Jul 8, 2014 15:56 UTC

Supercharged IPO tax spoils need splitting

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By Robert Cyran

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

Initial public offerings that generate extra tax spoils are in the spotlight. KKR and Silver Lake are listing web hosting company GoDaddy, three years after buying it for $2.25 billion. The use of what’s called an “Up-C” structure means the company will float with big potential tax deductions on its books. In GoDaddy’s case, investors and sponsors will both benefit. But other IPOs with Up-Cs have seen more dubious arrangements.

Jul 7, 2014 20:22 UTC

Doubling down on First Data may be KKR’s best bet

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By Jeffrey Goldfarb and Richard Beales

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

Doubling down on First Data may have been KKR’s best bet. The extra cash just injected into the payment processor means the $29 billion acquisition has now absorbed over $10 billion of equity, one of the highest sums ever for a leveraged buyout. A Breakingviews analysis, however, suggests that a return finally beckons.

Jul 1, 2014 06:14 UTC

Private equity’s bad habit: Asian minority stakes

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By Una Galani

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

Private equity firms have developed a bad habit in Asia. They are investing record amounts in minority stakes in listed companies. Investors dislike such deals because they can buy the shares themselves. History also suggests that giving up control is fraught with risks.

COMMENT

With risk comes reward and as Asia continues to be a major engine of continued global economy growth, the PE investments may prove to be succintly sound.

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Jun 12, 2014 13:07 UTC

Harvard could get smarter about its endowment

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By Richard Beales

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

Harvard University could get smarter about its $33 billion endowment. Jane Mendillo, who has managed the Ivy League university’s portfolio for six years, is leaving at the end of 2014. Her predecessor is partly to blame for crisis losses, but Harvard nevertheless seems to have overpaid for mediocre returns.

Jun 3, 2014 16:31 UTC

Kellogg might make Heinz-style Buffett target

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By Kevin Allison

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

Kellogg looks like someone wants to eat it for breakfast. Takeover speculation has helped the U.S. company’s shares rise more than 8 percent since April, bestowing it with a $25 billion market value. Kellogg may be too big for a Hillshire-like takeover battle, and carries too much debt to make a traditional leveraged buyout palatable. But a deal like the one Warren Buffett and a group of Brazilian financiers struck for ketchup-maker Heinz last year might work.

May 30, 2014 14:46 UTC

Henry Kravis cultivates private equity perennials

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By Jeffrey Goldfarb

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

Henry Kravis is sowing the seeds of private equity perennials. U.S. buyout shops like his are selling companies to each other at a breakneck pace. It’s easy to be skeptical about these so-called secondaries. But KKR’s $1.6 billion acquisition of landscaper Brickman Group may turn out to be an example of how such deals can flourish.

Apr 28, 2014 19:23 UTC

Silicon Valley exceptionalism only travels so far

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By Jeffrey Goldfarb

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

Airbnb isn’t finding New York very hospitable. The room-sharing site squared off in court last week with Attorney General Eric Schneiderman over information he has subpoenaed about the many Airbnb customers his office suspects are breaking the Empire State’s laws. It’s a good example of what happens when tech entrepreneurs stray from their more accommodating Silicon Valley environs.

COMMENT

That sort of bluster won’t resonate much beyond the tech echo chamber. Airbnb’s ride-sharing cousin, Uber, is getting a cool reception in big cities like Miami, Berlin and Paris.
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Apr 17, 2014 20:44 UTC

Blackstone leaves a trail of money to follow

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By Jeffrey Goldfarb

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

Blackstone is leaving quite the trail of money to follow. The buyout firm led by Steve Schwarzman generated record earnings in the first quarter, in stark contrast to the slog happening on Wall Street. It’s the latest sign of a power shift from banks to shadow banks, broadly defined. Having confined big lenders, watchdogs could pick up the scent on Blackstone and its ilk.

Mar 28, 2014 18:20 UTC

Boards’ defender-in-chief keeps fighting last war

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By Reynolds Holding

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

Corporate boards’ defender-in-chief keeps fighting the last war. Lawyer Marty Lipton proved again at the New Orleans M&A confab that he can give as good as he gets. But prior panelists’ emphasis on improving governance and shareholder value made his swipes at activists seem dated. The legal lion’s roars are sounding more stubborn than persuasive.

Mar 24, 2014 04:42 UTC

Li Ka-shing de-risks with $6 bln Temasek sale

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By Una Galani

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

Li Ka-shing is de-risking. The Hong Kong tycoon has ditched plans to list his retail division AS Watson in favour of selling a 24.95 percent stake to Temasek for $5.7 billion. The deal crystallises a decent valuation for Li without the uncertainties of an initial public offering (IPO). For the Singaporean state fund, it’s a bold bet on consumer growth and private investments.