Breakingviews
Dollar store bid battle leaves value on the table
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Dollar store mergers, it turns out, don’t come cheap. Dollar General – call it General – on Monday joined the fight for rival U.S. discount retailer Family Dollar with a $9.7 billion cash offer. That topped an earlier agreed acquisition of Family by the smaller Dollar Tree, which as wags have noted could result in a combination called Family Tree. Even above General’s $78.50 a share bid, though, both of Family’s suitors have room to lob in a few more singles.
Coke investment reveals half-empty idea bottle
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Coca-Cola’s latest investment reveals its idea bottle to be half empty. The $180 billion soda giant is paying $2.2 billion for 17 percent of Monster Beverage, a maker of trendy energy drinks. It goes to show how even a global powerhouse with significant distribution and marketing advantages can struggle to keep ahead of upstart rivals. At least Coke got the deal formula right.
Venezuela digs way to distressed seller status
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Venezuela is digging its way to distressed seller status. The country wants to offload Citgo, its U.S. refinery and pipelines unit. It may be worth up to $15 billion, money that’s sorely needed thanks to President Nicolas Maduro’s barmy economic policies. And the drop in value of heavy-oil assets like Citgo owns makes it a bad time to sell.
Aussie bid battle questions wine’s standalone case
By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Wine may age better in the cellar than on the stock market. A bid battle for Australia’s Treasury Wine Estates – the only big listed producer – has called into question the case for standalone wine companies. The maker of Penfolds could be better-managed but a fragmented market and low brand loyalty also suggests the fruit of the vine may not be suitable for public company treatment.
Aircraft leasing flies back into vogue in Asia
By Peter Thal Larsen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Aircraft leasing is flying back into vogue in Asia. Many Western groups jettisoned the business of buying and renting out planes after the financial crisis. Now China’s sovereign wealth fund and tycoon Li Ka-shing are considering climbing on board. Strong forecast demand for aircraft explains the appeal – as long as finance is cheap and reliable.
Kinder Morgan’s large-number solution: get bigger
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Richard Kinder’s master class in financial engineering is back in session. The Kinder Morgan boss struck $71 billion of deals to unite his sprawling U.S. pipeline empire. Various partnerships had reached a scale that was limiting returns. Kinder somehow managed to solve this size quandary by getting bigger.
Behold the unversion: an inversion in all but name
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Behold the unversion. U.S.-based data protection firm SafeNet may very well be able to slash its tax rate as part of a cross-border deal. Instead of doing so by acquiring an overseas company – a move known as an inversion – it is selling itself for $890 million to Dutch digital security outfit Gemalto. The deal shows the limitations of a possible U.S. government ban on inversions.
Private equity discord is best collusion defense
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Even when it might help them, private equity firms can’t seem to cooperate. Blackstone Group, KKR and TPG are now willing to pay a combined $325 million to resolve allegations that they colluded to limit prices on deals. Three other firms previously settled for less. Carlyle Group is still holding out. Legally speaking, there’s safety in numbers. Yet the buyout shops can’t even agree on how to resolve the case.
Walgreen encounters uncommon inversion boundary
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Walgreen has encountered a limit to inversion logic. The drugstore chain will keep flying the American flag even after agreeing to buy the rest of Swiss-based Alliance Boots for about $15 billion. A backlash against corporate emigration may have affected Walgreen’s decision, but harder numbers probably mattered more.
Murdoch miscalculation points to Time Warner value
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Rupert Murdoch miscalculated. The sly old fox of global media abruptly yanked his $80 billion offer to buy rival Time Warner on Tuesday after failing to anticipate his quarry’s resolve and the price demands of investors. Twenty-First Century Fox shares rallied after the market had officially closed while Time Warner’s retreated toward their pre-bid level. That means refusenik boss Jeff Bewkes has something more to prove.
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