Merck bets $8.4 bln on more profitable antibiotics

December 8, 2014

For years, big pharma has left new work on bug control to small biotechs. But the mood is changing. Rising – and alarming – resistance to existing drugs and government incentives to develop new ones are injecting allure into companies like Cubist, Merck’s target.

Uber flips the bird at critics with convertible

December 5, 2014

The taxi app’s valuation soared to $40 bln in its latest funding round. But a plan to issue securities that convert to stock at a discount to an IPO shows how firmly Travis Kalanick remains in the driver’s seat. Uber can raise money at a potentially massive premium.

Cramer’s mad money: fair game for fellow blowhard

December 4, 2014

Acerbic activist Carlo Cannell wants the CNBC stockpicker and founder of TheStreet to sell his company or take a big pay cut and quit TV. Selling the online tipsheet firm may be wishful thinking. But Cramer’s take, at 14 pct of revenue, is as crazy as the name of his cable show.

Sinking rouble puts debt squeeze on Russia Inc

December 3, 2014

Most of Russia’s external debt is owed by the country’s banks and corporates. About $138 bln comes due in the next eighteen months. With the currency down 40 percent against the dollar this year, that will put a major strain on enterprises’ cashflows. Expect the state to step in.

E.ON’s “bad power” spinoff promises little upside

December 1, 2014

Germany’s largest utility is exiting conventional generation, bundling unwanted risk into a new company to be handed to shareholders. E.ON can concentrate on distribution and clean electricity. Both managements will benefit from focus. Still, the new entity’s prospects are bleak.

Market too bearish on European oil services

November 28, 2014

Petrofac has fared especially badly, falling 30 pct in a week. Sub-$75 oil is rattling explorers’ and producers’ nerves. As projects are shelved, oil service companies are being hurt. Share ratings reflect the pain and much depends on oil prices. But some stocks now look cheap.

SABMiller’s Coca-Cola push is Africa buy signal

November 27, 2014

The UK brewer and the U.S. drinks giant are merging assets in southern and eastern Africa to create a soft-drinks bottler with $3 bln of sales. SAB gets control and gains market access. The move points to the continent’s strategic potential, and similar consolidation could follow.

Private equity shows signs of pre-crisis brio

November 25, 2014

Canada’s Onex has bought Swiss packager SIG for up to $4.7 bln in a secondary buyout. It’s one of Europe’s biggest LBOs in five years and deploys pre-crisis levels of leverage. Private equity restlessness and a shortage of big targets created the conditions for a landmark deal.

BT is in strong position for mobile M&A

November 24, 2014

The fixed-line telco has shaken up UK communications by pushing into TV and now mobile. The reward is that BT has a choice of two mobile networks to buy, O2 or EE, and few likely counter-bidders. A 10 bln stg deal would help lift sales and protect BT’s broadband business.

Pru’s lesson for investors: trust animal spirits

November 21, 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.