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Jan 17, 2013

Breakingviews-AT&T should beware a value trap across the pond

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

By Quentin Webb

LONDON, Jan 17 (Reuters Breakingviews) – AT&T (T.N: Quote, Profile, Research) should
beware a value trap across the Atlantic. Some top brass at the
U.S. telecoms giant see a “unique opening” to buy a sizeable
European counterpart, the Wall Street Journal reported. With
valuations at their current low and debt finance dirt-cheap,
running numbers makes sense. But cross-border tie-ups offer
limited cost savings. Besides, European operators are cheap only
because markets are tough. The Dallas predator would need to
spot some serious hidden value for such a deal to make sense.

Jan 14, 2013
via Breakingviews

Europe brings the pain for UPS and TNT

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By Quentin Webb

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

Acquisitive companies beware: Joaquin Almunia is not always interested in the bigger picture. The European competition commissioner has nixed his second transatlantic mega-merger in a year, signalling he would block TNT’s 5.2 billion euro takeover by U.S. rival UPS. He had consigned the Deutsche Boerse – NYSE deal to the scrapheap in February, 2012. Both times, the companies argued fruitlessly that they were subject to wider competitive forces than those considered in the commission’s analysis, which defined the markets in question rather narrowly. Both times, the EU competition czar failed to be impressed.

Jan 10, 2013

ArcelorMittal strikes while market is hot

By Quentin Webb

LONDON (Reuters Breakingviews) – ArcelorMittal (ISPA.AS: Quote, Profile, Research), the world’s biggest steelmaker, is tackling debts by selling $3.5 billion of new shares and convertible bonds. This is easier than a rights issue and the company sensibly waited for warmer market sentiment before jumping in. But the latest capital call will once again eat into the stake of the controlling Mittal family.

At first, and somewhat paradoxically, a fall to “junk” status last year seemed to remove the need for a capital-raising at the indebted metals giant. With no investment-grade rating to defend, the logic went, the pressure to shore up the balance sheet lessened. In reality, it seems Chairman and Chief Executive Lakshmi Mittal, and son Aditya Mittal, the chief financial officer, were merely wearing their best poker faces.

Dec 27, 2012
via Breakingviews

Penguin in bondage hides real risks in media M&A

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By Quentin Webb

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

Three deals from 2012 will reshape the book, music and film industries in 2013: Penguin’s merger with Random House, Universal’s $1.9 billion purchase of EMI’s recorded-music business, and Walt Disney’s $4.1 billion takeover of Lucasfilm. There are sound business reasons for all three. There are also reasons for artists and consumers to fret.

Dec 21, 2012
via Breakingviews

GE’s $4 bln swoop on Italian supplier is shrewd

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By Quentin Webb

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

General Electric’s swoop on a key supplier should stack up. The U.S. conglomerate is paying a reasonable-looking $4.3 billion for Avio, the Italian aerospace components maker. GE gets savings and more exposure to a civil-aviation market growing at full throttle. The seller, British buyout shop Cinven, gets a satisfactory exit after a bumpy ride.

Dec 12, 2012
via Breakingviews

Diageo’s M&A machine misfires with Jose Cuervo

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By Quentin Webb

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

The sun is setting on Diageo’s ambitions to be a big shot in tequila. A generous reading is that Diageo remains disciplined about deals. But letting Jose Cuervo go is a meaningful setback in the group’s largest market.

Dec 10, 2012
via Breakingviews

How could HP find a $5bln gap in Autonomy’s value?

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By Quentin Webb

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

How could Hewlett-Packard find a $5 billion-plus hole in an $11.1 billion deal? The U.S. tech giant claims to have uncovered all kinds of accounting nasties at Autonomy, the British software outfit it bought last year. But HP won’t say quite how the allegations – strongly denied by Autonomy’s ex-boss Mike Lynch – could produce such a colossal writedown. Breakingviews tries a spot of reverse-engineering to see how it could be possible.

Dec 7, 2012

Bond in driving seat in Aston Martin investment

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

By Quentin Webb

LONDON (Reuters Breakingviews) – Aston Martin is getting a welcome boost from a 150 million pound capital injection. The cash from Investindustrial, the buyout shop that turned round Ducati, should lift research and growth at James Bond’s favourite carmaker. But perhaps appropriately, Aston Martin’s bondholders seem the biggest immediate winners.

Nov 30, 2012
via Breakingviews

Review: How a maverick CEO exposed a scandal at Olympus

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By Quentin Webb

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

Society and markets need whistle-blowers. But it’s hard, lonely work. Michael Woodford’s “Exposure” details first-hand how the maverick executive blew the whistle on a $1.7 billion accounting scandal at Olympus, the company he ran. His integrity makes him a welcome outlier in an age of financial scandal.

Nov 23, 2012
via Breakingviews

HP’s accounts bombshell: a guide for the perplexed

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

Hewlett-Packard claims it was duped into hugely overpaying for Autonomy, prompting an $8.8 billion writedown. It blames at least $5 billion directly on dodgy book-keeping. Autonomy founder Mike Lynch says his company played by the rules. But complicated procedures for categorising sales and recognising revenue are critical to the strength of HP’s three central allegations.
Sales mix

    • About Quentin

      "Quentin Webb is a Reuters Breakingviews columnist, covering mergers and acquisitions, corporate finance and private equity. He is based in London. Before becoming a columnist, he was a news reporter for Reuters, where he was most recently European M&A correspondent. He has also worked as a correspondent in Brussels and as a credit-markets reporter. He joined Reuters in 2003 from Legalease, a legal publisher. He has a first-class degree in psychology from University College London."
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