Restructuring

TPG’s Baidu deal plays with Chinese fintech fire

30 Apr 2018

The U.S. buyout shop is leading a $1 bln investment in the search giant's payments, lending and wealth management business. It frees up resources for Baidu and helps it focus. For TPG's group, it's a big gamble on a laggard in a cutthroat industry facing tougher oversight.

Whitbread’s coffee spinoff is too slow

25 Apr 2018

The UK company is planning to hive off its Costa cafes less than two weeks after activist Elliott disclosed a 6 percent stake. That may lift the group’s undervalued shares and make the chain a bid target. But a 24-month timeline is too long for investors to wait for the takeaway.

Hyundai agitator gets overly ambitious

24 Apr 2018

U.S. hedge fund Elliott wants better governance from the South Korean auto conglomerate, $11 bln returned to investors and higher dividends. Fair enough. As for structural changes, though, limitations on financial subsidiaries mean Hyundai is less likely to alter course.

Ericsson rebirth as much made in China as Sweden

20 Apr 2018

The Swedish telecom-kit maker’s shares soared 15 pct after quicker-than-expected cost cuts. That adds credibility to boss Borje Ekholm’s previously unimpressive rescue effort. An even bigger boost could come from anti-Chinese sentiment harming rivals like Huawei and ZTE.

Samsung share sale heralds a humbler chaebol

12 Apr 2018

A unit of the South Korean conglomerate sold a $500 mln stake in an affiliate to comply with new rules. More deals like this could loosen heir Jay Y. Lee's grip on the Samsung group. Investors in the $300 bln Samsung Electronics can hope for better governance as a result.

Cerberus Alitalia carve-up would not fly with Rome

11 Apr 2018

The private equity firm is reported to be plotting a three-headed bid for the Italian airline. It would see easyJet take short-haul routes and Air France-KLM long ones, while Cerberus puts up the cash. But a breakup plan will not pass muster with a new nationalist government.

Swiss treasure helps AXA pay for XL folly

10 Apr 2018

The French insurer is restructuring its Swiss life insurance business, freeing up $2.6 bln of capital. The move provides some extra funding for its $15 bln takeover of Bermuda reinsurer XL. Reduced financial risk is welcome, but doesn’t help justify what remains a pricey deal.

Private equity’s retail fix risks landlord revolt

5 Apr 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Italian bank recap requires M&A faith

19 Feb 2018

Mid-sized lender Creval is raising 700 mln euros from shareholders to repair its balance sheet. Pruning bad loans will require even more capital, and projected returns are slim. The hope is that the cleaned-up bank will become a target once domestic consolidation kicks off.

Cox: Wall Street’s antisocial role in selling guns

15 Feb 2018

Lazard advised AR-15 maker Remington days before Wednesday’s school shooting, perpetrated with a similar rifle. Yet its asset managers talk about responsibility. So does the boss of BlackRock, the top owner of firearms shares. They could be helping reduce American carnage.

Ares tax switcheroo may attract few copycats

15 Feb 2018

The manager of $106 bln in alternative assets is going to pay U.S. corporate tax rather than elect for partnership treatment. That should boost its investment appeal – and, for Ares, the numbers add up. The likes of Blackstone, with lumpier earnings, probably have less to gain.

New-look Noble Group has a fighting chance

30 Jan 2018

A tentative deal with creditors would halve the Hong Kong commodity trader’s $3.4 bln of senior debt and give them 70 pct of the company. With a healthier capital structure, and fat incentive packages in place, it’s up to management to put years of dismal performance behind them.

Newell reaches limit of its brand rollup model

25 Jan 2018

Shares in the maker of Rubbermaid goods and Sharpie pens plunged 20 pct, wiping $3 bln off its value, after it said it would offload nearly a quarter of its businesses, some bought only recently. A tighter focus is overdue, but struggling retailers could make the cleanup harder.

Elliott finds another target for its power play

23 Jan 2018

FirstEnergy shares spiked after a $2.5 bln capital injection from the activist hedge fund and others. Elliott is reprising a ploy that made NRG the best performer in the S&P 500 last year. That deal had hiccups though, and the latest one will too. Shareholders should buckle up.

Anti-LBO activist could benefit Toshiba investors

12 Dec 2017

A hedge fund says the Japanese conglomerate need no longer divest its $18 bln memory unit after raising $5 bln in equity. It has a point: the deal was a fire sale. A quick halt is unlikely, but a U-turn would be possible and desirable if the transaction doesn’t close by March.

Wanda’s asset shuffle buys brief Beijing reprieve

5 Dec 2017

The indebted Chinese conglomerate is shuffling assets around, including a $470 million cash injection from its founder, as officials pressure firms to deleverage. The cash will help pay down $1.7 bln in offshore loans, but it will take more to escape the government penalty box.

Unilever buys more time for HQ beauty parade

28 Nov 2017

The Dove soap maker will postpone a decision on locating its head office in London or Rotterdam. It avoids becoming a lightning rod for discontented voters for now. Sitting on its hands also gives the UK government time to offer up goodies that match or beat Dutch perks.

Toshiba’s fresh funds provide for hard reboot

20 Nov 2017

The ailing Japanese group is raising $5.3 bln, or nearly half its market value again, by selling new stock. That ensures it avoids delisting. Buyers must see value in Toshiba’s residual interest in memory chips, plus the potential for turnaround elsewhere.

GE’s shaman exorcises ghosts of false expectations

13 Nov 2017

It doesn't take much imagination at work to grasp John Flannery's approach to the $178 bln conglomerate. He has halved the dividend, cut earnings guidance and questioned GE's portfolio of industrial assets. Next up is a total restructuring of GE's bloated, under-engaged board.

StanChart has yet to reward shareholders’ patience

1 Nov 2017

Resurgence is proving more difficult than recovery for the emerging market lender. Chief Executive Bill Winters has returned it to profitability, but is struggling to boost income faster than costs. Still-low returns make restarting meaningful dividends a distant prospect.