Rakuten’s $1bln U.S. buy stretches loyalty logic

September 10, 2014

Buying U.S. cash-back site Ebates will more than double overseas transaction volumes at Japan’s largest e-commerce firm. It underscores Rakuten’s plan to use its loyalty scheme to distinguish itself from rivals. Yet, as with past deals, it’s unclear how the parts fit together.

General Mills may smother pricey organic target

September 9, 2014

The $33 bln maker of Cheerios is paying $820 mln, a 37 pct premium, for “natural” mac-n-cheese purveyor Annie’s. But big companies often squash growth when they swallow small targets whole. Coca-Cola’s recent stakes in Monster and Green Mountain may offer a better template.

Vivendi boosts shareholder credentials in GVT sale

August 28, 2014

The French media group says it favors Telefonica’s $10 bln bid for its Brazilian mobile unit. Telefonica could pay more, but it’s good that Vivendi has chosen the surest exit for shareholders. As for rival bidder Telecom Italia, it now faces an uncertain future.

Telefonica may have to inch higher for GVT

August 28, 2014

The Spanish telecom group has given Vivendi a soft deadline to accept a new 7.5 bln euro cash-and-stock offer for Brazilian subsidiary GVT. Telecom Italia’s bid is only 7 bln euros, has less cash and is more conditional. Still, Vivendi could yet wring more out of this auction.

Buffett and tax outrage both diversions in BK deal

August 26, 2014

The Sage of Omaha is lending Burger King money, at a lucrative 9 percent, but his imprint tells stock investors nothing. And contrary to social media hysteria, a new parent company in Canada isn’t going to fleece the U.S. taxman. The $11 bln purchase of Tim Hortons is just an LBO.

Burger King tax flip merger logic doesn’t stack up

August 26, 2014

The $9.6 bln burger chain’s investors cheered its talks to buy Canadian doughnut shop Tim Hortons and move its headquarters across the border. There’s little obvious tax arbitrage, and Burger King isn’t larded with foreign cash. Inversion alone can’t justify the market’s appetite.

Why can Burger King, but not Wendy’s, own Hortons?

August 26, 2014

In 2005, Bill Ackman, now BK’s No. 2 shareholder, pressured rival Wendy’s to spin off the Canadian doughnut chain - arguing it was undervalued, the synergies “minimal” and management insufficiently incentivized. Funny how a robust dose of financial engineering changes minds.

Roche’s $8 bln bet outsmarts ice-bucket challenge

August 25, 2014

Dumping cold water on heads, the social-media phenomenon now boosting ALS research, is a great way to raise charitable cash. But the drug made by Roche’s target, InterMune, treats a disease with more sufferers. The market may be the more efficient way to direct funds.

Dynegy’s $6.25 bln grab marks return of ambition

By Christopher Swann
August 22, 2014

The U.S. power company once tried to buy Enron and eventually went bust after a spat with activist Carl Icahn. Two years out of bankruptcy, Dynegy is roughly doubling its business with two deals. They look sensible, but the lesson from the past is to avoid getting carried away.

China Mobile’s foreign foray risks meagre returns

August 21, 2014

The dominant Chinese operator is using its $73 bln cash pile to hunt for growth overseas. The strategy has failed to create value for other telcos. Expansion may help to push Chinese technology, but rival governments may be wary about allowing China Mobile to take control.