Services

Czech tycoon gets a red-letter day, second class

16 May 2024

Daniel Kretinsky hiked his offer for the owner of Royal Mail to $4.4 bln. The board is minded to accept, even though International Distributions Services may be worth more. Yet IDS shares trade far below the bid, suggesting the UK government may find a way to block the deal.

Bank mess hands tricky start to top Indian IT boss

13 Apr 2023

There’s no honeymoon for K Krithivasan, the incoming CEO at $145 bln Tata Consultancy. Like other outsourcers, it has struggled to retain workers. Now staff are squeezed by soaring rents in the country’s Silicon Valley. Cost pressures are rising just as US clients hit the brakes.

Just Eat Takeaway’s best U.S. call is late dropoff

21 Jan 2022

The food delivery group paid $7.3 bln for Grubhub last year, but investors now attach little value to its American business. CEO Jitse Groen could sell it or spin it off, but only by recognising a big loss. Waiting for the unit’s prospects to improve might be a better plan.

It’s time to quit Japanese staffing giant Recruit

12 Sep 2019

Local companies are selling a combined 7%, but substantial cross-holdings remain an overhang. Worse, a market valuation of $50 bln relies on strong growth in HR tech, including its job review site Glassdoor, even as economic signs weaken. Justifying that will become harder work.

Frere family’s private push is double-edged sword

10 Jul 2019

GBL, the holding company of Belgium’s Frere and Canada’s Desmarais families, may buy part of a 2.4 bln euro call-centre operator from KKR. CEO Ian Gallienne’s shift into unlisted assets could boost returns. But thin disclosure means his shares will suffer from a steeper discount.

KKR’s $3 bln rail float helps to clear IPO line

21 Jun 2019

UK website Trainline priced near the top of its range and popped 20% after listing in London. Its rapid growth and positive cash flow make an alluring combo, but investors also looked past risks including shifting UK rail policy. That bodes well for fellow IPO travellers.

Lowball Nordic IT sale gives Apax a better exit

18 Jun 2019

The buyout firm accepted a lowly 1.3 bln euro cash-and-shares offer for Norwegian computer services firm Evry from Finnish rival Tieto. The measly 15% premium is less than half the value created by cost savings. Still, a 20% stake in the combined group should be easier to sell.

Babcock right to reject Serco’s cheeky merger plan

17 Jun 2019

The 2.5 bln pound UK defence contractor rebuffed the outsourcer in January. Serco is smaller, has lower margins and provides less-skilled services. The combination would also be over-reliant on British military. Though consolidation makes sense, the financial logic must stack up.

UK rail IPO comes with noisy fellow travellers

22 May 2019

KKR may float travel-booking company Trainline, used by Brits to book coach and train tickets, for $2 billion. It’s a rare IPO that is growing quickly and generating cash. The problem is that Trainline is pulling into the station soon after a few high-profile UK tech flops.

Saga is a wake-up call for UK insurers

4 Apr 2019

Shares in the company that focuses on baby boomers fell 38 percent after it issued a profit warning and cut its dividend. Data protection laws and the UK financial watchdog’s keener focus on prices that are causing problems for its insurance business will also hurt rivals.

The Exchange: Hollowing out white-collar jobs

13 Feb 2019

In “The Globotics Upheaval” Richard Baldwin predicts machine learning and instant communications will disrupt service workers just as automation and offshoring upended Western factories. He tells Breakingviews what’s coming, and what we can do to slow it down.

Wirecard shows fintech stars share banking ills

4 Feb 2019

The payments group denied an FT report alleging false accounting. Yet shares are down 25 pct since last week. Soothing investors will mean bulking up in compliance and boosting transparency. They’re the kind of problems associated with rickety banks, not disruptors.

UK audit reform leaves unfinished business

18 Dec 2018

Britain wants companies to use two auditors and stricter Chinese walls between consulting and book-keeping. The moves should help competition, but they won’t be as effective as radical options like breaking up groups and market-share caps, nor prevent failures like Carillion.

UK outsourcer debt plan tests private sector model

10 Dec 2018

Interserve is in talks to clean up its balance sheet. While banks may agree to write off a chunk of its nearly 615 mln pounds of debt, costly delays and botched projects remain. The biggest challenge will be convincing creditors and the government it can deliver public services.

IWG’s safest option is to avoid short-term fix

6 Nov 2018

A strong third quarter has lifted shares in office provider IWG, a rival to WeWork. CEO Mark Dixon could provide an even bigger boost by selling Spaces, his company’s trendier offering. However, he would then be saddled with an old-school business with a valuation to match.

Novartis contact lens spinoff defies messy optics

29 Jun 2018

Separating its Alcon eyecare division is an admission of failure for the Swiss pharma group, which spent $52 bln on the unit seven years ago. Though the listing won’t unlock much value, it should help Alcon’s recovery, and let new boss Vasant Narasimhan focus on making drugs.

Adyen’s $17 bln pop flags bipolar IPO market

13 Jun 2018

The Dutch payments group’s shares doubled on its market debut, defying a recent trend for flops like publisher Springer Nature. It shows investors are putting a premium on companies that promise growth. The risk is that, as with Adyen, they end up giving away most of the upside.

Dutch $8 bln payments IPO banks fat growth premium

5 Jun 2018

Amsterdam-based Adyen is listing shares at a higher multiple than peers. That’s arguably justified by booming sales and racy customers like Netflix and Facebook. But card groups like Visa and tech giants are vying for a slice of the payments pie, likely hurting intermediaries.

Royal Mail puts absurd twist on golden handshake

17 May 2018

The UK postal service’s 5.8 mln pound payment to new CEO Rico Back is a familiar way to get a chosen candidate to jump ship. Yet Back already works for a Royal Mail subsidiary. It adds a layer of farce to so-called “buyouts” that have hit investor pockets and board reputations.

Saint-Gobain and Sika build happy truce

11 May 2018

A takeover battle dating back to 2014 is resolved. The French company ends up more than 600 mln euros better off after buying a stake of Sika and then selling a chunk back. Its former Swiss target pays a relatively low premium for freedom. Shame peace took so long to break out.