Jeffrey's Feed
Oct 6, 2011
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Del Monte settlement quantifies cost of conflicts

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

Wall Street just got a bill for its conflicts of interest problem — and Barclays is picking up the tab. The UK bank will surrender a big slug of the fees it earned in the $5.3 billion buyout of Del Monte as part of a legal settlement with the food company’s shareholders. M&A practitioners seem to have read the writing on the wall after a Delaware judge earlier condemned the practice of advising a seller while also financing the buyer. But when banks get spanked on the bottom line, the message resonates louder and clearer.

Sep 27, 2011
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P&G’s Pringles partner warrants careful taste test

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

What could be wrong with combining chips and nuts? Maybe a few things, in the case of Procter & Gamble’s complex $2.4 billion deal to offload its Pringles chips brand to snack purveyor Diamond Foods. As part of the tax-efficient transaction, the consumer giant wants investors to swap some of their stock for shares in Diamond. This might seem like a no-brainer given Diamond’s recent sparkle. Its share price has climbed more than fourfold since it went public in 2005, compared with the modest 12 percent gain for P&G over the same span.

Sep 19, 2011
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Wall Street’s merger math

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

The numbers just aren’t adding up on Wall Street. To support the M&A ambitions of their clients, investment bankers routinely claim the sum of a deal will be greater than its parts. Yet in the three years or so since JPMorgan, Bank of America and Barclays bought Bear Stearns, Merrill Lynch and the U.S. arm of Lehman Brothers, respectively, each has shed, not gained, market share. These results undermine Wall Street’s deal math.

Sep 17, 2011

Masters of synergies create few for themselves

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

By Jeffrey Goldfarb

NEW YORK (Reuters Breakingviews) – The numbers just aren’t adding up on Wall Street. To support the M&A ambitions of their clients, investment bankers routinely claim the sum of a deal will be greater than its parts.

Sep 6, 2011
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Rubenstein won’t easily snatch Schwarzman’s crown

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

It won’t be easy for David Rubenstein to snatch Steve Schwarzman’s private equity crown. Rubenstein’s firm, Carlyle Group, manages about $150 billion of assets, roughly the same as Blackstone. But Carlyle reaps considerably less of the steady fee income that comforts investors. That means its valuation when it goes public is likely to wind up well short of Blackstone’s.

Sep 1, 2011

U.S. bank boss ouster undermines cult of CEO

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

By Jeffrey Goldfarb

NEW YORK (Reuters Breakingviews) – Surprise changes at the top of a company don’t typically go down well in the market. Even worse are ones accompanied by mealy-mouthed excuses. Yet following the unexpected ouster of Bank of New York Mellon boss Robert Kelly, the bank became about $1 billion more valuable. So much for the cult of the chief executive.

Aug 25, 2011
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Bloomberg LP spares no expense on first big deal

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

Bloomberg LP is sparing no expense for its first big deal. New York Mayor Michael Bloomberg’s financial information company — a rival to Thomson Reuters, the parent company of Breakingviews — agreed to buy niche publisher BNA for about $1 billion cash. At 36 times last year’s earnings, no public company could reasonably compete. But the price reflects Bloomberg’s ardor to expand its influence and build a cushion against Wall Street.

Aug 18, 2011
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Upstart M&A boutiques earn place at fee table

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

Upstart M&A boutiques are eating from Wall Street’s table. Two newish shops – Blair Effron’s Centerview and Frank Quattrone’s Qatalyst — helped Motorola Mobility strike a deal to sell itself to Google for $12.5 billion earlier this week. Along with two other firms opened over the last five years by Ken Moelis and Joseph Perella, this quartet is gnawing at the fee pool of big investment banks.

Aug 5, 2011
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Redstone can delight in only so much Murdochfreude

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

NEW YORK — Sumner Redstone should enjoy watching his arch-rival Rupert Murdoch squirm. There’s no love lost between the 88-year-old chairman of Viacom and CBS and the News Corp boss. Last year, Redstone even presciently ridiculed his 80-year old competitor’s fondness for newspapers. But as Murdoch grapples with the scrutiny brought about by the misdeeds of one of his UK tabloids, Redstone can delight in only so much Murdochfreude. He has plenty of costly governance problems of his own.

Jul 13, 2011
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The Murdoch discount

By Jeffrey Goldfarb and Richard Beales
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Rupert Murdoch’s political influence may be surpassed by his impact on the value of News Corp. The stock routinely trades more cheaply than media rivals largely because the company is
run at Murdoch’s whim. A Breakingviews calculator shows how big the Murdoch discount has become as a result of the scandal at the News of the World tabloid.

The phone-hacking affair not only forced News Corp to shutter its most widely read newspaper but also has finally forced the company to withdraw a $14 billion plan to buy the rest of the British pay-TV operator BSkyB. The damage could extend to the company’s American and Australian businesses. U.S. Senator Jay Rockefeller, for instance, has called on Congress to open an investigation that would accompany those under way in Britain.