After paying a record dividend on the back of soaring iron ore, Mike Henry is boldly remaking the $178 bln miner. He’s selling oil and gas, charging into potash and collapsing the dual-listed structure. Even with fresh questions on capital use, a valuation uplift looks warranted.

The 15 bln euro delivery company made a smaller-than-expected loss in the first half. It’s still battling a tough U.S. market and needs to step up investment in Europe. A cheap valuation and restive shareholders would make it hard for CEO Jitse Groen to fend off an offer.

After paying a record dividend on the back of soaring iron ore, Mike Henry is boldly remaking the $178 bln miner. He’s selling oil and gas, charging into potash and collapsing the dual-listed structure. Even with fresh questions on capital use, a valuation uplift looks warranted.

The 15 bln euro delivery company made a smaller-than-expected loss in the first half. It’s still battling a tough U.S. market and needs to step up investment in Europe. A cheap valuation and restive shareholders would make it hard for CEO Jitse Groen to fend off an offer.

HONG KONG, Aug 17 (Reuters Breakingviews) - A leadership shakeup at China’s troubled Evergrande (3333.HK) empire weakens its already-shaky foundations. Founder Hui Ka Yan has unexpectedly stepped down as chairman of the Hengda Real Estate unit, the crown jewel which contributes to most of the listed parent’s revenue. The company claims the change was “normal” and the result of Hengda’s failure to secure a Shenzhen listing.

Investors are unconvinced it’s business as usual at the group, which is on the hook for over $46 billion in short term loans. Evergrande Property Services (6666.HK), where Hui’s sucessor is also general manager, tanked 9%, while other units declined by lesser degrees. Yields on one yuan-denominated Evergrande bond blasted up to 190%.

Chinese companies are often subject to “key-man risk” because authority is traditionally concentrated in the hands of the founder, who owns all the business relationships. If Hui is bailing out himself, that could...

HONG KONG, Aug 17 (Reuters Breakingviews) - Tim Hortons China is preparing a strong brew. The division of the Canadian coffee and donuts chain, a joint venture between Restaurant Brands International (QSR.TO) and private equity firm Cartesian Capital, has agreed to merge with special purpose acquisition company Silver Crest Acquisition (SLCR.O) in a deal valuing its enterprise at nearly $1.7 billion. The Sequoia- and Tencent-backed (0700.HK) seller of breakfast wraps and Iced Capps is banking on rising coffee consumption in the People’s Republic.

It’s hardly the only company hoping to cash in on China’s burgeoning café culture. Comparable store sales at Starbucks’ (SBUX.O) 5,000-plus outlets in the country rose 19% for the third quarter. But the deal values the business at a heady 110 times the adjusted EBITDA that executives hope to make in 2023 – Starbucks’ overall business trades at 18 times – and rests on the company flawlessly brewing growth for several years....

The $15 bln company is adding subscribers at an impressive pace, suggesting its antitrust woes are over. Its karaoke apps, though, are losing users as censors prepare to crack down on streaming services. Shares have more than halved this year, yet it’s too soon to call bottom.

HONG KONG, Aug 17 (Reuters Breakingviews) - China's electric vehicle battery champion is benefitting from Beijing’s rolling crackdown on its technology sector. Contemporary Amperex Technology (300750.SZ), or CATL, is raising $9 billion through a private placement, as jittery investors rotate funds into sectors insulated from policy risk.

The $172 billion Shenzhen-listed firm startled markets last week with the record-setting issue, just one year after it raised $3 billion via a similar issuance. The company is taking advantage of its surging stock price, which has climbed nearly 40% this year to trade at a staggering 80 times forecast earnings per Eikon data; South Korean rival LG Chem (051910.KS) is closer to 18 times. CATL is also benefiting from new rules regarding direct fundraising: companies can now do placements equivalent to 30% of their market capitalisation.

The supplier for marques from Volkswagen (VOWG_p.DE) to Geely Automobile (0175.HK) has found itself...

HONG KONG, Aug 17 (Reuters Breakingviews) - China's electric vehicle battery champion is benefitting from Beijing’s rolling crackdown on its technology sector. Contemporary Amperex Technology (300750.SZ), or CATL, is raising $9 billion through a private placement, as jittery investors rotate funds into sectors insulated from policy risk.

The $172 billion Shenzhen-listed firm startled markets last week with the record-setting issue, just one year after it raised $3 billion via a similar issuance. The company is taking advantage of its surging stock price, which has climbed nearly 40% this year to trade at a staggering 80 times forecast earnings per Eikon data; South Korean rival LG Chem (051910.KS) is closer to 18 times. CATL is also benefiting from new rules regarding direct fundraising: companies can now do placements equivalent to 30% of their market capitalisation.

The supplier for marques from Volkswagen (VOWG_p.DE) to Geely Automobile (0175.HK) has found itself...

Brazilian meatpacker JBS made a curious second bid for Tasmanian salmon farmer Huon after mining billionaire Andrew Forrest raised environmental and animal-welfare concerns. Buyers often come ready to clash over price, not sustainability. Add a new chapter to the deal cookbook.

The $15 bln company is adding subscribers at an impressive pace, suggesting its antitrust woes are over. Its karaoke apps, though, are losing users as censors prepare to crack down on streaming services. Shares have more than halved this year, yet it’s too soon to call bottom.

Brazilian meatpacker JBS made a curious second bid for Tasmanian salmon farmer Huon after mining billionaire Andrew Forrest raised environmental and animal-welfare concerns. Buyers often come ready to clash over price, not sustainability. Add a new chapter to the deal cookbook.

