Cable M&A wave washes over the Caribbean

November 6, 2014

Cable & Wireless Communications is buying Barbados-based Columbus Intl for $3 bln with debt. As with many European cable deals, the high price must be offset with cost savings and growth. CWC shares dived. That’s not all down to a big share placing in a smallish stock.

Carlyle buys a shovel-maker for deal gold rush

November 5, 2014

The private equity firm is teaming up with publisher Euromoney for a $700 mln buyout of Dealogic, the financial data provider. With IPOs, debt issuance and M&A soaring, the acquisition will be a 2014 test of an old adage: in most booms it pays to sell the necessary tools.

Alibaba delivers chunky growth, but at a cost

November 4, 2014

The Chinese e-commerce giant pulled off a 54 pct revenue increase for the second quarter, its first results since listing in New York. But earnings slipped, only in part because of big IPO payouts to staff. Alibaba also says it targets sales, not margins. That’s not reassuring.

Music rally can shake off discordant Taylor Swift

November 3, 2014

The 24-year-old pop star yanked her latest album and catalog from Spotify. The digital streaming service and its ilk offer low per-song royalties but subscriptions give labels higher margins than CDs or downloads. Buyer habits are also changing, even if Swift is stuck in 1989.

LabCorp deal tests positive for value destruction

November 3, 2014

The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.

Macau’s casinos worryingly reliant on high-rollers

November 3, 2014

A drop in big spenders could push Macau gambling revenue to its first annual drop on record. Forecasts for next year still seem too optimistic. If VIP gamblers shrink in number, the likes of Galaxy Entertainment and Wynn Macau would be especially hard hit.

Deutsche Bank’s fixed income wager yet to pay off

October 29, 2014

The German group hasn’t yet paid all the high legal costs of past sins or satisfied future regulations. But its biggest bet is that investment banks are in a merely cyclical, not a structural, decline. Despite solid third quarter trading revenue, the case is far from proven.

Sky-high valuations no match for earnings reality

October 28, 2014

Investors knocked more than 10 pct, or well over $3 bln, off Twitter’s worth despite sales doubling. Blame the company’s overdone value multiples. Similar knocks to Amazon, Netflix, Pandora, Chipotle and Yelp show the danger when quarterly numbers can’t match a bullish story.

Chiquita inversion slips on cash appeal

October 27, 2014

The banana company’s shareholders voted down a stock deal to acquire Irish produce distributor Fyffes, a decision that now points to a sale to Brazilian buyers. Ailing arbs, a crackdown on tax-driven M&A and economic ructions didn’t help. The path of least uncertainty wins again.

Missed stock connection hurts China’s reform drive

October 27, 2014

Regulators have delayed a flagship scheme to connect the Hong Kong and Shanghai exchanges. Protests, market jitters and tax issues may have been factors. The problem is that investors are in the dark. The uncertainty damages confidence in the plan, and in other Chinese reforms.