HONG KONG, Aug 10 (Reuters Breakingviews) - Jay Y. Lee's get-out-of-jail-free card prepares the next chapter for Samsung Electronics (005930.KS). The early release of the conglomerate’s de facto boss from prison ramps up pressure on him to use its huge cash pile to make splashy investments. Samsung's heft will force some creative dealmaking. It's a tricky combination to manage well.

Lee's parole marks a huge setback for South Korea's corporate governance reformers. The 53-year-old had served less than two-thirds of a 30-month sentence - already reduced from five years - for bribery, embezzlement and other charges. Advocates for his early release, including business lobby groups and the local chapter of the American Chamber of Commerce, had argued that the $480 billion tech powerhouse was unable to make major investments and acquisitions with its key decision-maker behind bars. Citing Lee's good behaviour and the country's pandemic-hit economy, officials...

Fresh lockdowns are exposing Prime Minister Scott Morrison’s botched vaccine efforts. And yet business is upbeat, asset prices are rising and the central bank will curb support. Mounting fiscal and demographic costs have yet to faze a country conditioned to believe in miracles.

Jean-Marc Gilson, the first foreigner to run industrial giant Mitsubishi Chemical, is streamlining a conglomerate with fingers in everything from pharma to batteries. He talks with Pete Sweeney about clean energy, better governance and how outsiders fit into Japan Inc.

Jean-Marc Gilson, the first foreigner to run industrial giant Mitsubishi Chemical, is streamlining a conglomerate with fingers in everything from pharma to batteries. He talks with Pete Sweeney about clean energy, better governance and how outsiders fit into Japan Inc.

Fresh lockdowns are exposing Prime Minister Scott Morrison’s botched vaccine efforts. And yet business is upbeat, asset prices are rising and the central bank will curb support. Mounting fiscal and demographic costs have yet to faze a country conditioned to believe in miracles.

MUMBAI, Aug 9 (Reuters Breakingviews) - Nykaa is adding a shimmer to Indian tech listings. Former investment banker Falguni Nayar’s mostly online beauty store is growing fast by selling lipstick, epilators and sneakers to a loyal band of millennials in far-flung cities where it can often be tricky to find good products. The company ekes out a profit too. That stands it apart from money-losing compatriots Zomato (ZOMT.NS), Paytm, and PolicyBazaar, which are all racing to debut in a red-hot market. And it makes Nykaa’s mooted up to $4.5 billion valuation for its initial public offering look less dolled up.

The nearly decade-old firm houses close to 4,000 brands from domestic luxury names Forest Essentials to high-end foreign ones like Bobbi Brown. It processed 19.5 million orders in the year to the end of March, with a respectable average order value of $37 in fashion. Users flock to the site to learn about the latest beauty trends, and a network of over 1,300 influencers...

MUMBAI, Aug 9 (Reuters Breakingviews) - Nykaa is adding a shimmer to Indian tech listings. Former investment banker Falguni Nayar’s mostly online beauty store is growing fast by selling lipstick, epilators and sneakers to a loyal band of millennials in far-flung cities where it can often be tricky to find good products. The company ekes out a profit too. That stands it apart from money-losing compatriots Zomato (ZOMT.NS), Paytm, and PolicyBazaar, which are all racing to debut in a red-hot market. And it makes Nykaa’s mooted up to $4.5 billion valuation for its initial public offering look less dolled up.

The nearly decade-old firm houses close to 4,000 brands from domestic luxury names Forest Essentials to high-end foreign ones like Bobbi Brown. It processed 19.5 million orders in the year to the end of March, with a respectable average order value of $37 in fashion. Users flock to the site to learn about the latest beauty trends, and a network of over 1,300 influencers...

