Good morning! There are deals in the air. Here’s what you need to know…
1. Rupert Murdoch’s $US80 billion bid for Time Warner. The Australian media boss’s new company, 21st Century Fox, has made an audacious bid for Time Warner, owner of HBO (the Game of Thrones producers), CNN, Warner Brothers and DC Comics. It would create a $US160 billion giant of a media company with $US65 billion in revenue. Time Warner has rejected the initial offer but many believe Murdoch is determined to get it. One way to think about it is in terms of distribution. There’s huge consolidation going on in the US cable market; a company this size would have epic leverage in negotiations with the bigger cable companies (which currently pay fees per subscriber to Fox). There’s more on that here.
2. Here’s what happened the last two times Murdoch made a big takeover play. Wall Street legend Art Cashin of UBS put together this chart, showing an alignment between big Murdoch acquisitions and market tops…
Not that it means much. Now, to the markets…
3. The Dow hit a record high, closing at 17,123, up 0.4%, buoyed by the Time Warner offer. The S&P 500 was also up 0.4% and the Nasdaq was up 0.3%. It followed a mixed day in Asian trade, with the Nikkei off 0.1%, Shanghai 0.16% lower, and the Hang Seng up 0.3% following the release of Chinese GDP data which beat expectations slightly at 7.5% year on year. The Australian dollar fell, however, with the market rattled by attendant China property data which showed house sales fell more than 9% in the first half of the year.
4. M&A activity has been surging globally, according to the latest Intralinks deal flow indicator, out today. Globally the rate is up 12% year on year and 16% quarter-on-quarter. One interesting point is that despite Australia close trade ties to Asia, M&A activity has tended to follow the trends in North America and Europe – which is a good thing, because the APAC region’s levels fluctuate wildly: down 15% last quarter, but up 20% the quarter before!
5. We’re going to have morons running these companies. Carl Icahn spoke at the Delivering Alpha conference overnight, and shared his concern about corporate cultures that allow certain types to get to the top, when that might not be in the best interests of the company. “He means the frat boy types that have survived at companies by working political angles,” explains BI’s Linette Lopez. “Once they get to the top they want someone dumber than them below so they can maintain their status.” More here.
6. The US has escalated sanctions against Russia, amid continuing tensions on the Ukraine border between the Ukranian military and pro-Russian separatists. Whereas previous sanctions targeted Russian oligarchs and their companies, the new list includes giant Russian companies including Rosneft, the world’s largest oil company, and Gazprombank, Russia’s largest private bank; the sanctions cut off their access to the US debt markets, intended to cut them off from the US financial system altogether. More here.
7. Tom Waterhouse is back. The bookie Australia loved to hate has been appointed chief executive of the Australian operations of bookmaker William Hill, the AFR reports this morning. This puts him in charge of Sportingbet and Centrebet. Impressive comeback.
8. Kim Kardashian stands to make $US90 million this year from her new app “Kim Kardashian: Hollywood”, a game in which players start on the E-list for parties and work their way up to the A-list. The game drives in-app purchases and looks like it might bring in around $190 million this year. Kim keeps 45% of revenue. Tidy.
9. Did the World Cup save Twitter? Twitter would have had huge activity during the world’s biggest sporting event but there’s some data that has been leaked to Business Insider – by two separate sources, independently – that shows the social network’s growth in its monthly active users has been continuing to slow. While this data needs to be taken with a pinch of salt (explained in detail here), it will mean there’ll be a renewed focus on whether Twitter has a natural “ceiling” in terms of its appeal to consumers.
10. How to say ‘no’ at work. It’s an important skill that can help manage your workload, or stop you taking that meeting you don’t want. You how to do it already – think about how you say “no” if someone asks if it rained yesterday. Here’s how to use that tone for more sensitive situations.
Bonus item: Here’s a pilot throwing a Boeing 787 Dreamliner around like a fighter. Apologies for the music sounding like the theme music for a golf show.
Have a cracking day. I’m on Twitter: @colgo
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