Listen to this Breakfast Briefing
Viacom-CBS Deal Dies
The proposed merger of CBS Corp and Viacom has been withdrawn by its principal supporter Shari Redstone.
Editor’s Remarks: Needless to say, both stocks fell upon the announcement. The entertainment industry has seen numerous deals announced for traditional content providers to better combat the arrival of Netflix, Amazon and others to the table. However, the combination of Viacom believing it is undervalued in the market, and CBS leader Les Moonves wanting control of the Redstone family’s voting powers could lead to, in the end, family politics severely hampering the future growth of both firms as they miss out on this deal.
What to watch: AT&T, Time Warner, 21st Century Fox, Sky, CBS Corp, Viacom, Redstone Family
Cohn New Chief Economic Advisor
Reports indicate that Gary Cohn, President of Goldman Sachs, has accepted Trump’s offer to lead the National Economic Council.
Editor’s Remarks: The position essentially places Cohn as the chief economic advisor on economic policy to the incoming president. Cohn was touted as the next CEO of Goldman Sachs after spending 25 years with the bank and being promoted to president in 2006. Donald Trump is giving yet another indication that he wants to work in close collaboration with Wall Street despite his anti-establishment campaign rhetoric.
What to watch: Gary Cohn, Goldman Sachs, Donald Trump, National Economic Council
Chipotle Loses One CEO
Co-CEO Monty Moran will leave his position to give founder and other CEO Steve Ells complete operational control of Chipotle.
Editor’s Remarks: It seems the presence of activist investor William Ackman has finally made its mark on the ailing fast food company. Ackman still wants board seats and to improve the perception of the company after its food safety crisis. However, with Chipotle losing customers and sales falling, it seems a little too late for the firm as other burrito chains continue to appear and one problems replaces another. Its efforts in improving food quality have apparently led to reduced customer experience.
What to watch: Chipotle, Chilango, Taco Bell, El Pollo Loco, Qdoba
Barclays Out Of France
AnaCap, a PE firm, will buy the French retail, insurance and wealth management division of Barclays.
Editor’s Remarks: The deal will see 74 branches and 1,000 staff taken off Barclays’ books. Barclays announced very early in 2016 that it would sell most of its continental assets, from Spain to Italy, alongside its wealth management divisions in the US and Asia. Barclays is hoping to focus on its core services and more importantly, core markets. 2017 should see an entirely different and agile Barclays and most likely a better bottom line.
What to watch: Barclays, AnaCap, Mediobanca, HSBC, Lloyds, RBS
Hammond Wants Transition Period
UK Chancellor Philip Hammond has stated that the government supports a transition period to help businesses as they move into the Brexit era.
Editor’s Remarks: It seems increasingly likely that Theresa May and her government are backpedalling from a firm position on a Hard Brexit as they come to terms with company concerns over instability. Philip Hammond answered calls for a minimum two-year transition period with a statement leaving the door open for something longer. Hammond also suggested that several programs with the EU would stay. Remain voters and businesses will take heart at the words of Hammond in that the UK government will bend enough to ensure EU market passporting rights but still without a clear negotiation strategy, it is still all a guessing game.
What to watch: Philip Hammond, EUR/GBP, GBP/USD, Theresa May