Breakingviews

Nutreco’s $3 bln buyout shows value of food chain

October 20, 2014

The Dutch fish and animal-feed giant is about to be gobbled up in a $3.4 bln friendly deal. The buyer is SHV, the family outfit behind the Makro cash-and-carry chain. With no synergies, this deal is better seen as a long-term bet on growing global demand for protein.

Snapchat’s valuation soars on tech-land pixie dust

August 27, 2014

The disappearing-photo business has turned 100 mln users, chat-service demand and the $20 mln sale of a tiny equity stake into a $10 bln price tag. Trouble is, the company lacks revenue – and none is in sight. It’s another example of technology dreams trumping real economics.

Food deal shows how investors eat up synergies

December 9, 2013

Sysco’s $3.5 bln purchase of US Foods received a rapturous reception with the buyer’s stock surging by as much as a quarter, or $5 bln. Hefty cost savings help the merger math. With this sort of reaction to deals, acquirers’ animal spirits won’t remain suppressed for long.

Disney magic hasn’t exactly worked on Pixar

August 5, 2013

“Monsters University” should enhance the company’s latest earnings, but a Breakingviews analysis suggests the animation studio’s value falls short of the $7.4 bln Disney boss Bob Iger paid in 2006. Pricey deals for Marvel and Lucasfilm may also disappoint investors over time.

Elon Musk has to sell 540,000 Teslas a year

June 3, 2013

That’s what a Breakingviews calculator shows may be needed for the electric automaker to be worth $43 bln by 2022, a target in the CEO’s 10-year incentive plan. That and other goals could bag him up to $1.8 bln. The hurdles are high. If Musk does it, he’ll deserve every penny.

Deal prospects make Vodafone look cheap

April 4, 2013

Speculation about the mega-mobile operator is rife. There’s talk of a U.S. exit, a takeover by partner Verizon, or a breakup bid. Optimistically, shareholders could get a third more value - or nearly 32 bln pounds. But getting there would entail huge deals, with headaches to match.

SolarCity IPO valuation approaches earth

December 12, 2012

The U.S. solar panel installer slashed its expected sale price by more than 40 pct at the last moment. The old price, some six times 2012 revenue, always looked starry-eyed - even with the involvement of Tesla guru Elon Musk. The new price merely requires optimism.

If Apple becomes Microsoft, investors should cheer

November 19, 2012

At least, that is, for their wallets. Middle age for tech stocks can hurt as growth shareholders lose interest and value-oriented owners await stability. But Apple has already made the transition. Even if its next decade echoes Microsoft’s last, the company is worth over $1 trln.

FT sale would defy today’s financial times

October 4, 2012

With the exit of the CEO of Pearson, the pink newspaper’s parent company, chances rise that the FT will change hands. But valuing it on standard industry metrics won’t reveal its worth to billionaires and media giants. The paper’s trophy status could make it a 1 bln pound asset.

Pandora’s income stream on congressional playlist

October 1, 2012

The online radio company is shackled by music royalties that lock up about half its revenue. Newly proposed U.S. legislation would cut those costs to as low as the 8 pct paid by rival Sirius XM. A Breakingviews calculator shows just how much value that would release for Pandora.