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Archived Since:June 19, 2011

Blog Post Archive

China insurer adds U.S. to overseas M&A splurge

Anbang has popped $1.6 bln Fidelity & Guaranty Life into its basket. In 12 months it has spent $4.4 bln on financial groups in South Korea, the Benelux and now America. The strategy is vague and funding opaque. For sellers, though, the Waldorf Astoria owner livens up any auction.

Aussie target Asciano could push for higher bid

The ports and rail group is now fielding competing, $6 bln-plus takeover proposals from Canada’s Brookfield and a break-up consortium led by local interloper Qube. The target’s board may want to see a clearer gulf in value before hitching itself to Qube’s wagon.

New York coal settlement could be climate canary

Peabody’s deal with state prosecutors over misleading atmospheric risks may inform a similar probe of Exxon. Though the lack of fines is a weak sign, the miner at least must share its assessment of possible climate rules. That could expose the danger of stranded energy assets.

Match’s IPO profile is alluring but with strings

The dating-sites owner pegs its worth as high as $3.6 bln. Much of that derives from Tinder, its fast-growing swipe-to-like app. The numbers make for an attractive and credible stock. It’s a risky proposal, though, and Barry Diller’s IAC looks like an overbearing chaperone.

Yahoo needs truth rather than report from McKinsey

The struggling internet site has hired the firm for advice on new opportunities. It’s unclear, though, what management consultants can do to arrest the company’s descent that a procession of CEOs hasn’t already tried. A blunt memo recommending a sale would make better reading.

New $23 bln woodland monster looks good on paper

Forestry giant Weyerhaeuser is paying a 14 pct premium for Plum Creek, a $7 bln timberland REIT. That’s modest but fair, given $100 mln of expected cost savings and a planned $2.5 bln stock buyback for both sets of owners. Weyerhaeuser’s long transformation looks near complete.

Portugal dangles between stasis and crisis

A group of left-wing parties could replace Portugal’s minority government after a key vote on Nov. 10. This communist-backed coalition could repeal reforms and make the country ineligible for ECB bond-buying. Or it may prove weak, in which case a damaging stalemate could follow.

Lonmin buys time but platinum is bigger problem

A $407 mln rights issue at an eye-popping 94 pct discount will allow the South African miner to postpone a day of reckoning with its creditors. Lonmin has bought itself a reprieve, but this won’t fix the platinum price, or help it avoid another strike at its Marikana mines.

Too-big-to-fail rules make banking less global

New guidelines will force lenders to hold big buffers of capital in their overseas arms. American and European banks can phase in their bail-in needs, and big Chinese groups no longer get off scot-free. Even so, the regulatory regime looks set to be another balkanising force.

Dixon: Brexit debate should start with trade

The chances of the UK voting to quit the European Union are high. The damage to business if it does leave would be high too. Trade ties, and the difficulty of replacing them from outside the EU, should be front and centre of the deb...

Modi chooses awkward time for UK rock star welcome

India’s prime minister will address a crowd of 60,000 at London’s Wembley Stadium this week. Courting the diaspora makes sense. But the rapturous welcome is out of tune with UK-India business ties and a big local election defeat at home, where Modi mania is definitely over.

China’s stock market marches to its own merry tune

Mainland stocks are up more than a fifth since the end of September. International investors are less bullish. Even after the summer’s harsh lessons, Chinese buyers still pay more attention to cheap cash and state support than slowing growth and weak corporate earnings.

Square’s down round offers cautionary unicorn tale

Jack Dorsey’s payments firm may go public for $3.5 bln, or 41 pct below its last private valuation. Rising competition, losing Starbucks’ business and deflating markets are only partly to blame. It’s a sign to well-funded upstarts that good ideas don’t always guarantee success.

Exxon investors may rue climate-risk indifference

The oil major’s shares barely budged on news New York is investigating whether the company misled owners about global warming. The probe adds legal teeth to the carbon-bubble debate and may spread to rivals. Shareholders seem more worried about oil prices. That looks shortsighted.

Valeant CEO gets called on $100 mln excess

Paying bosses in equity nudges them to serve shareholder interests. The pharma giant went to extremes, allowing chief Michael Pearson to borrow heavily against his shares. The tumbling stock forced him to repay the debt - an example of how skewed incentives have rocked Valeant.

Job data rarely work as gauge of economy’s health

U.S. employers did lots of hiring last month, but that means less than investors may think. Nonfarm payroll numbers are volatile, imprecise and prone to revision. They’re important mostly because traders, analysts and journalists give them outsized attention. A demotion is overdue.

Brazil dam disaster tests BHP’s mega-mining model

Investors ditched BHP Billiton shares after a jointly owned dam failed in Brazil. While mining is much safer than it used to be, such catastrophes are an inherent risk. A big balance sheet and diverse income streams mean it can absorb the financial consequences better than most.

Richemont shows luxury doesn’t run like clockwork

The Cartier owner reported a disappointing 3 percent increase in first-half sales. Hong Kong watch sales slumped. It’s tempting to look for economic trends, but the best explanation might just be that after a decade of runaway growth, luxury is returning to its old, faddish ways.

UK brokers take opposing bets on future of trading

ICAP may sell its voice-trading business and related bits to Tullett Prebon for stock, some of which would go to the seller’s shareholders. The mooted deal is messy. But it allows Tullett to double down on its core competence while ICAP can bet on an electronic future.

D-day nears for Tata Steel as Europe woes grow

The Indian steelmaker has written off another $1.3 billion at its ailing European division. Under pressure from cheap Chinese imports, the unit’s EBITDA has turned negative. Tata will need to make tough choices about the business it bought in 2007 sooner rather than later.

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