MELBOURNE, Aug 9 (Reuters Breakingviews) - It’s tempting to read the United Nations’ latest scientific study on climate change and despair. Human activity is “unequivocally” to blame for global warming, according to the 234 scientists from 66 countries who compiled the report for the world’s governments. Moreover, people have pumped enough greenhouse gases into the atmosphere to ensure far more frequent disruption from rising sea levels, floods, water scarcity, and wildfires for decades if not centuries. But the U.N. report published on Monday throws down the gauntlet for finance to act.

Granted, companies’ willingness to tackle climate change has picked up momentum. Investors have a raft of lobby groups to choose from – Climate Action 100+, for example, has more than 615 investors with $55 trillion in assets pushing major carbon emitters to up their game. More banks are refusing to finance certain types of fossil-fuel extraction and power plants, and are under pressure...

NEW YORK, Aug 9 (Reuters Breakingviews) - In June 2020, casino mogul Tilman Fertitta agreed to sell his Golden Nugget Online Gaming (GNOG.O) outfit to a special-purpose acquisition company – also managed by him – for $314 million in shares plus $30 million in cash. Now another ex-SPAC, $21 billion digital sports and gaming company DraftKings (DKNG.O), is sweeping up the publicly traded Golden Nugget for an equity value of around $1.6 billion, the companies said on Monday.

That is a premium of more than 50% to the target’s market value on Friday. Fertitta’s entertainment group now owns about 46% of Golden Nugget, so the Houston Rockets owner’s share, payable in DraftKings stock, is worth around $700 million. That’s a handy doubling since just over a year ago.

That two SPAC progeny are combining is a reminder of the rush of blank-check vehicles read more that came to market in recent years. DraftKings’ future value hinges on further liberalization and adoption of...

The $4.5 bln sale of U.S. producer Sanderson Farms to Cargill and Continental Grain comes as U.S. chicken prices and the company’s own stock are both on a roll. Boss Joe Sanderson has no family interested in taking over. That doesn’t force a sale, but it’s one more nudge.

NEW YORK, Aug 9 (Reuters Breakingviews) - Oil isn’t the only hidden treasure in the Lone Star state. Brookfield Asset Management Reinsurance (BAMR.N), an arm of the Brookfield financial empire, is paying $5.1 billion for Texas-based insurer American National (ANAT.O) read more . The key is Brookfield’s taste for risk and the American National controlling family’s aversion to it.

Insurers are popular targets for private equity firms like KKR (KKR.N) and Blackstone (BX.N) read more , which reinvest policyholders’ contributions into their own deals. The sprawling Brookfield , which includes Oaktree Capital, has plenty to draw on, from infrastructure to private credit.

American National, majority owned by the Moody family, is unusually suitable. It pronounces itself conservatively run, reflected in its meager 7% average annual return on equity over the past three years. Brookfield can notch up risk while still playing it fairly safe.

The Moodys' conservatism may...

The $4.5 bln sale of U.S. producer Sanderson Farms to Cargill and Continental Grain comes as U.S. chicken prices and the company’s own stock are both on a roll. Boss Joe Sanderson has no family interested in taking over. That doesn’t force a sale, but it’s one more nudge.

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Philip Morris International upped its 1 bln pound bid for UK inhaler maker Vectura, beating rival Carlyle. Anti-tobacco investors may prefer the buyout firm. But PMI has more strategic know-how and Carlyle will sell in a few years. Price should be decisive, says Dasha Afanasieva.

LONDON, Aug 9 (Reuters Breakingviews) - Macquarie is poking around in murky British waters. The Australian bank’s infrastructure management arm on Monday bought a majority stake in Southern Water for 1 billion pounds as part of a recapitalisation that will dilute existing owners, including UBS Asset Management and Hermes Investment Management.

The company, which serves the counties of Kent, Sussex and Hampshire, has a patchy history. It recently paid a 90 million pound penalty, the sector’s biggest, for dumping sewage in rivers and off coasts. Macquarie is pledging to cut Southern’s debt, beef up governance, invest in new infrastructure and adopt a “zero tolerance” policy to pollution.

