LONDON/HONG KONG (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.
People walk by Westfield shopping centre in Shepherd’s Bush, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 26, 2020.
– Nestlé/Freshly
– Taiwan
– Unibail
NETFLIX DINNERS. Just as restaurants in Europe shut their doors again, Nestlé is embracing the modern TV dinner. The Swiss food giant announced on Friday that its buying U.S. pre-prepared meal delivery company Freshly for as much as $1.5 billion, including $550 million that depends on future growth. The maximum valuation of more than 3 times this years forecast sales of $430 million looks rich. Rival recipe-box company HelloFresh trades at an enterprise value of 2.4 times trailing revenue, according to Refinitiv.
Freshly offers a health-conscious take on the humble ready meal, offering dishes like cauliflower-shell bolognese and pulled pork al pastor to customers eating at home who dont want to cook. The deal may not add much to the top line of Nestlés expected revenue of more than $90 billion this year. But the benefit of getting to know American households better is the garnish on this gluten-free supper. (By Dasha Afanasieva)
WHAT PANDEMIC? Taiwans economy expanded 3.3% in the third quarter from a year earlier, exceeding the 1.5% anticipated in a Reuters poll and the fastest pace in more than two years. Output is back to the level it would have been had the virus not happened, notes research outfit Capital Economics.
Strong year-end demand for new iPhones and other gadgets helped, as exports of electronics and telecommunications products, which combined make up more than half the total, surged.
The bigger factor is President Tsai Ing-wens success in taming Covid-19: the island of 23 million people has not recorded a local infection in more than 200 days. Domestic consumption is improving, falling 1.5% year-on-year compared to last quarters 5% plunge, while gross capital formation and government spending are picking up, too. As other regions come to grips with fresh restrictions, post-pandemic Taiwan is looking healthier by the day. (By Robyn Mak)
LOCKDOWN LIFT. Rolling lockdowns in Europe could bolster the case for Unibail-Rodamco-Westfields 3.5 billion euro rights issue. The commercial property giant is battling activist shareholders including French billionaire Xavier Niel over its financial needs. Chief Executive Christophe Cuvillier reckons the $5.6 billion group needs asset sales and an equity injection to strengthen its balance sheet. The activists argue a rights issue is overly prudent and the company should flog its U.S. business instead.
Third-quarter results, released on Sunday, weaken the activists case. Though Unibail collected 79% of retail rent in the three months to September, up from 52%, the company expects net rental income this year will still be 30% lower than 2019. Many retailers may not survive another round of shutdowns. Investors will get a chance to vote on the rights issue next week. Preparing for the worst is more likely to win the day. (By Aimee Donnellan)
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Breakingviews – Corona Capital: Nestlé’s TV meal, Taiwan, Unibail – Reuters
