Restructuring

Michael Klein’s fourth act may be his toughest

28 Oct 2022

The former Citigroup rainmaker who went solo and then launched $5 bln of SPACs is now set to run Credit Suisse’s advisory unit. It’s odd for a director to parachute into the C-suite, but the bank had no better pick. The bigger issue is CS First Boston’s clunky ties to its parent.

Credit Suisse legal tab is wildcard for investors

17 Oct 2022

The bank settled an old mortgage case without having to set more money aside. But the bill for future litigation, up to $1.6 bln on its own estimates, will erode earnings. The risk for investors in a looming rights issue is that further nasties bog down the bank’s restructuring.

Credit Suisse can stop rot with $5 bln cash call

5 Oct 2022

Heavy investment-bank losses and higher funding costs risk damaging the Swiss group’s core wealth unit. Chair Axel Lehmann can draw a line by ditching debt trading and slashing costs. To shrink he needs more capital. Asking investors for equity is cleaner than tricky asset sales.

Credit Suisse selloff throws wrench into revamp

3 Oct 2022

The bank’s shares fell 8% on Monday and the cost of insuring its debt soared. Chair Axel Lehmann may struggle to sell assets amid the turmoil, undermining a strategic overhaul. A sustained rout could even force him to raise capital fast – at a painful valuation for shareholders.

SocGen’s new insider CEO requires outsider mindset

3 Oct 2022

The French lender trades at a third of tangible book value – lower than almost all its rivals. Next boss Slawomir Krupa previously ran investment banking and eastern Europe, both of which arguably drag down its shares. Breaking with the past may require shrinking his old charges.

Capital Calls: SPACs’ long shadows

12 Sep 2022

Concise views on global finance: While electric-vehicle startup Nikola is moving beyond its founder, both it and its SPAC-partner peers are mired in supply chain challenges, slipping deadlines and tumbling share price performance.

Capital Calls: Tech bros give Allbirds the boot

9 Aug 2022

Concise views on global finance: The maker of popular nondescript sneakers with a purpose is getting tripped up on demand. Its stock price pounding may make it vulnerable to a takeover.

GSK spinoff boost may be as good as it gets

18 Jul 2022

The drugmaker’s Haleon consumer unit started trading at 40 bln pounds including debt – below the 50 bln pound offer it rejected from Unilever. The Sensodyne maker has hefty borrowings and two big investors eager to sell. But its valuation mostly prices in a healthier future.

Renault is awkward guinea pig for Tesla-like trick

13 Apr 2022

The group may list its electric-vehicle business. Automaker CEOs look enviously at the rich valuation of Elon Musk’s group. Yet Renault’s battery unit is modest, and poor profitability and messy governance would mean its rump combustion operation would look even less desirable.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

Eni’s quirky rejig may turn rivals green with envy

24 Jan 2022

Italy’s $54 bln oil major may list stakes in its green energy and biofuels arms, as well as a Norwegian subsidiary. That’s different from rivals which are financing green investments by selling fossil fuels. Yet if Eni’s spinoffs get cheaper financing, others may follow suit.

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.

Toyota will send its hybrids to the breaker’s yard

14 Dec 2021

The $250 bln carmaker is dramatically increasing its electric ambitions after lagging for years. It could help defend its earnings multiple lead over Ford and GM. But Toyota still lobbies against tougher emissions standards. Powering down its hybrids will add carbon clarity.

Capital Calls: UBS, Pfizer, Peloton

13 Dec 2021

Concise views on global finance: An appeals court has reduced a penalty for the Swiss bank by 60% for tax wrongdoings; the U.S. pharma group is buying a drugmaker to bolster its post-pandemic growth options; real risks are a bigger threat to the bike-app company than fake ones.

Alibaba’s new CFO signals shifting priorities

6 Dec 2021

The Chinese e-commerce company, whose market value has halved to $300 bln this year, is replacing finance chief Maggie Wu. During her seven-year tenure, Alibaba successfully courted foreign investors. Successor Toby Xu’s experience suggests there will be a greater focus at home.

Viewsroom: European bank M&A, De-Dutching Shell

18 Nov 2021

Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.

Shell’s Dutch exit comes with legal side benefits

15 Nov 2021

Shifting its tax residency to the UK, along with its head office and CEO, simplifies the $170 bln oil major’s structure. It also makes it easier to reorganise for the energy transition. The implied snub to the Dutch court which ordered Shell to cut emissions is an added bonus.

J&J breakup about more than financial engineering

12 Nov 2021

The $429 bln maker of shampoo and vaccines is splitting in two. A valuation uplift looks likely as consumer giants like P&G fetch higher multiples than pharma groups. Giving the business a separate life, with its own currency, opens the door to other possibilities, including M&A.

Credit Suisse bland revamp has a valuation penalty

4 Nov 2021

Chair António Horta-Osório is moving $3 bln of capital from the investment bank to wealth management. But he’s keeping most of the error-prone unit, which chews up capital and has few synergies with the rest of the bank. The clunky structure cements a share price discount to UBS.

Capital Calls: BT’s fibre, Ford vs. Toyota, SocGen

4 Nov 2021

Concise views on global finance: Leaner broadband rollout boosts the UK telco’s defences against uppity investor Patrick Drahi; the two carmakers trade at similar multiples despite the Japanese outfit’s racier performance; the next leg of the French bank’s revamp will be harder.