LONDON, Sept 16 (Reuters Breakingviews) - Michael O’Leary is cranking up the mind-games. A week after easyJet (EZJ.L) asked shareholders for 1.2 billion pounds to bolster its balance sheet and revealed a spurned takeover approach, the chief executive of arch-rival Ryanair (RYA.I) is laying out his plans for domination of Europe’s skies. The Irishman on Thursday raised his long-term passenger forecasts by 12.5%, predicting 225 million “guests” a year by 2026, compared to 149 million in the year before the pandemic. Citi analysts reckon that will take Ryanair’s market share to 20% from 13% two years ago.

That puts the spotlight on 5 billion euro easyJet and slightly larger rival Wizz Air (WIZZ.L), widely reported to be easyJet’s mystery suitor. With Ryanair on a charge, there’s more pressure on the pair to join forces. That might even be to O’Leary’s advantage. Wizz’s ultra-low-cost model is at odds with easyJet’s slightly plusher offering. A merger could make Wizz less...

French Infrastructure boutique Antin is raising 550 mln euros in Paris. It’s a chance to profit from Europe and America’s plans to boost investment, though closely held shares mean investors only get a passenger seat. Stellar growth is needed to justify a 4 bln euro valuation.

LONDON, Sept 16 (Reuters Breakingviews) - Beijing’s crackdown on Jack Ma’s fintech giant continues, but there may be some silver linings to the latest wrinkle, Robyn Mak tells Pete Sweeney. Meantime Dasha Afanasieva explains what a cigar spinoff at Swedish Match and carveouts at Royal DSM have in common.

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Biotech upstart Prenetics is set to go public in a $1.7 bln merger with a blank-cheque firm. Demand for virus test kits at airports and homes has boosted sales, but that is unlikely to last. Growth will depend on new technologies and habits in a post-pandemic world.

Biotech upstart Prenetics is set to go public in a $1.7 bln merger with a blank-cheque firm. Demand for virus test kits at airports and homes has boosted sales, but that is unlikely to last. Growth will depend on new technologies and habits in a post-pandemic world.

After a stock rally as fiery as its liquor, the Chinese distiller has lost some $200 bln of market value since February. The industry is facing fresh regulatory scrutiny, which could keep prices flat. A new state-picked chairman also builds a case against the top-shelf valuation.

MUMBAI, Sept 16 (Reuters Breakingviews) - Getting Teslas (TSLA.O) on the road in India would be a flashy boost to the country’s goal of rapidly electrifying its car market. But New Delhi can afford to resist granting boss Elon Musk a shortcut to his desired destination.

Camouflaged Teslas have been spotted on Mumbai roads in recent weeks as the company won approval to sell four models in India. At present, it can only import them, with eye-watering tariffs as high as 100%. Musk wants the government to lower the levy, dangling the prospect of building a factory in India if there’s sufficient demand.

A factory based on Tesla’s current range seems a stretch. The starting price for its cheapest vehicle, the Model 3, is 235,900 yuan ($36,506) in China, where the company has a factory. That’s several times the average cost of a car in India and on the cusp of the luxury category which has barely a 1% share of a relatively small market: Overall passenger-car sales in India...

After a stock rally as fiery as its liquor, the Chinese distiller has lost some $200 bln of market value since February. The industry is facing fresh regulatory scrutiny, which could keep prices flat. A new state-picked chairman also builds a case against the top-shelf valuation.

Posted

Aussie driller Santos’ pledge for net-zero emissions is being challenged by activists in court as greenwashing. The company is relying on unproven technology that wouldn’t kick in until the 2030s. Other fossil-fuel firms could follow it into the dock, explains Antony Currie.

NEW YORK, Sept 15 (Reuters Breakingviews) - Microsoft (MSFT.O) has options. The $2.3 trillion company announced a $60 billion share buyback on Wednesday, despite the fact that its stock has risen 50% in the past 12 months. But it has twice as much in its coffers and plenty of cash flow on the way.