Assuming Macquarie takes a 62% equity stake, its investment – including debt - values Southern at less than 110% of its regulatory capital value, a metric used to value British water companies, according to a Breakingviews calculation. Rival Pennon (PNN.L) trades at a nearly 40%...

Posted

Philip Morris International upped its 1 bln pound bid for UK inhaler maker Vectura, beating rival Carlyle. Anti-tobacco investors may prefer the buyout firm. But PMI has more strategic know-how and Carlyle will sell in a few years. Price should be decisive, says Dasha Afanasieva.

Philip Morris International raised its 1 bln pound bid for UK pharma group Vectura, beating Carlyle’s sweetened offer. Shareholders that shun tobacco may prefer the buyout firm. But PMI has more strategic know-how and Carlyle could sell in a few years. Price should be decisive.

The Saudi oil giant’s ultimate boss, Crown Prince Mohammed bin Salman, wants it to help fund the kingdom’s pivot away from crude. A strong first half makes it easier to do that and pay dividends. Unlike last year, Aramco can also meet its various demands without debt spiking.

MELBOURNE, Aug 9 (Reuters Breakingviews) - It’s tempting to read the United Nations’ latest scientific study on climate change and despair. Human activity is “unequivocally” to blame for global warming, according to the 234 scientists from 66 countries who compiled the report for the world’s governments. Moreover, people have pumped enough greenhouse gases into the atmosphere to ensure far more frequent disruption from rising sea levels, floods, water scarcity, and wildfires for decades if not centuries. But the U.N. report published on Monday throws down the gauntlet for finance to act.

Granted, companies’ willingness to tackle climate change has picked up momentum. Investors have a raft of lobby groups to choose from – Climate Action 100+, for example, has more than 615 investors with $55 trillion in assets pushing major carbon emitters to up their game. More banks are refusing to finance certain types of fossil-fuel extraction and power plants, and are under pressure...

LONDON, Aug 9 (Reuters Breakingviews) - Richard Branson’s recent trip to edge of space appears to have gone to his head. The British tycoon now wants to list his loss-making Virgin Atlantic airline on the London Stock Exchange, Sky News reported on Saturday. Admittedly, the carrier has undergone a radical overhaul since its brush with death last year. Yet the uncertain future for air travel, especially for businesspeople crossing the Atlantic, will make for a bumpy ride.

Even before last year’s 864 million pound net loss, Virgin Atlantic was struggling with financial altitude. It hadn’t turned a profit since 2016, unlike arch-rival British Airways. In 2019 its net debt was 5 times EBITDA, a metric that’s unlikely to have been helped by last year’s 1.2 billion pound rescue package . To cap it all, U.S. budget carrier JetBlue (JBLU.O) is launching a transatlantic service. An initial public offering would be the ultimate test of public market investors’ nerves. (By Ed...

LONDON, Aug 9 (Reuters Breakingviews) - Delivery Hero (DHER.DE) has a strange appetite for holding shares in its competitors. The 33 billion euro German food delivery company has built up a 5% stake in Deliveroo (ROO.L), worth nearly 300 million pounds using Friday’s share price, according to a Monday filing from the newly listed UK group. Deliveroo shares promptly rose more than 9%.

Delivery Hero already owns 7.4% of Just Eat Takeway.com (TKWY.AS) and has invested in startups Glovo and Rappi. It may also have spotted a bargain: Deliveroo trades at more than 2 times expected 2022 sales, using Refinitiv estimates, while Delivery Hero and Just Eat Takeaway are valued at an average of 3.5 times.

Nevertheless, the logic is hard to divine. Deliveroo boss Will Shu has over 50% of the voting rights, meaning any takeover would have to be friendly. The German group also lost 1.4 billion euros after tax on 2.5 billion euros of sales in the year to December. Building passive...

Carbon emissions from human activity are “unequivocally” to blame for global warming, a new report says. Financial markets are belatedly coming up with solutions, like a Prudential-inspired plan to close coal plants. All their creativity is needed to tackle the planet’s crisis.