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from Counterparties:

Tax King

Burger King is moving to Canada. The American fast food chain is buying Tim Horton’s in an $11 billion cash-and-stock deal and will incorporate over the border. It’s an obvious tax inversion move. Or is it? According to Burger King’s CEO Daniel Schwartz, “We don’t expect there to be meaningful tax savings or a meaningful change in our tax rate.”

Or not. Matt Zeitlin reports that while that’s technically true today, “the company could reap significant tax savings if it continues to grow overseas.” The consensus is that this is definitely a tax inversion deal. Matt Levine says it’s an “immaculate inversion,” and writes, “the result is that Burger King will do an inversion where a majority of its U.S. shareholders won't owe taxes.”

However, one of the arguments against tax inversions is that they are economically unpatriotic (if there is one thing that characterizes companies, it’s patriotism over profits). But on this point, Timothy Noah writes that “Burger King is only nominally an American company now. It was bought in 2010 by 3G Capital, a Brazilian-owned private equity firm.”

The thing about this deal is it has surfaced debate about corporate taxation more broadly. In a strange pairing of interests, Dean Baker and Greg Mankiw make arguments for abolishing corporate taxes. Mankiw thinks we should replace the corporate tax (and some personal income taxes) with a “broad-based tax on consumption.” Baker says that high corporate taxes have just created a huge tax-avoidance industry and it’s worth abolishing the former to destroy the latter.

from Breakingviews:

Snapchat’s valuation soars on tech-land pixie dust

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own

Snapchat’s valuation is soaring on tech-land pixie dust. The disappearing-photo business has turned 100 million users, strong demand for chat services and the $20 million sale of a tiny equity stake into a $10 billion price tag. Trouble is, the company lacks revenue – and none is in sight. It’s a reminder that Silicon Valley dreams often trump real economics.

from Reuters FYI:

We can be heroes

A man dressed as Spider-Man breakdances while promoting the movie "Spider-Man 3" at a shopping district in Taipei. REUTERS/Claro Cortes IV

A man dressed as Spider-Man breakdances while promoting the movie "Spider-Man 3" at a shopping district in Taipei. REUTERS/Claro Cortes IV

Gallery: Just for one day...

Heroes walk among us - and Reuters presents its collection of the best caped crusader photography.

from Alan Baldwin:

Motorcycling-Record man Marquez crosses another bridge

LONDON, Aug 27 (Reuters) - Marc Marquez talks about fighting for his second successive MotoGP title as if there was some uncertainty about the outcome.

The fact he has won 10 out of 11 races so far, with his amazing run of success ending only this month in the Czech Republic, does not appear to have changed his thinking.

from Breakingviews:

Tragedy may reshape Brazil economy, not just vote

By Martin Hutchinson and Richard Beales

The authors are Breakingviews columnists. All opinions expressed are their own. 

Add Marina Silva to the challenges facing Dilma Rousseff. Brazil’s president faces a new opposition candidate in October’s election after Eduardo Campos’ death in a plane crash, and Silva looks a far bigger threat. If she ousts Rousseff, which polls show is possible, Brazil could gain economically from less state meddling.

from Breakingviews:

Tesco should cut its dividend

By Robert Cole

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Shareholders ultimately lose out when too-high payouts prevent companies from responding well to problems. Right now, Tesco needs all the financial flexibility it can muster. Its current dividend is dangerously constricting.

from The Great Debate:

As if things weren’t Badenov: Even in good times, Russians are villains in Hollywood

RTXHIDT.jpg

The fact that Moscow is behaving badly -- with President Vladimir Putin meddling in Ukraine’s presidential affairs last December, annexing Crimea in March and now, despite denials, likely supporting pro-Russian separatists in eastern Ukraine -- has validated Americans’ view of “evil” Soviets lurking in the new Russian empire. Even before Putin took back Crimea, more than 60 percent of Americans regarded Russia as a bad guy on the world stage.

Politics is largely to blame, but Hollywood may be the true villain in this drama. American culture never adapted to Moscow’s friendlier face. Though the Cold War was over, movie executives decided to ignore that memo. Russia may have been trying to leave behind its bad old days, but in the movies, Russians were still the bad guys.

from stephenaldred:

Carlyle in advanced talks to buy into Vanke’s China shopping malls -sources

HONG KONG, Aug 27 (Reuters) - Global private equity firm
Carlyle Group is in advanced talks with China Vanke Co
Ltd, the country's largest property developer, to buy
stakes in nine of its shopping malls, two people with direct
knowledge of the matter told Reuters.

One of the sources said the deal was valued at between 6 and
7 billion yuan ($976 million to $1.14 billion), while the other
said it could be worth up to 10 billion yuan. Both declined to
be named as details of the discussions were private.

from Full Focus:

Editor’s choice

Our top photos from the last 24 hours.

from Breakingviews:

Aggressive M&A puts focus on Thai tycoon’s empire

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Charoen Sirivadhanabhakdi’s appetite for deals has put his sprawling empire in focus. The Thai drinks-to-property tycoon is eyeing more acquisitions on top of the $3.3 billion his companies have spent this year. Investors have already given a poor reception to his most recent deals. A pick’n’mix approach to public markets may explain some of their doubts.

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