Apr 8, 2014 15:42 UTC

Trendy new buyout clubs may let down eager patrons

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

Trendy new buyout clubs may disappoint their eager would-be patrons. Blackstone Group is enlisting some of its fund investors to help buy auto-parts maker Gates for $5.4 billion. Such collectives are increasingly displacing teams of private equity firms in bigger deals. Returns from so-called co-investing, though, could make it a passing fad.

Apr 7, 2014 18:55 UTC

Grubby assets shine in $5.6 bln tax arbitrage deal

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

Grubby assets are being given a shine in a $5.6 billion tax arbitrage deal. Mallinckrodt, a specialty drugs company, is paying a 27 percent premium for Questcor, a rival barraged by regulatory inquiries. Why do it? The transaction moves profits to Ireland, where the acquirer is domiciled for tax purposes. It may be buying as many problems as taxman savings, however.

Apr 7, 2014 16:05 UTC

Ranbaxy sale shows risk in Japanese M&A adventures

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By Peter Thal Larsen

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

Daiichi Sankyo has just reminded corporate Japan of the dangers of overseas adventures. The drugmaker is handing control of its ailing Indian affiliate Ranbaxy to local rival Sun Pharmaceutical in a $3.2 billion deal. The investment has lost almost 40 percent of its value in six years.

Apr 7, 2014 14:02 UTC

A field guide to shareholder-friendly activism

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

The rise of shareholder activism has made it harder to distinguish between different species. Many corporate agitators say they are acting for all investors. Billionaire Carl Icahn’s online mission statement, for instance, touts “a platform from which we can unite and fight for our rights as shareholders and steer towards the goal of real corporate democracy.” Whether that’s true depends largely on the goals and methods used. Breakingviews provides a field guide to the activist animal kingdom.

Apr 4, 2014 17:02 UTC

Anadarko’s $5.1 bln settlement adds up in market

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

Stock investors seem to have a firm grip on Anadarko Petroleum’s toxic waste settlement. The record $5.15 billion settlement on Thursday, covering years of environmental claims, was at the low end of a court-defined range which had a midpoint of $9.8 billion. The 15 percent jump in the oil company’s market capitalization is mostly explained by those numbers. And it brings Anadarko’s 12-month stock performance nearly back in line with the S&P 500 after a bumpy ride.

Apr 4, 2014 13:57 UTC

Carlyle descends into a public-private inferno

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

A Carlyle Group investment in Montana lays bare why so many roads are paved only with good intentions. The mayor of Missoula, a city of about 70,000 once known as Hellgate Trading Post, is trying to seize the local water utility from the buyout firm. The confrontation shows why joint efforts between public and private entities to improve infrastructure don’t proliferate.

COMMENT

I think it is important to make it clear just why Carlyle, not the local government, is in the better position to own and operate the water utility. Unlike the local government, Carlyle with both the personal wealth of its managers and its institutional investors at stake, has a powerful incentive to operate the utility efficiently and increase its value to make a profit when it is sold. The fact that this is the business of Carlyle puts an added pressure on firm — its future business is at stake if the firm’s reputation for increasing the value of assets is tarnished.
Nothing like these incentives are at work when a government owns and operates a business, which is a leading reason why “our” infrastructure is in the shape it’s in. The role of government is generally to regulate private operations—not be put in a conflicted position of regulating itself.
David Haarmeyer

Posted by haarmeyer | Report as abusive
Apr 4, 2014 05:43 UTC

China stock market opening is opposite of Big Bang

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By Peter Thal Larsen

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

China’s approach to opening up its stock market is the opposite of a Big Bang. Investors are once again getting excited about the prospect of mainland shareholders being allowed to buy Hong Kong stocks. But such hopes have proved premature before. As with any loosening of China’s capital controls, progress is bound to be gradual.

Apr 3, 2014 16:22 UTC

Blythe Masters could chair Glencore

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

Blythe Masters’ exit from JPMorgan with the sale of its physical commodities business could solve Glencore’s longstanding search for a chairman. The brains behind the credit default swap has the expertise to join the trading house’s board, whose all-male roll makes it an anachronism in the FTSE-100. But there is one big obstacle to her leading this or any board – she has never run a company before.

Apr 2, 2014 17:29 UTC

Virtu IPO blocked by high-frequency trading cloud

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

It’s a good thing Virtu Financial doesn’t really need to go public. The “technology-enabled market maker” is delaying its initial public offering, according to news reports. While Virtu may be different, too much of what it does sounds similar to the high-frequency trading that’s suddenly in the spotlight.

Apr 1, 2014 22:00 UTC

High-speed traders just latest market rent-seekers

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

High-speed traders are just the latest to earn opprobrium as market rent-seekers. In his new book “Flash Boys,” Michael Lewis claims they are rigging U.S. equity markets. Even Goldman Sachs Chief Operating Officer Gary Cohn acknowledges concerns. New rules, taxes or structures could reduce the high-frequency traders’ unfair advantages.