Christopher Thompson
ReutersBreakingviews
United Kingdom
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Past articles by Christopher:
Volvo Cars’ IPO valuation is suitably smoggy – Breakingviews
The marque owned by China’s Geely could be listed at around $21 bln. Hiving off the combustion engine unit was meant to boost its green bona fides. Yet a reliance on gas guzzlers and optimistic battery targets mean the Swedish group will struggle to stand out from dirty rivals. → Read More
Private equity’s German bank raid targets IT jewel – Breakingviews
Advent, Centerbridge and TowerBrook have bid 1.7 bln euros for Wiesbaden-based Aareal. Despite its dismal profitability, the target’s appeal lies in its fast-growing digital real estate unit. That could on its own cover the cost of the deal, making the humdrum bank a freebie. → Read More
Alphawave crash exposes fragility of UK tech hype – Breakingviews
The chip designer’s market value halved after a media report raised fears about related party transactions. Its punchy $4 bln IPO in May was a high point of London’s push to attract startups. Even then, a reliance on a handful of customers left a worryingly thin margin for error. → Read More
Polestar SPAC offers sober detour on EV hype road – Breakingviews
The Swedish electric-car maker is merging with Guggenheim Partners’ blank-cheque vehicle at a $20 bln valuation. A suitably racy revenue multiple needs turbocharged growth to avoid future potholes. But unlike rival Lucid, Chinese-owned Polestar at least has existing production. → Read More
Pricey private equity IPO rides road and rail boom – Breakingviews
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. → Read More
Bolloré gives coup de grâce in French tycoon spat – Breakingviews
Gallic raider Vincent Bolloré may buy publisher Lagardere for 4.6 bln euros, ending a battle for control of the Paris Match owner also involving LVMH boss Bernard Arnault. His Vivendi can make a healthy return, while CEO Arnaud Lagardere at least gets to come along for the ride. → Read More
Universal offers Bill Ackman chart-topping returns – Breakingviews
Vivendi, run by Vincent Bolloré, is listing Taylor Swift’s label shortly after selling a stake to the hedgie. Rapid streaming growth and better margins than rival Warner make a valuation of 47 bln euros plausible. That would net a return of over 30% for Ackman’s Pershing Square. → Read More
Electric vehicles will short-circuit car dealers – Breakingviews
Booming auto sales have buoyed shares in middlemen like $7.6 bln U.S.-based AutoNation and $357 mln UK-listed Pendragon. Battery rides need fewer parts and rely on over-the-air software updates. That’s great for carmakers but means dealerships risk becoming glorified garages. → Read More
VW-style tech hype calls for defensive driving – Breakingviews
CEO Herbert Diess says the “gamechanger” for his industry will be software and autonomous cars, with the former a $1.4 trln global market by 2030. Such a Panglossian take relies on fleets of robo-taxis and driver-downloads galore, plus manoeuvring past tech leaders like Alphabet. → Read More
Volkswagen makes timid bet on brave new car world – Breakingviews
A group led by the German carmaker will pay $3.4 bln for Europcar. The rental company’s city sites may help CEO Herbert Diess sell new services like subscriptions and self-driving taxis. But keeping the unit at arm’s length suggests caution at odds with the optimistic vision. → Read More
Apollo SPAC offers cheap ride on EV hype freeway – Breakingviews
Electric vehicle charging group Allego is listing through one of the buyout firm’s blank-cheque companies for $3 bln. It’s a crowded space, but a valuation multiple of 5 times 2024 sales is less racy than rivals. Still, only booming battery car demand will avoid a short-circuit. → Read More
Cost control gives Barclays edge over Deutsche – Breakingviews
Robust capital markets helped boost both lenders’ earnings in the first half. But the German bank run by Christian Sewing likely needs top-line growth to hit its 2022 profit goal. Rival Jes Staley’s tighter efficiency means the UK group is less reliant on unreliable revenue. → Read More
Slimdown can help Worldline get fit for M&A battle – Breakingviews
The $26 bln Paris-listed payments group may sell a unit that makes handheld kit for card transactions. A sale could boost its shares and raise $5 bln to replenish CEO Gilles Grapinet’s war chest. That would help him hoover up smaller players and fend off rivals like Italy’s Nexi. → Read More
ABB offers lesson in virtue of simplicity – Breakingviews
The $75 bln Swiss industrials giant is selling a power transmission unit to RBC Bearings for $2.9 bln. The rich price vindicates CEO Bjorn Rosengren’s plan to slim down and focus on electrification and robots. That will likely cement a premium valuation versus rival Siemens. → Read More
European payments jewels are wasted in bank vaults – Breakingviews
BNP, SocGen, Santander and others process billions of card transactions but the potentially valuable units get no credit within stodgy banks. CEOs may resist spinoffs for fear of missing future growth. Yet sitting on a subscale business means losing ground to digital upstarts. → Read More
Self-driving is pricey route to car parts future – Breakingviews
Magna International is paying $3.8 bln for Sweden’s Veoneer, which makes systems that help cars steer themselves. It reduces the $25 bln Canadian group’s exposure to combustion engines. But CEO Swamy Kotagiri will have to put his foot down to keep financial returns on the road. → Read More
Combustion shift helps electrify Volvo IPO – Breakingviews
The Swedish carmaker is steering its petrol engine unit into a joint venture with parent Geely before a stock market listing. Focusing on future electric car sales helps drive Chairman Li Shufu closer to a racy valuation. Still, ongoing gas guzzler sales dent green bona fides. → Read More
Aston Martin needs a James Bond-style escape – Breakingviews
Shares in 007’s carmaker have risen over 70% since its last rescue under billionaire Lawrence Stroll. Its $3 bln valuation defies logic given high debt and scant profit. Investors may hope for a takeover, but likely buyers like Daimler or China’s Geely would drive a hard bargain. → Read More
Pricey Finland pulp deal offers paper-thin returns – Breakingviews
Shares in 5 bln euro Finnish engineer Valmet fell after it agreed an all-share takeover of valve maker Neles. Although both operate in paper, the modest cost savings on offer suggest CEO Pasi Laine may struggle to generate decent returns. Investors are right to be sceptical. → Read More
Knorr risks a prang in German auto bidding war – Breakingviews
The 16 bln euro brake maker’s shares fell sharply after it said it might buy car electricals supplier Hella. The latter’s focus on lights points to minimal savings. Competition from more logical bidders like France’s Faurecia will drive financial returns even further off-road. → Read More