Time Warner Cable’s deal risk goes down to wire

February 20, 2015

A $45 bln sale to larger rival Comcast hangs in regulatory balance. Time Warner Cable’s stock price implies a 40 pct chance of collapse. A Breakingviews calculator shows how longer odds of success might hurt investors. The lack of a break fee would add insult to injury.

Tesco’s new chairman is logically logistical

February 18, 2015

Investors may be a little disappointed to see John Allan heading up Britain’s largest retailer. Asda’s Archie Norman would have been a bigger name. But Allan is a decent choice: his logistics experience will be very useful for the grocer and his financial credentials are sound.

Fresh flames rise from Sealy’s ever-burning bed

February 17, 2015

Uppity investor H Partners, alleging serial underperformance and stale private equity directors, wants Tempur Sealy’s CEO fired and a seat on the board. The company and the mattress industry have a torturous financial history. It probably means where there’s smoke, there’s fire.

Michele Ferrero leaves $25 bln-plus Nutella empire

February 16, 2015

The confectioner has died at 89. Blessed with a gift for creating and marketing treats, he built Italy’s biggest fortune from hazelnut spread, Kinder Eggs and Tic Tacs. Stock markets and deals were both anathema. Rivals will hope his heirs eventually tire of independence.

Costco customers look like winners in Amex scrum

By Rob Cox
February 13, 2015

Severing an exclusive deal with the U.S. warehouse retailer has swiped some $8 bln from the card company’s shareholders. Gains at MasterCard and Visa offset only part of that. True to form, Costco shoppers will reap the remaining benefits – at least according to Mr. Market.

Expedia indicates first-class M&A tickets remain

February 12, 2015

The online travel company’s shares jumped after it agreed to buy smaller rival Orbitz for $1.6 bln. Advertised synergies worth $525 mln today amount to twice the premium being paid. Despite evidence of fewer easy pickings, Expedia shows why the deal boom still has some runway.

Yahoo’s Alibaba spinoff attracts big discount

February 12, 2015

The company’s plan to distribute its stake in the Chinese company hasn’t excited investors. A Breakingviews calculator suggests they are attaching a 34 pct discount to the U.S. tech firm’s Alibaba shares – assuming Yahoo’s core business is worth something. That’s too cautious.

A fat and happy GM is a dangerous company

By Rob Cox
February 12, 2015

It’s an irony bordering on conflict of interest that Harry Wilson, who helped Uncle Sam convert debt to equity in bankruptcy, is pressing the carmaker to reduce its cash cushion. Yet absent externally imposed fiscal discipline, GM runs the risk of repeating mistakes of the past.

Drugmakers unlikely candidates for next big short

February 11, 2015

Kyle Bass, a hedge fund manager who bet successfully on a U.S. housing crash, is targeting pharma companies worth $450 bln. A new method of challenging patents gives him a tool. But it’s not clear how his firm, Hayman Capital, has a leg up on existing, aggressive generic firms.

Today’s Wall Street can’t produce a John Whitehead

February 9, 2015

The ex-Goldman Sachs boss, who died at 92, was instrumental in creating the global investment bank that exists today. He also took on prominent public service roles after leaving. Actions by both Wall Street and Washington have closed that path to high finance’s current leaders.