Companies in the news ... and how they were assessed
Berkshire Hathaway: death and regrets
The Berkshire Hathaway annual meeting has been called the “Woodstock of Capitalism” and “a host of other corny names over the years”, said Bob Bryan on Business Insider. But this year, for all the usual banter between CEO Warren Buffett, 86, and his veteran investment partner Charlie Munger, the mood seemed “downbeat”. A good portion of the “marathon” Q&A session focused on two things: “Buffett’s death and Berkshire’s misses”. “If I die tonight, I think the stock would go up tomorrow,” quipped Buffett, citing the breakup value of the group. But his questioners wanted more information on who might succeed him. Buffett dodged that, embarking instead on a full “mea culpa” about how he’d overlooked tech stars Google and Amazon in favour of making “a large investment” in IBM, which hadn’t “turned out so well”. It wasn’t all doom and gloom, said CNBC. Berkshire, after all, reported a “record” full-year profit of $24bn – up 21% on last year. But even that didn’t mollify critics, who questioned the company’s “compatibility” with 3G Capital – the aggressive Brazilian buyout group, led by Jorge Paulo Lemann, with whom Berkshire owns a 51% stake of Kraft Heinz.
Akzo Nobel/ppg Industries: shaggy dog tale
Actually, the Brazilians appear to be toning down the testosterone, said Alex Brummer in the Daily Mail. After the failure of Kraft Heinz’s £115bn hostile offer for Unilever early this year, 3G Capital has “let it be known” that it is “done with hostile takeovers”. If only others would see the light. This week, the board of Akzo Nobel – the Dutch company that has owned Dulux paint since it bought Britain’s ICI in 2007 – refused a third takeover offer from its largest US rival, PPG Industries. The latter now has the choice of either going “hostile” or going away. All credit to the Akzo board for turning down PPG’S latest £23bn enticement with such a “flourish”, said Nils Pratley in The Guardian. As well as questioning the value of the offer, directors said they were also put off by what they called PPG’S “lack of cultural understanding”. That phrase is likely to anger the “already irate” faction of activist shareholders pushing for a deal. But since PPG’S promised cost savings would likely mean “heavy job losses”, Akzo is right to shout about the interests of “stakeholders” beyond shareholders. Britain could do with more companies with the same “fighting spirit”.
ITV: headless drama
Seven years after taking over at ITV, Adam Crozier is off at the end of June with a likely multimillion-pound “golden goodbye”. Yet he leaves the broadcaster headless, said Jim Armitage in the London Evening Standard. There is “no successor lined up”, and “no date put on when a new boss will be found”. Crozier has been a force for good at ITV: shares, priced at 50p when he joined, were trading at 208p last week. But the “bad guidance” surrounding his departure is bound to spark speculation that, after a successful turnaround, Crozier is “quitting while he’s ahead”: there are ominous warnings of further trouble in the advertising market. Some investors are livid. Others might take heart from an “old saw from the textbook of corporate dramas” – that companies without chief executives tend to attract takeover approaches. Liberty Media, which has a 9.9% stake in ITV, “will be watching events with interest”.