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Blog Post Archive

Japan retail deal gets M&A process back-to-front

Convenience stores FamilyMart and UNY have set a date for their $5.4 bln tie-up, but haven’t agreed key terms. It’s another sign of the complexities of dealmaking in a country where big domestic mergers are rare. No wonder investors are worried the union will destroy value.

Credit Suisse finds CEO industry fears – but needs

Tidjane Thiam, who will replace Brady Dougan in July, has no ties or loyalty to investment or private banking. And he has a reputation for making bold moves. It’s a combination that should send shivers not just through Credit Suisse, but the City and Wall Street, too.

Credit Suisse buys some insurance with Pru CEO

Hiring Tidjane Thiam to replace Brady Dougan should bring a fresh perspective to capital and cost conundrums. The former consultant may encounter skeptical dealmakers and regulators. Even so, his decision to leave the fast-growing UK insurer is a vote of confidence in banking.

Hugo Dixon: Greece has no good Plan Bs

Defaulting on its debts and quitting the euro would be a disaster. So would imposing capital controls, while defaulting and staying in the single currency. Athens has no rational course of action apart from working with its creditors to vigorously reform its economy.

Mall king’s $22 bln bid tests its hostile nature

A frustrated Simon Property unveiled a bear-hug offer to buy smaller rival Macerich. The top U.S. shopping center owner has used similar tactics many times before, with mixed results. The structure of the real estate industry tends to require aggression but it also can backfire.

Turkey’s central bank is in a very tough spot

Rate-setters are under pressure from President Erdogan to ease, despite a big trade deficit, high inflation and a weakening lira. The central bank is trying to square the circle, including by cutting forex deposit rates. It could all get much worse, if Erdogan pushes too hard.

Kaisa haircut is bad omen for China property debt

The troubled developer’s proposed restructuring leaves creditors facing lower interest rates and delayed repayments. A shrinking cash pile and the sudden appearance of $5.6 bln of previously hidden debt should alarm all investors in the sector. Kaisa may not be an isolated case.

Review: Money, theft and death in Putin’s Russia

Bill Browder's grandfather was an American communist. The grandson ran a hedge fund which profited during the chaos under Boris Yeltsin. But Browder did not reckon with the hard men of the Putin regime. His book offers some sobering lessons for investors in emerging markets.

UK retreat from RBS is more important than value

Chancellor George Osborne now wants to return the bank rapidly to private hands after May’s election. Both strategy and governance have been flawed. Britain is wary of starting to reduce its 79 pct stake at a loss. But that’s a price worth paying to put RBS on a stable footing.

Chinese FX intervention could be due a comeback

For over a decade a weak yuan brought in export revenues. Then a rising currency attracted investment. The falling exchange rate helps the former but puts the latter in jeopardy. In order to avoid a financial crisis, stronger is probably better, even it means more meddling.

AbbVie CEO may have overpaid again in $21 bln deal

Richard Gonzalez, the pharma firm’s boss, shelled out $1.6 bln last year to get out of a hard-won bid for Shire. Now he has come out on top in an intensely competitive biotech auction. AbbVie may get a blockbuster drug, but at a high cost: It must share profits with rival J&J.

Carlos Slim buys Spanish real estate on the cheap

The Mexican tycoon bought a 25 pct stake in property firm Realia at a discount and is eyeing a takeover. He is also the biggest shareholder of builder FCC, which in turn owns major stakes in Realia and Cementos Portland. Slim effectively controls all three. Minorities beware.

China’s lower growth target is missed opportunity

Premier Li Keqiang says GDP will grow about 7 pct this year. Though the lack of precision helps, the goal may still force the government into short-term stimulus or fudging the numbers. For all its progress, China is still not ready to scrap its big, reassuring objective.

Actavis sale dresses up barely investment grade

The acquisitive drugmaker attracted huge demand for $21 bln of bonds one notch above junk. They yield 1.75 percentage points over U.S. Treasuries, less than Verizon’s bigger, better-rated issue did in 2013. Buyers of top-tier debt can’t help but keep looking further downward.

Europe’s rebound poses new questions

Jobs, growth, morale: the Old Continent is perking up. Policymakers and investors need to adapt. The threat of deflation may recede. Central bank bond-buying may prove unnecessary. And established politicians could regain ground. Yet investors might still cling to bonds. tries Alibaba’s route to e-commerce profit

Transactions that match buyers with retailers on the Chinese group’s website grew 220 pct in the fourth quarter, far outstripping growth in direct sales. Acting as a middleman, like larger rival Alibaba, may offer better margins. Earnings are still absent, but look less elusive.

Trust Citi to win from losing most profitable unit

The U.S. mega-bank has at last offloaded OneMain to rival Springleaf for $4.25 bln. The subprime unit’s 6.7 pct return on assets far exceeds anything else at Citi. And yet the deal provides a one-off income boost, frees up capital, accesses tax breaks and removes a distraction.

Barclays’ trading woes offset pay restraint

The UK bank has cut investment bank bonuses by a quarter, atoning for a PR gaffe last year when pay rose despite a drop in profit. But 2014 results show returns in the unit are also lower. To maintain its turnaround, Barclays may have to shrink the misfiring division further

Alibaba’s split nationalities invite trouble

Taiwan wants to boot the e-commerce group out for not declaring itself Chinese. Yet Alibaba’s home changes depending on who asks. China’s taxman sees Hong Kong, licensing bodies see China, and investors see the Cayman Islands. The confusion may encourage regulatory meddling.

Tech drive strips old-school carmakers of clout

Apple is the latest to take an interest. From Tesla to Google, the shift to connected, self-driving vehicles may take a while, but it could shake up everything from systems to materials to car usage. The winners may be able to rev up returns far higher than current performance.

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