Harry Sloan’s blank-check firm wants to raise $2 bln with the option to spin off some cash in another SPAC. It’s a way to have scale to buy a big target without being forced to. Unlike, say, Bill Ackman’s overwrought effort, it’s a reasonable tweak that shouldn’t worry regulators.

NEW YORK, Aug 16 (Reuters Breakingviews) - A patent ruling in favor of Sonos (SONO.O) is being heard by investors read more . Shares of the wireless-speaker company opened up more than 10% on Monday after a U.S. trade judge said in a preliminary ruling that Alphabet’s (GOOGL.O) Google infringed its patents. Such fights are background noise for U.S. technology firms, but they can help smaller players keep up.

Sonos uses voice technology from Google, and the giant says the $5 billion speaker firm sought its help. Meanwhile, with its move into connected devices, it's no surprise Google encroached on Sonos’ turf.

The stakes are disproportionate. The roughly $500 million in equity value Sonos gained early on Monday equates to an irrelevant 0.03% of Alphabet’s market capitalization. Conversely the connected-speaker business presents few barriers to entry, and Alphabet, with some $136 billion in cash, could easily dominate. The bigger threat from the ruling is a possible...

LONDON, Aug 16 (Reuters Breakingviews) - Oatly (OTLY.O) still has some froth. The Swedish oat milk producer on Monday reported revenue of $286 million in the first six months of the year, up 59% year-on-year. Boss Toni Petersson now expects full-year revenue exceeding $690 million, above analysts’ forecasts of $681 million. Shares rose 3%.

Still, Oatly’s operating losses ballooned to $77 million, compared with $9.5 million in the first half of 2020. Its gross margin fell from 32.4% to 28.1% due to higher logistics expenses and shipment rates. Petersson expects new manufacturing plants in Asia and the United States to better meet demand and eventually cut costs, but inflation and climate change could complicate how he sources oats.

Then there’s short seller Spruce Point’s allegations of issues like accounting irregularities read more , which have fueled a 25% drop in Oatly’s market value in the last month to only slightly above its $17 IPO price . Oatly does trade...

Harry Sloan’s blank-check firm wants to raise $2 bln with the option to spin off some cash in another SPAC. It’s a way to have scale to buy a big target without being forced to. Unlike, say, Bill Ackman’s overwrought effort, it’s a reasonable tweak that shouldn’t worry regulators.

Posted

Germany is planning to sell a quarter of its 20% holding in Deutsche Lufthansa. Having a smaller government stake could help the $6 billion carrier’s planned equity raise. But Aimee Donnellan argues Berlin also needs to strike a balance that benefits the German taxpayer.

Private equity-backed Cobham is offering a 63% premium for rival Ultra Electronics. To get Britain’s approval for the 2.6 bln pound deal, it will make commitments on jobs and research. If those pledges are robust, owner Advent will have to work hard to earn a good return.

The French automotive supplier edged out its rivals with a 6.7 bln euro bid for Lippstadt-based Hella. Annual savings worth 15% of its target’s R&D and marketing costs justify the outlay on their own. Any sort of sales boost would amount to go-faster stripes and alloy wheels.

HONG KONG, Aug 16 (Reuters Breakingviews) - The fall of the U.S.-backed government in Kabul is an historic moment in Beijing. President Xi Jinping has long argued that Asian security should be managed by Asians. Now the pressure is on to show that China can help stabilise Afghanistan economically while protecting Chinese investments nearby. He has his work cut out.

The United States may have wasted two decades nation-building, but China reaped a security dividend anyway. Even as the American military presence aimed to foster stability, Beijing built or dominated regional initiatives that excluded U.S. participation, like the Shanghai Cooperation Organisation and the Conference on Interaction and Confidence-Building Measures in Asia. China poured money into infrastructure, some passing within range of the Afghan border, linking the People’s Republic to markets in Europe and energy suppliers in the Middle East.

Now the United States is gone for good. China, having...

HONG KONG, Aug 16 (Reuters Breakingviews) - The fall of the U.S.-backed government in Kabul is an historic moment in Beijing. President Xi Jinping has long argued that Asian security should be managed by Asians. Now the pressure is on to show that China can help stabilise Afghanistan economically while protecting Chinese investments nearby. He has his work cut out.

The United States may have wasted two decades nation-building, but China reaped a security dividend anyway. Even as the American military presence aimed to foster stability, Beijing built or dominated regional initiatives that excluded U.S. participation, like the Shanghai Cooperation Organisation and the Conference on Interaction and Confidence-Building Measures in Asia. China poured money into infrastructure, some passing within range of the Afghan border, linking the People’s Republic to markets in Europe and energy suppliers in the Middle East.

Now the United States is gone for good. China, having...

LONDON, Aug 16 (Reuters Breakingviews) - Airline pilots try to avoid rocky landings. The German government is doing its bit to assist Deutsche Lufthansa (LHAG.DE) as the battered airline prepares its approach for an equity raise following a torrid pandemic. Berlin said on Monday it plans to sell a quarter of the 20% stake acquired last year via a 9 billion euro bailout read more . The news sent Lufthansa’s shares down 4% on Monday.

The capital hike will likely go better if investors can see the German government’s stake getting smaller. They will fret that ongoing state ownership could limit Lufthansa Chief Executive Carsten Spohr’s scope to make necessary job cuts. On the other hand, selling down a bigger stake prior to a capital increase that could restore Lufthansa’s fortunes, and therefore its share price, doesn’t sound great for the taxpayer. Hence the halfway house. (By Aimee Donnellan)

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