The software firm run by Satya Nadella is reloading its repurchase program after working through an earlier plan. This one may take several quarters, but it is relatively small compared with past years. In fiscal 2006 and 2007, for example, the company repurchased almost $50 billion of shares. Microsoft’s market capitalization was roughly one-seventh of its current value.

That’s when investors feared Microsoft’s best days were behind it. But the shares’ run suggests they have faith. Microsoft has been able to make acquisitions without too much pushback from regulators , compared with fellow cash-rich tech companies read more . With analysts expecting free cash flow of $63...

NEW YORK, Sept 15 (Reuters Breakingviews) - Canadian National Railway (CNR.TO) didn’t mean for it to end this way. The railroad run by Jean-Jacques Ruest said on Wednesday that roughly $30 billion target Kansas City Southern (KSU.N) had terminated their merger agreement in favor of a deal with rival Canadian Pacific Railway (CP.TO). The good news is that Canadian National is in line to receive a $700 million break fee on top of a refund of the $700 million it paid to bust up an earlier deal between KCS and Canadian Pacific . The bad news is that it could have a messy battle awaiting it.

Chris Hohn’s TCI Fund Management, a shareholder in both Canadian groups read more , wants to refresh Canadian National’s board and corner office. That puts Ruest and others in the hot seat.

Having lost out on KCS, the best outcome, at this point, would be for Canadian National to settle with Hohn on a couple of board changes and move on. Slightly fatter cash coffers are a sweetener,...

NEW YORK, Sept 15 (Reuters Breakingviews) - Back when Goldman Sachs (GS.N) was the vampire squid of the financial world, few would have guessed it would end up financing hair replacements and kitchen renovations. The $2.2 billion acquisition of GreenSky (GSKY.O), a buy-now-pay-later specialist, takes boss David Solomon’s firm in a new direction. Like most fintech deals, though, it’s really a novel way of doing an old thing.

GreenSky brings Goldman something all banks want: borrowers on a plate. The company arranges financing at the point of sale, without paperwork. That makes it similar to other buy-now-pay-later operators like Afterpay (APT.AX), which is being bought for $29 billion by payment firm Square (SQ.N), but with a bigger average loan of around $10,000 thanks to a skew towards relatively expensive things like home improvements and medical procedures. For now, partner banks make the actual loans, but soon that will be Goldman’s job – aided by its own expertise in...

NEW YORK, Sept 15 (Reuters Breakingviews) - Microsoft (MSFT.O) has options. The $2.3 trillion company announced a $60 billion share buyback on Wednesday, despite the fact that its stock has risen 50% in the past 12 months. But it has twice as much in its coffers and plenty of cash flow on the way.

The software firm run by Satya Nadella is reloading its repurchase program after working through an earlier plan. This one may take several quarters, but it is relatively small compared with past years. In fiscal 2006 and 2007, for example, the company repurchased almost $50 billion of shares. Microsoft’s market capitalization was roughly one-seventh of its current value.

That’s when investors feared Microsoft’s best days were behind it. But the shares’ run suggests they have faith. Microsoft has been able to make acquisitions without too much pushback from regulators , compared with fellow cash-rich tech companies read more . With analysts expecting free cash flow of $63...

NEW YORK, Sept 15 (Reuters Breakingviews) - Canadian National Railway (CNR.TO) didn’t mean for it to end this way. The railroad run by Jean-Jacques Ruest said on Wednesday that roughly $30 billion target Kansas City Southern (KSU.N) had terminated their merger agreement in favor of a deal with rival Canadian Pacific Railway (CP.TO). The good news is that Canadian National is in line to receive a $700 million break fee on top of a refund of the $700 million it paid to bust up an earlier deal between KCS and Canadian Pacific . The bad news is that it could have a messy battle awaiting it.

Chris Hohn’s TCI Fund Management, a shareholder in both Canadian groups read more , wants to refresh Canadian National’s board and corner office. That puts Ruest and others in the hot seat.

Having lost out on KCS, the best outcome, at this point, would be for Canadian National to settle with Hohn on a couple of board changes and move on. Slightly fatter cash coffers are a sweetener,...

