Apr 9, 2013 22:21 UTC

J.C. Penney exposes inefficiency valuing CEOs

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By Richard Beales

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

The debacle at J.C. Penney exposes a glaring inefficiency in how the market values corporate chieftains. When the struggling U.S. retailer hired Apple whiz Ron Johnson in 2012, the company’s equity value spiked by more than $1 billion. On Monday evening, news of his departure added $350 million. The return of ex-Chief Executive Mike Ullman – the man Johnson replaced – swiftly erased some $700 million. Such big swings make no sense.

COMMENT

A lack of products, focus, and brand image are serious weaknesses for any company. A CEO has to be flexible and willing to use test marketing strategies. Johnson was neither. I would suggest that the European firm Migros look at at Penney as an acquisitions candidate.

Posted by Psychologist | Report as abusive
Apr 9, 2013 22:18 UTC

Satellite IPO launches risk tolerance into orbit

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By Quentin Webb

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

Intelsat’s initial public offering could be a telling launch for stock markets. The owners want a full valuation despite the satellite operator’s slow growth and stratospheric debt. If investors are ready to buy, it suggests risk tolerance is heading sky-high.

Feb 22, 2013 20:55 UTC

Heinz deal suggests Big Food deserves a fresh look

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By Quentin Webb

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

After the Warren Buffett-backed takeover of Heinz, Big Food merits a fresh look. Makers of meals, sauces and spreads may offer better value than is immediately obvious.

Dec 24, 2012 17:15 UTC
Guest Contributor

A merger arb writes to Santa

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By Donder und Blitzen

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

After another thin and bumpy year for betting on M&A, one desperate European merger arbitrageur wrote to Santa. Breakingviews obtained a copy:

Dec 21, 2012 19:21 UTC

GE’s $4 bln swoop on Italian supplier is shrewd

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By Quentin Webb

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

General Electric’s swoop on a key supplier should stack up. The U.S. conglomerate is paying a reasonable-looking $4.3 billion for Avio, the Italian aerospace components maker. GE gets savings and more exposure to a civil-aviation market growing at full throttle. The seller, British buyout shop Cinven, gets a satisfactory exit after a bumpy ride.

Dec 18, 2012 18:23 UTC

Market signals turning point in U.S. gun debate

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By Robert Cyran

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

Private equity isn’t known for squeamishness – or for dumping promising investments. So it’s significant that Cerberus Capital Management is selling its stake in Freedom Group, the largest U.S. firearms maker, following the Newtown school atrocity last week. Gunmakers’ shares are plunging, too: big money is betting on tougher restrictions.

May 11, 2012 16:13 UTC

Private equity bubble hangover yields HR headache

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By Quentin Webb

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

Private equity’s bubble hangover has brought staffing headaches – and Terra Firma is suffering acutely. Guy Hands, the boss of the British buyout firm, is dipping into his own pocket to fund 20 million pounds of bonuses for employees over the next two years. The largesse is a necessary step to keep staff through an otherwise lean period. But Hands has made life particularly tricky for himself.

Mar 28, 2012 21:17 UTC

Dodger blue outshines gold after $2 bln deal

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By Christopher Swann and Martin Hutchinson
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The $2 billion deal for the Los Angeles Dodgers is a home run for sports owners everywhere. The near five-fold rise in the value of the West Coast baseball team since it last changed hands in 2004 underlines a surge in the value of top sports franchises. Only gold comes close to keeping pace as an investment. Rising television revenue is bringing in more cash. But it’s the swelling ranks of the ultra-rich in search of trophy investments that’s stoking prices.

These new owners usually stem from the ranks of high finance. Last year, Apollo co-founder Joshua Harris bought basketball’s 76ers in Philadelphia while Tom Gores and his buyout firm Platinum Equity snapped up the Detroit Pistons. And only last month, hedge fund manager Steven Cohen bought a 4 percent slug of the Mets.

Mar 6, 2012 12:00 UTC

Apax finds French twist on bankruptcy tourism

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By Neil Unmack

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

Restructuring specialists have a lot to thank the UK for. The country’s creditor-friendly legal framework has drawn companies from across Europe to restructure in London. European Union law states that companies should use the insolvency regime relevant to their centre of main interest, or “comi” for short. But the concept is elastic; a Greek mobile telecoms company, Wind Hellas, was able to restructure in London by relocating one of its companies from Luxembourg to the UK.

Mar 1, 2012 22:16 UTC

Top hedgies show Wall Street how it’s done

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By Richard Beales

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

For bankers, the cash is greener on the other side of Wall Street. The top 40 hedge fund managers took home $13.2 billion between them for 2011, Forbes estimates. Yet even industry godfathers like Ray Dalio of Bridgewater Associates manage to attract far less opprobrium than bank bosses, whose paychecks are considerably smaller.