remains the fastest-growing major European economy.

BHP investors throw CEO too short an M&A leash

26 Apr 2024

The miner’s stock fell 4.6% after the company proposed to buy Anglo American at a $39 bln valuation. It suggests shareholders fear boss Mike Henry will end up overpaying. But with his low-ball opener leaving plenty of wriggle room to justify upping the bid, that looks premature.

Time for Kering’s king to consider a step back

24 Apr 2024

François-Henri Pinault, heir to the family fortune, has been at the helm of the 40 bln euro French luxury conglomerate for nearly 20 years. With returns shrinking and as flagship brand Gucci struggles, Kering may benefit from fresh blood – and possibly a new CEO.

Shell’s value gap is more strategy than geography

19 Apr 2024

CEO Wael Sawan may shift the $230 bln UK oil giant’s listing to New York if a discount to rivals like Exxon Mobil persists beyond 2025. But Shell’s shifting priorities, slower growth, and unreliable dividends weigh on its valuation. Those factors defy a superficial fix.

UK music fund may walk off stage without encore

18 Apr 2024

Hipgnosis Songs Fund accepted $1.4 bln in cash from US rival Concord Chorus. The 32% premium pitches songs by Neil Young and Shakira at the lower end of their shrunken fair value. With higher-for-longer rates, it’s far from clear that its Blackstone-owned manager will pay more.

Telecom tycoon ensnared by his hefty debt machine

18 Apr 2024

Patrick Drahi built the ocean-spanning Altice empire on the back of aggressive dealmaking and $60 bln of borrowing. The bill is coming due with interest rates elevated. In this Viewsroom podcast, Breakingviews columnists discuss what comes next as bondholders get restless.

Berlusconis have narrow window for German TV bid

16 Apr 2024

The Italian clan’s broadcasting group MFE had banks lined up for a potential $4 bln offer for ProSiebenSat.1, Reuters reported. If they could replicate the savings from a past Spanish merger, the numbers work. The risk is the target’s shares keep rising, undermining the logic.

CVC may leave some money on the table – for once

15 Apr 2024

Valued in line with private-market peers EQT and Blackstone, the group could be worth 20 bln euros. Yet its IPO is raising little new money, and selling shareholders will keep big stakes. That gives CVC a reason to play it safe, unlike when it’s selling portfolio companies.

How Patrick Drahi can clamber out of his debt hole

11 Apr 2024

The tycoon’s Altice telecom empire is straining under $60 bln of borrowings, and creditors of its French unit are gunning for a fight. Yet loose bond terms, and the debt’s low trading prices, lend Drahi an escape route. He just needs to hope investors have short memories.

India can grow fast with or without Narendra Modi

10 Apr 2024

The prime minister is hot favourite to secure a third term, and to lead the country into another decade of economic expansion. Yet projections of 6%-plus annual GDP growth are below the country’s own track record. And hitting the mark does not depend on one man.

Bob Iger now under pressure to wow with an encore

3 Apr 2024

Disney’s CEO worked some magic to stop mouthy Nelson Peltz from being elected to the board. The next trick is to fix streaming and narrow a valuation gap with Netflix. Even if Iger pulls another contract extension out of his hat, shareholders want to see a financial showstopper.

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.

Profitability is next sacrifice at inflation altar

2 Apr 2024

Central bankers want LVMH, Pepsi and others to pay higher wages without raising prices. Bottom lines in the euro zone already have dipped to 40% of output, the lowest rate since 2020, and Big Tech accounts for most US margin growth. CEOs and investors can expect leaner times.