NEW YORK, Sept 15 (Reuters Breakingviews) - Back when Goldman Sachs (GS.N) was the vampire squid of the financial world, few would have guessed it would end up financing hair replacements and kitchen renovations. The $2.2 billion acquisition of GreenSky (GSKY.O), a buy-now-pay-later specialist, takes boss David Solomon’s firm in a new direction. Like most fintech deals, though, it’s really a novel way of doing an old thing.

GreenSky brings Goldman something all banks want: borrowers on a plate. The company arranges financing at the point of sale, without paperwork. That makes it similar to other buy-now-pay-later operators like Afterpay (APT.AX), which is being bought for $29 billion by payment firm Square (SQ.N), but with a bigger average loan of around $10,000 thanks to a skew towards relatively expensive things like home improvements and medical procedures. For now, partner banks make the actual loans, but soon that will be Goldman’s job – aided by its own expertise in...

Posted

Aussie driller Santos’ pledge for net-zero emissions is being challenged by activists in court as greenwashing. The company is relying on unproven technology that wouldn’t kick in until the 2030s. Other fossil-fuel firms could follow it into the dock, explains Antony Currie.

LONDON, Sept 15 (Reuters Breakingviews) - Swedish Match (SWMA.ST) can feed Philip Morris International’s (PM.N) M&A addiction. The nicotine pouch and oral tobacco maker on Wednesday said it would spin off its cigar business to become a smoke-free company. That makes it more attractive for PMI Chief Executive Jacek Olczak and his ambitious non-combustible goals.

The Marlboro Man buying Swedish Match is hardly a new idea. But the maker of Scandi Snus tobacco pouches has always looked expensive, and could become even more so sans cigars. While some institutional investors shun tobacco outright, others consider a company’s direction of travel. Thus ditching its cigars may mean more demand for Swedish Match shares. After Wednesday’s 4% gains, it trades at 22 times this year’s earnings. By comparison, $160 billion PMI, a Big Tobacco outperformer, trades at 17 times.

But medium-term financial returns may not be Olczak’s top priority. He wants PMI to generate over half...

Posted

Aussie driller Santos’ pledge for net-zero emissions is being challenged by activists in court as greenwashing. The company is relying on unproven technology that wouldn’t kick in until the 2030s. Other fossil-fuel firms could follow it into the dock, explains Antony Currie.

LONDON, Sept 15 (Reuters Breakingviews) - Swedish Match (SWMA.ST) can feed Philip Morris International’s (PM.N) M&A addiction. The nicotine pouch and oral tobacco maker on Wednesday said it would spin off its cigar business to become a smoke-free company. That makes it more attractive for PMI Chief Executive Jacek Olczak and his ambitious non-combustible goals.

The Marlboro Man buying Swedish Match is hardly a new idea. But the maker of Scandi Snus tobacco pouches has always looked expensive, and could become even more so sans cigars. While some institutional investors shun tobacco outright, others consider a company’s direction of travel. Thus ditching its cigars may mean more demand for Swedish Match shares. After Wednesday’s 4% gains, it trades at 22 times this year’s earnings. By comparison, $160 billion PMI, a Big Tobacco outperformer, trades at 17 times.

But medium-term financial returns may not be Olczak’s top priority. He wants PMI to generate over half...

LONDON, Sept 15 (Reuters Breakingviews) - The travelling IT salesman may be a dying breed. Darktrace (DARK.L) shares soared nearly 10% on Wednesday after the $6.5 billion British cybersecurity firm raised its sales and margin forecasts for the year ahead. Revenue in the 12 months to June surpassed expectations, growing 41% to $281 million. But the Cambridge-based group, which uses machine learning to detect anomalies in IT systems, also benefitted from a 92% collapse in travel and entertainment costs due to pandemic movement restrictions. Chief Executive Poppy Gustafsson now expects an adjusted EBITDA margin of 2%-5%, from 1%-4% previously.

Before the outbreak of Covid-19, her army of salespeople schmoozed clients in high-end hotel suites and technology jamborees. When Covid struck, they retreated to Zoom, yet still pulled in new business. Over the past year, Darktrace’s customer base swelled 45%. A technology company splashing out on plane tickets and hotel rooms to win...