Feb 19, 2014 19:41 UTC

Candy Crush destined to be a heartbreaker

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

Candy Crush is destined to be a heartbreaker. The addictive mobile app’s Europe-based maker, King Digital Entertainment, is ready to capitalize on the hype with an initial public offering in the United States. With top hit “Candy Crush Saga” generating about 80 percent of revenue, though, investor infatuation would be a dangerous game.

Feb 19, 2014 19:26 UTC

Diamond dealers show how to make M&A sparkle

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

 

Leave it to a couple of diamond dealers to show how to make M&A sparkle. Jewelry retailer Signet’s stock shone brighter after it agreed to buy smaller rival Zale at a 41 percent premium for $1.4 billion. That’s what happens when the cost savings effectively cover the purchase price. It makes the tarnish on shareholder-unfriendly transactions involving Comcast and Jos. A. Bank all the more noticeable.

Feb 19, 2014 05:23 UTC

Fear and loathing in China’s trust industry

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By John Foley

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

China’s trust sector is the financial system’s enfant terrible. It’s a 10.9 trillion yuan ($1.8 trillion) industry built on taking short-term funding and channeling it into longer-term investments. That mismatch has already led some trust products to unravel, and more will follow. What causes concern isn’t so much trusts failing as them being foolishly rescued.

Feb 18, 2014 20:07 UTC

Actavis makes pharma deals look generic

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

 

Actavis makes pharmaceutical deals look generic. Its $25 billion acquisition of Forest Laboratories follows a familiar formula in the sector. Uppity investor? Check. Low-tax jurisdiction? Check. Buyer’s stock rises? Check. And over $8 billion of value created means financiers will keep busy with their own prescriptions for M&A success.

Feb 18, 2014 07:26 UTC

China copper IPO seeks gold in financial recycling

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By Una Galani

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

Financial recycling is putting a gold polish on the initial public offering of a Chinese copper company. Just 15 months after it quit the New York Stock Exchange, China Metal Resources Utilization is set to go public in Hong Kong at 10 times its last market value. It’s the first of a large group of unloved stocks to perform the “Chinese flip”, exploiting the valuation gap between U.S. and Hong Kong exchanges.

Feb 17, 2014 14:55 UTC

Vivendi’s SFR is top target for French cable king

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By Quentin Webb

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

France’s cable king promised investors a slew of deals when he floated Altice, his investment vehicle. The biggest and best would be Vivendi’s mobile operator SFR.

Feb 14, 2014 19:39 UTC

Jos. A. Bank’s daft deal knits owners in a bind

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

Jos. A. Bank’s daft deal is knitting its shareholders in a bind. To avoid being acquired, or perhaps to fetch a higher price from rival Men’s Wearhouse, the suits retailer is issuing stock to buy Eddie Bauer at $56 a share, only to buy more back at $65. If the $875 million transaction isn’t unraveled, investors will find themselves painfully stitched up.

Feb 14, 2014 16:26 UTC

America’s dumb elites risk fomenting a revolution

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

Why do so many of America’s wealthy elite seem hell-bent to foment a revolution? After all, the world’s plutocrats agreed at their annual confab in Davos last month that the big tail risk for Western economies is social unrest, spurred by rising financial inequality. The tail becomes fatter when One Percenters like AOL boss Tim Armstrong, realty mogul Sam Zell and venture capitalist Tom Perkins go pick fights with the little guy.

COMMENT

It’s fascinating how some senior executives (not all) become so disconnected with reality. Over decades of experience in corporate America I learned that the best executives listen to subordinate managers. They encourage dissent, so long as thoughtful, meaningful solutions are put forward. The best exec’s often skip over their direct reports and communicate directly with staff farther down the corporate ladder. They foster a culture of openness. The best exec’s possess at minimum some sense of humility, they understand that they live in isolation and are usually receiving filtered information from subordinates. They strive to minimize that isolation, even though that means getting out of their comfort zone.

Generalized comments like Sam Zell’s “The 1% work harder” show an arrogance and ignorance that seems to have grown over the past 20 years or so. Certainly some of the wealthy do work harder, but I’d argue that many do not. Comments like Sam’s are just silly.

Sam’s problem is that none of his friends or subordinates are apparently willing to challenge his bigotry and arrogance. They probably can’t, he’d fire them. When you see a powerful person put their foot in their mouth that’s usually the problem. He may be wealthy but he is to be pitied. In spite of the people around him he’s really terribly alone in the world.

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Feb 14, 2014 04:53 UTC

From soccer pitch, lessons on Chinese tycoon risks

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By Una Galani

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

Chinese investors are setting their sights on trophy assets in the West, and soccer teams look like fair game. The case of English football club Birmingham City, whose main shareholder and former president just sold a stake to an obscure Chinese company, offers a cautionary tale. Big personalities make risky shareholders, but China brings extra anxieties.

Feb 13, 2014 20:17 UTC

Comcast deal machine spits out a value destroyer

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

 

Comcast’s deal machine has spit out a value destroyer. Digesting Time Warner Cable is ambitious even for a serial acquirer like Chief Executive Brian Roberts. As with some of his many previous purchases, it looks set to generate a return on investment below Comcast’s cost of capital. That’s crummy but not criminal. It’s also not surprising given the medieval governance the Roberts family uses to oversee its fiefdom.

COMMENT

So Comcast isn’t a monopoly, Time-Warner isn’t a monopoly and the resulting behemoth wouldn’t be a monopoly either.

Thank you US anti-trust “guidelines”, always looking out for the consumer.

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