Apr 24, 2014 13:52 UTC

GE/Alstom deal rumours test French reform drive

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By Pierre Briançon

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

In an ideal world where free people would roam across free markets, there would be much to like in a takeover of engineering group Alstom by General Electric. The French turbine and train maker, bailed out by taxpayer money 10 years ago, has been hit hard by the economic slump and Asian competition. Its future as a standalone company is in doubt. It needs cash that its shareholders – including Bouygues, with a 29 percent stake – are loath to fork out. Being folded into much larger GE would help it through bad times while some of its assets would fit nicely into the U.S. group.

Apr 24, 2014 06:25 UTC

China’s state firm shakeup gets it only half right

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By John Foley 

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

Private shareholders could bring discipline to China’s 150,000 or so state owned enterprises. There’s no question the companies, which generate a return on assets about half that of private sector rivals, need the help. Recent shake-ups at CITIC Group and Sinopec have set the ball rolling. But for real efficiency, SOEs need to pay market rates for debt as well as equity.

Apr 23, 2014 22:06 UTC

Buffett loses his voice – and maybe some sway

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By Jeffrey Goldfarb

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

Warren Buffett lost his voice and maybe some sway along with it. The Omaha billionaire said on Wednesday he didn’t vote against Coca-Cola’s controversial equity pay plan, even though he disagreed with it. Buffett explained that he feared his opposition might be misinterpreted as a lack of support for Chief Executive Muhtar Kent. That’s an odd message to convey to his legions of investment acolytes. It doesn’t, however, mean Coke shouldn’t hear what its largest owner is saying.

COMMENT

Mr. Buffett did the right thing. 83% of votes approved of the plan and he chose not to use his outsized ownership to sway the decision of the majority. The times they are a changing. Thanks Mr. Buffett.

Posted by njglea | Report as abusive
Apr 23, 2014 13:40 UTC

Coca-Cola deserves protest vote one way or another

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

Coca-Cola is set to face bubbling discontent at its annual shareholder meeting on Wednesday. Several shareholders, led by Wintergreen Advisers, object to the $180 billion drinks giant’s equity pay plan. Some, including pension funds from Ontario and Florida, want the chairman and chief executive jobs split. Nearly a quarter voted against top executives’ compensation last year. With the stock underperforming, it’s no wonder investors are grouchy.

Apr 23, 2014 05:49 UTC

WH Group’s chopped IPO still looks unappetising

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By Una Galani

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

WH Group’s chopped initial public offering still looks unappetising. The Chinese pork producer is slashing the size of its Hong Kong fundraising to as little as $1.3 billion, down from a previous target of at least $3 billion. But WH Group’s reluctance to accept a lower price means the IPO remains a tough sell.

Apr 22, 2014 18:27 UTC

Valeant can boost its $47 bln bid for Allergan

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

Valeant Pharmaceuticals has plenty of room to boost its bid for Allergan. The acquisition machine, working with hedge fund manager Bill Ackman, thinks it can cut at least $2.7 billion of costs from the Botox maker. At Valeant’s single-digit tax rate, that’s worth nearly $25 billion. And the potential benefits go on from there. The $47 billion deal, based on Monday’s closing price for Valeant stock, would still add up with a much bigger premium.

Apr 22, 2014 13:05 UTC

Dawn raid makes comeback via activist drone strike

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By Robert Cyran and Richard Beales
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Remember the dawn raid, when a would-be acquirer built up a stake before the target realized it was under attack? Activist investor Bill Ackman has come up with a kind of drone strike version. His Pershing Square Capital Management hedge fund and Valeant Pharmaceuticals have teamed up to grab a potential 9.7 percent stake in Allergan, with a hostile takeover by Valeant ready for deployment.

Apr 22, 2014 06:52 UTC

Graft purges don’t hurt shareholders – insiders do

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By John Foley 

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

China Resources chairman Song Lin has been sacked for disciplinary violations, leaving an empire with $150 billion in assets leaderless. Though China’s state-company bosses will quake in their loafers, the damage to investors looks manageable. The real problem is a wider culture that treats outside shareholders as an afterthought.

Apr 21, 2014 18:27 UTC

Barrick’s empire building deserves skeptical eye

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

Barrick Gold’s interest in a $33 billion merger with rival Newmont Mining deserves a skeptical eye. The world’s top gold miner by ounces produced is keen on a deal with the industry No. 2, according to news reports. Barrick’s outgoing founder and chairman, Peter Munk, admitted to “hubris” in past deals. Ex-Goldman Sachs banker John Thornton, who takes over next month, faces a considerable challenge convincing shareholders this won’t be another value-destroyer.

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.