Breakingviews

Ackman gets closer to permanent capital grail

By Neil Unmack and Jeffrey Goldfarb
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Bill Ackman looks decidedly closer to the holy grail of permanent capital. The founder of activist U.S. hedge fund Pershing Square Capital Management is planning a London-listed vehicle with a market value of at least $4 billion. That would dwarf other public funds, many of which trade at a big discount to net asset value. Ackman’s scale, plus some fee sweeteners, may give him an edge. And his focus on easily priced bets could minimize the NAV problem.

The initial public offering of a new fund, which would invest in Pershing Square’s offshore hedge funds, next year is designed to let Ackman do more of what he does best. The bulk of his 22 percent annualized net return over the last eight years comes from successfully agitating at companies like JCPenney and Fortune Brands. By tapping the market, he wouldn’t need to keep half his assets in cash and other liquid investments, as he does now to accommodate investors who want to exit.

Twitter gives peace a chance in patent wars

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

All we are tweeting is give peace a chance. Twitter is going to allow its engineer-inventors to veto lawsuits against alleged infringers of patents they develop. That’s a model for curbing the kind of expensive legal salvos that Apple, Microsoft and others are lobbing just to slow each other down. If the rest of the technology world one day falls in line, innovation could benefit.

News Corp finds yet another way to annoy investors

By Richard Beales 

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

News Corp has found yet another way to annoy investors. The seemingly tardy discovery by Rupert Murdoch’s family empire that non-U.S. holders control 36 percent of its voting stock – breaching the 25 percent limit for owners of American television broadcasters – has led it to suspend half the voting rights of overseas owners. Even shareholders resigned to disenfranchisement have cause to worry.

Buffett at least learned one thing from Steve Jobs

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

Warren Buffett seems to have learned something from a fellow corporate titan. The 81-year-old investing icon disclosed on Tuesday he was diagnosed with early-stage prostate cancer last week and pledged to keep shareholders updated about his health. The candor is a refreshing contrast to the way in which Steve Jobs guarded details of the illness that eventually killed him. Unfortunately, Buffett is shrouding his succession plan in the same sort of mystery the Apple boss did.

Repsol nearly pricing in the worst

By Fiona Maharg-Bravo

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

How bad could it get for Repsol in Argentina? The Spanish oil and gas company has just had the bulk of its 57 percent stake in YPF expropriated by Buenos Aires. It’s far from clear whether Repsol will be properly compensated. Which way it goes could make big difference to its market value.

Goldman should relish being lost in crowd for now

By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions epxressed are his own.

For a firm like Goldman Sachs that is so used to standing out from the crowd, the prospect of being in the middle of the pack must grate beyond belief. But after a spate of governance and image problems, executives at the investment bank should relish its first-quarter results getting lost in the crowd.

Goldman managed an annualized return on equity of 12.2 percent. That’s bang in line with universal banking rivals JPMorgan and Wells Fargo – and with what Citi’s core business appears to have achieved. But its first quarter fell short of JPMorgan’s investment bank, which, after stripping out the accounting hit on its own debt, cranked out a 23 percent ROE.

Int’l Power does well to get better buyout from GDF

By Quentin Webb

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

International Power’s independent directors have done a decent job in securing a better buyout from GDF Suez. It’s not that easy to extract a big premium when a bidder is already a 70 percent shareholder. But the terms of the original tie-up helped, as did GDF’s evident keenness to take full control of the emerging-markets focused power generator.

Ducati could rip it up with VW

By Quentin Webb

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

Skoda cars and MAN trucks, meet your potential Volkswagen stablemates: 186-mph superbikes. No-one walks into a showroom after a cheap family car and screeches out on a blood-red Italian motorcycle. But Audi’s ambitions to buy Ducati would make some sense for VW’s luxury marque. And even with an appropriately macho price tag, the deal could pay off if Audi turbo-charges Ducati sales in emerging markets.

Repsol has to fight Argentina’s oily expropriation

By Fiona Maharg-Bravo and Kevin Allison
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Argentina’s leftist government is taking control of YPF, the oil and gas company 57 percent owned by Repsol of Spain. Worse, the state is nationalizing only Repsol’s shares. Stakes owned by Argentina’s Petersen Group, and other minorities, will escape the expropriation.

It’s not yet clear what price Argentina will pay for the shares, but given that a state tribunal will decide, it’s safe to assume Repsol will get a raw deal. Nor is this small beer for the Spanish company. YPF has accounted on average for 63 percent of Repsol’s oil and gas production since 2007 and has contributed nearly 30 percent of its group operating income, according to Société Générale estimates. What’s more, Repsol’s exposure to YPF is actually larger than it looks. Argentina’s Petersen group still owes Repsol $1.9 billion after it struck a deal to buy shares from the Spaniards. Petersen has relied on dividends from YPF to service the loan. Now Argentina may redirect these dividends into capital investment at YPF.

Qatar plays merger-maker at Glencore-Xstrata

By Una Galani

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

Qatar is playing merger-maker for Glencore-Xstrata. The Gulf state’s sovereign wealth fund has already proved it can act as a successful arbitrageur in M&A situations. It hasn’t revealed its intentions for the 5.5 percent stake in Xstrata built in the two months since Glencore agreed to merge with the Anglo-Swiss miner in a $90 billion deal. But the bold $2.7 billion investment could be another win.