Icahn takes $150 mln of activism to political realm

October 22, 2015

The investor wants to help U.S. companies bring back $2 trln of overseas cash in return for a reduced tax that will fund infrastructure. A massive so-called super PAC will back like-minded candidates in 2016 elections. The idea makes sense, but a longer-term fix would be better.

Yahoo’s Alibaba spinoff troubles may outlast boss

September 29, 2015

Marissa Mayer plans to complete the internet firm’s separation from the Chinese e-commerce company. Resolving tax issues may take years, though, if authorities challenge the deal. With Yahoo’s business stagnant and competition rising, the CEO may be gone before wrangling ends.

Chiquita inversion slips on cash appeal

October 27, 2014

The banana company’s shareholders voted down a stock deal to acquire Irish produce distributor Fyffes, a decision that now points to a sale to Brazilian buyers. Ailing arbs, a crackdown on tax-driven M&A and economic ructions didn’t help. The path of least uncertainty wins again.

Tax clampdown could deter half-baked pharma M&A

September 23, 2014

The U.S. attack on companies relocating to avoid taxes will calm pharma’s M&A binge. Deals like AbbVie’s purchase of Shire may survive on strategic logic. Pure tax-driven combinations, like Mylan/Abbott, look tricky. That lessens AstraZeneca’s vulnerability to a bid from Pfizer.

Buffett and tax outrage both diversions in BK deal

August 26, 2014

The Sage of Omaha is lending Burger King money, at a lucrative 9 percent, but his imprint tells stock investors nothing. And contrary to social media hysteria, a new parent company in Canada isn’t going to fleece the U.S. taxman. The $11 bln purchase of Tim Hortons is just an LBO.

Burger King tax flip merger logic doesn’t stack up

August 26, 2014

The $9.6 bln burger chain’s investors cheered its talks to buy Canadian doughnut shop Tim Hortons and move its headquarters across the border. There’s little obvious tax arbitrage, and Burger King isn’t larded with foreign cash. Inversion alone can’t justify the market’s appetite.

Why can Burger King, but not Wendy’s, own Hortons?

August 26, 2014

In 2005, Bill Ackman, now BK’s No. 2 shareholder, pressured rival Wendy’s to spin off the Canadian doughnut chain - arguing it was undervalued, the synergies “minimal” and management insufficiently incentivized. Funny how a robust dose of financial engineering changes minds.

REITs and MLPs make tax inversions a diversion

By Christopher Swann
July 31, 2014

U.S. authorities are letting Windstream call its telecom cables real estate, qualifying them for tax breaks. And a partnership will shield Hess assets from the IRS. Politicians, though, are indignant over firms that move overseas – even when home-grown tax loopholes are costlier.

Inversions start to spin out of control

July 30, 2014

A quest for tax savings has made digestible overseas targets attractive to U.S. buyers. Hospira’s potential $5 bln deal for a Danone unit highlights a fresh supply, for so-called “spinversions.” The odd combination also reflects the perverse incentives distorting corporate decisions.

Supercharged IPO tax spoils need splitting

July 8, 2014

KKR and Silver Lake are listing web hosting outfit GoDaddy. The use of what’s called an “Up-C” structure means the company will float with big tax deductions. IPO investors and existing owners will both benefit, but other IPOs with Up-Cs have seen more dubious arrangements.