Cash Calls: A tale of two break fees


(The creator is a Reuters Breakingviews columnist. The thoughts expressed are their possess.)

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DECOUPLING. When mergers get heading, those people merging glimpse for certainty. 1 form of insurance policies is a crack charge payable if one particular associate jumps, say, for a much better offer. So it is with AT&T’s merger of its media belongings with Discovery. The bigger company’s split fee would be $1.8 billion, even though Discovery manager Main Government David Zaslav would have to occur up with $720 million. 

That is in proportion to the two companies’ contributions to the new entity. But Discovery’s decreased price would be more unpleasant, absorbing a 3rd of the company’s hard cash and leaving its complete foreseeable future in limbo. 

It could be worse. In Canadian Countrywide Railway’s bid for U.S. railroad Kansas City Southern, there could possibly be two costs. Canadian Countrywide appears to be to have wooed Kansas Metropolis away from an agreed merger with Canadian Pacific Railway. If it stays that way, the Montreal-centered operator will have to pay back the $700 million penalty crafted into Kansas City’s initial deal. But if regulators current-news/pr-21-22 will not likely bless the revised union in the promised form, Canadian Countrywide might close up paying out another $1 billion break charge, to the consternation of Chris Hohn of TCI Fund Management. Two break fees are absolutely not improved than one particular. (By Richard Beales) 

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Accor tends to make cheeky late verify-in to SPAC bash

UK’s Eurostar dodge misses a trick

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