Dec 23, 2013 18:26 UTC

Beware old tech seeking fountain of youth

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By Robert Cyran

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

Beware of old tech seeking the fountain of youth. Hardware makers including Cisco, IBM and Hewlett-Packard – with a combined two centuries of life among them – are increasingly falling prey to natural selection in Silicon Valley. They’re devouring smaller, newer firms to keep pace, but weaknesses are getting harder to hide. That could lead to bigger, desperate deals for richly valued business software and big data companies.

COMMENT

I see the problem as those behemoths are trying to slow technology to match their speed. But no matter what, they can’t keep up. They often buy a smaller company not to exploit the technology, but to squash it. Also they think they are going to get he techies from that new purchase too. But that often fails to work as they leave for other smaller companies, not wanting the bureaucracy of the large corps that really want them to do …. nothing. Big corporations can not innovate. They must buy it. They are simple “Me Too” organizations. Apple is making it because it is almost entirely selling to the public at large. The other behemoths mentioned are trying to sell to businesses that are plain just not buying.

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Dec 20, 2013 15:35 UTC

M&A potential will succumb to laws of physics

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

The laws of physics are apt to work against an upturn in mergers and acquisitions. The investor love being heaped on acquirers should be a catalyst for takeovers amid plentiful cash and credit. The pendulum could also swing to correct other market anomalies. Yet opposing pressures still exist and chief executives and boards have settled into a cautious mindset. Inertia is about as powerful a force there is.

Dec 18, 2013 22:15 UTC

Can General Electric keep the activists at bay?

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By Rob Cox

The author is a Reuters Breakingviews columnist. The opini0ns expressed are his own.

Can General Electric keep activist investors at bay? If the gates at Apple, Microsoft and Procter & Gamble can be rattled, complacency just isn’t an option for any company, even and maybe especially a $270 billion conglomerate. While GE’s broad strategy looks more coherent than ever, the Connecticut giant still has two potential vulnerabilities: its finance arm and its longtime leader Jeffrey Immelt.

Dec 16, 2013 19:42 UTC

Silver Lake takes a second juicy bite of Avago

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By Robert Cyran
The author is a Reuters Breakingviwes columnist. The opinions expressed are his own.

Silver Lake is taking a second juicy bite of Avago Technologies. The U.S. private equity firm just about quintupled its money on the initial carve-out of the chip company from HP. Now it’s back, underwriting Avago’s $6.6 billion purchase of rival LSI. The market’s warm embrace of the deal means Silver Lake’s $1 billion convertible loan is already in the money.

Dec 12, 2013 19:16 UTC

Ziggo has ways to put pressure on Liberty

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

Ziggo has opened the door to John Malone’s Liberty Global. A few weeks after rebuffing an approach, the Dutch cable group has confirmed takeover talks with its larger rival. Any deal would be both big and logical, since it and Liberty’s UPC unit dominate the local market. Now Ziggo has conceded a willingness to sell to its dominant shareholder, the task is to get full value from a weak position.

Dec 11, 2013 06:43 UTC

Private equity taps happy hour at Oriental Brewery

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By Una Galani

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

Oriental Brewery may produce a happy hour for its private equity investors. Belgium’s Anheuser-Busch InBev has started discussions over buying back the South Korean brewer, which it sold to Kohlberg Kravis Roberts in 2009 for $1.8 billion. A back-of-the-beer mat calculation suggests that would earn OB’s private equity backers a 34 percent annualized return.

Dec 10, 2013 20:34 UTC

Time Warner Cable could play a little Pac-Man

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By Jeffrey Goldfarb

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

Time Warner Cable could play a little Pac-Man. Being acquired by smaller rival Charter Communications, a plan that has been doing the rounds, would create a highly indebted cable giant with an enterprise value of over $100 billion.

Dec 9, 2013 20:19 UTC

Food deal shows how investors eat up synergies

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By Robert Cyran
The author is a Reuters Breakignviews columnist. The opinions expressed are his own.

Sysco’s acquisition of US Foods shows how investors are eating up synergies. The $3.5 billion purchase, revealed on Monday, received a rapturous reception, with the buyer’s market valuation surging by as much as a quarter – or $5 billion – before giving up some gains. Hefty cost cuts help the merger math.

Nov 29, 2013 18:26 UTC

Pearson makes a tidy turn in the merger market

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

Pearson has made a tidy turn in the merger market. The British publisher, now mainly focused on education, is selling Mergermarket to private equity firm BC Partners for substantially more than it paid for the financial news and data outfit in 2006.

Nov 28, 2013 08:08 UTC

Giant Interactive’s $2.9 bln buyout hard to resist

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By Una Galani

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

Giant Interactive’s $2.9 billion buyout is hard to resist. Chairman Shi Yuzhu is leading a consortium with Baring Private Equity Asia to take the U.S-listed Chinese computer gaming group private. At almost 13 times this year’s earnings, the group’s offer to buy the 53 percent that it doesn’t already own is a chunky premium to peers. Besides, independent investors have few alternatives.