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Jun 16, 2014
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Morgan Stanley email shame begs a tech solution

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By Jeffrey Goldfarb

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

Morgan Stanley’s email shame should bring Silicon Valley and Wall Street closer together. Messages sent by the bank’s head of M&A to Allergan look bad now that Morgan Stanley is working for hostile suitor Valeant Pharmaceuticals International. The episode suggests there’s a market for a corporate Snapchat.

Jun 16, 2014
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Medtronic-Covidien deal is marriage of convenience

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By Jeffrey Goldfarb and Robert Cyran

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The marriage of Medtronic and Covidien looks to be one of convenience. The $42.9 billion deal includes a premium that exceeds the estimated cost savings. Stents and sutures aren’t an obvious fit. And moving Medtronic’s headquarters from Minneapolis to Covidien’s Dublin base won’t obviously cut the U.S. company’s tax bill. Freeing up overseas cash is too shallow a reason to tie the knot.

Jun 7, 2014
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Future financiers condemned to repeat sins of past

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By Jeffrey Goldfarb

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

Future financiers are condemned to repeat the mistakes of the past. Nearly 150,000 wannabe investment advisers, bankers, risk managers and analysts around the world will sit for the CFA exam this weekend. Success hinges on their understanding of the capital asset pricing model and return on equity. Knowledge of disasters like the South Sea Bubble and the Great Crash, though, are not required. Widespread ignorance of financial history is an overlooked systemic risk.

Jun 5, 2014
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Gannett carve-up is just a matter of Time

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By Jeffrey Goldfarb

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

A Gannett breakup is really just a matter of Time. The $6.6 billion owner of USA Today and other newspapers isn’t getting much credit for its TV transformation. As Time Warner sets free its publishing arm this week, a Breakingviews analysis suggests Gannett should do the same.

May 30, 2014
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Clippers may actually be Ballmer’s least-bad deal

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

The Los Angeles Clippers may actually be Steve Ballmer’s least-bad deal. That’s not saying much given the former Microsoft chief executive’s acquisition track record. But television revenue means sports teams are no longer money pits. Even including the ego premium in the $2 billion price tag, buying the NBA franchise could work out better than aQuantive, Skype or Nokia.

May 30, 2014
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Henry Kravis cultivates private equity perennials

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By Jeffrey Goldfarb

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

Henry Kravis is sowing the seeds of private equity perennials. U.S. buyout shops like his are selling companies to each other at a breakneck pace. It’s easy to be skeptical about these so-called secondaries. But KKR’s $1.6 billion acquisition of landscaper Brickman Group may turn out to be an example of how such deals can flourish.

May 28, 2014
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Valeant’s sweetener comes off a little defensive

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

Valeant Pharmaceuticals International comes off oddly defensive in its latest advance on Allergan. A sweetened $49 billion bid for the Botox maker disappointed investors in both companies. The use of a messy financial instrument probably didn’t help, especially after the target pushed back hard on the deal math and compared its suitor to Tyco. Valeant has more work to do to reclaim the role of aggressor.

May 19, 2014
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AT&T puts shareholders on hold for DirecTV

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

AT&T is putting its shareholders on hold to buy DirecTV. Its $67 billion acquisition of the satellite TV operator announced on Sunday brings with it an unexpectedly robust $1.6 billion of cost savings. Even so, these don’t quite cover the cost of the premium. In any case, AT&T says it will use the money to roll out rural broadband service. Customers and regulators are getting the first call.

May 16, 2014
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Take hedge fund exuberance with grain of SALT

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

A wave of hedge fund exuberance should be taken with a grain of SALT. At SkyBridge Capital’s so-named Las Vegas confab this week, a near-unanimous confidence emerged amid moans about conference fatigue. Long-anticipated opportunities in M&A, bargains in Europe and collapsing correlations have finally arrived all at once, if some of the world’s richest investors are to be believed. The consensus itself may, however, give reason for pause.

May 14, 2014
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AT&T will struggle to justify $70 bln DirecTV bid

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

AT&T will struggle to justify buying DirecTV for an enterprise value of some $70 billion. Going headlong into the satellite television business requires some heroic assumptions to make the offer financially worthwhile. To cover its cost of capital, for example, AT&T probably would need to wring more than $2 billion of savings from its target. This deal gives off a whiff of desperation.