future, we will look at who is next in line. >> gas deal delayed, russia and ukraine failed to resolve the natural gas dispute. street, we on wall will hear from carl icahn about what it means to corporate governance. welcome. you are watching "the pulse."

i am guy johnson. >> i am francine :00 -- francine e.ocke when is the board meeting? shortly.l happen very be someone from within the company. almost a tradition to have a ceo who comes from the action group. was onlyhe de margerie 63 years old when he died. you have the head of the new energy division, the chemicals chief, and the head of exploration and production.

these three are all from total and they are all engineers. all part of the executive committee of total. according to the french newspaper, the refining and chemical chief could be the most likely candidates. -- herted his career walked for total all around the world before coming back to the headquarters. >> he is the most likely candidate? that seems to be the sense i'm getting from the press as well. if you like the former boss? what do we know about him?

say. is hard to i chose him as part of the executive committee. what we called -- often traveling with him. organization -- it could be split. that is according to the french newspaper. betsy would only be cheering the executive committee -- chairing the executive committee.

>> where hoping to find out more about this. in the bloomberg managing editor. talk this through what happens next for the business. christophe de margerie was always trying to do deals. he was in the four corners of the world. are they going to carry on what he started? >> i don't think they have any choice. these investors are billions of .ollars over many many years they have to go where the oil and gas is. norway, they declined and

production. historicalhree places where they need to go elsewhere. they have a very large project in russia. >> christophe de margerie was very statements -- statesman like. oil prices are going down in russia was key to that. and imprudent is clean to that utin is key to that. if you look, before they made the investment, total produced 8000 barrels a day. in russia it is now 200,000.

gas, gas prices have been growth in russia. total is writing not. eiding that. -- riding that. personal?h of this is chemistry? >> all of these -- anybody who supports an oil company is going to know how to play politics. they don't know how the game is played. >> what will be the biggest challenge?

his number one challenge with a -- this has been a big achilles heel. the joke was that they could not find petroleum. christophe de margerie had been criticized for this. >> thank you so much for all of that. on, heineken reported numbers today. now.chilcote joins us beer thatless

investors thought they were going to sell. there were some bright spots on the earnings, asia, they say growth is continuing. they can rightfully blame the weather in europe in the months of july and august. when it is raining, people do a lot of people are looking at these earnings and wondering if there is something more sinister going on. >> ryan chilcote, thank you so much. the european commission is expected to tell five eurozone countries. this is the eu. ask for more details. .step ould be the first

-- yourget deficit daddy must not have exceeded 60%. italy, debt to gdp, north of 130%. even michelle has come out and said, you could not refuse the budget. he does not think the eu can do that. minister was saying

there is no way they're rejecting this. .> jodi is pretty determined now you decide you do not want to play by the rules. what happens on the politics on the fiscal side affects what the ecb wants to do. >> today is important, but it is next week that is really important. >> it may ask a few more people to vote right wing.

wantat the budget or do -- mr. gallant does not question in front. the budget deficit is north of .% credibilitylast when the euro was first created and broke all the rules. pressure from smaller countries who have stuck to the rules. making sure their economies do fit and. italy,u have france and they make a third of the

eurozone economy between them. >> it builds up to $27 and -- you maycan but not have a u.s. to talk about. the pressure not just on france, -- push them to the private this is the five-star movement. you have the ecb and next. >> we are not quite year -- quite there yet. >> we will take a break and talk about ebola effect. whether it will

rain on the early season ♪. ♪

>> good morning. you are watching "the pulse." heineken sales missed estimates today. development of its ebola vaccine is progressing at an unprecedented rate.

every rainy season, there is something people talk about. .ast time around, it was russia did to hearst or them talking about it. we have seen the carnivals of this world taking a big and -- meeting how concerned do in need to be about this? we have been living with this threat for over six weeks now. it will still be there in the background until it is eradicated entirely.

travelers have their own sentiment of the sanctity of travel. another hook for companies to hold on to. what could the catalyst the? -- be? point does it mean that companies will see a led lower. that is the big question. if we listen to the comments --it does not seem to be an outbreak. there are scaremongering rumors and that is what is keeping the story alive.

companies will see a led lower. that is the big question. >> we know the kind of company is going to be. no surprises here? >> quite apart from the heineken, we seem to be blaming what whether as anything else. to some extent, the regional impact, the imminent by no the imagination.

>> sometimes the markets are not very sophisticated. anymore industry groups you would stay away from. >> sometimes the markets are not very sophisticated. you have a couple of the bigger companies with a big presence in russia. well.ht be as in terms of the bottom up approach, it is a question of a -- perhaps the emerging middle class in asia, perhaps we .ay the bills >> nice to see you, richard. thank you for stopping by. activism on wall street. andill hear from carl icahn

steve miller about what it means for corporate governance. it is a conversation you don't want to miss. ♪

>> let's focus on food. italian foodies have something to celebrate. prices for wine truffles have dropped because of a very good harvest.

>> on the hunt for precious commodity. finally after hours of searching through woodlands, a stroke of luck. for this well-trained italian pointer, the unmistakable smell gives it away. two.is the italian cap because of recent weeks, it has become affordable. heavy summer rains have led to a 30% increase in the number of truffles compared to last year. 100 grams of this culinary goals . a cheaper wine truffle means

more buyers and a jump in .isitor numbers to the reason the local economy is very dependent on the travel business. spent 20% more in the area. >> you're going to get all italian on the right now. >> it is right next to our live in italy.

do i get more truffles? does the truffle dish cost last? -- cost last? research. of market indead flat on the dax germany. a big move yesterday on the speculation that the ecb could be thinking about buying corporate debt in the eurozone. it there isenying no such plan. a nice little support for stocks. it has been a support for peripheral yields to new -- move higher. 2.4 percent?italy

what would happen in europe? would we get a similar movement? we could all pretend that everything is rosy in the euro. down by a quarter of 1%. bank of england, 7-2 was the vote to keep rates on hold. the eurozone slow down in the that cameissipate after this meeting. >> three minutes and 30 seconds until that drops. >> it is the interview you don't want to miss. .e are live

that is a little bit later in the pulse. >> we will take a break. ♪

>> welcome back. we are live from bloomberg's european headquarters in london. bank of england, the other seven keeping things where they were. these are the minutes from the last meeting, tied with a nice in terms of what else we are getting. economic outlook has leak

in -- weekend. i did not think there are any massive surprises. >> we are taking a little bit of a leg further john. -- further down. the wedge growth numbers slightly picked up with the latest data. >> we have talked about lower rage growth. i want to bring in stephen barrow. thank you for joining us. this is a point we were making. this is before we had the bad news in the economy. >> before we had the mini meltdown. -- 7-2 not alow

good bet for the next training. what theylisten to were saying over the weekend, he was not -- him i'm not rebound over the two years horizon. >> they are breaking up. better to anticipate labor market pressure. he is saying he will hike rates before you see wage growth becoming embedded.

-- whole conversation the cpi outlook did not justify a rate increase. will that play into the hands of the majority even further? forhe key is what he does expectations going forward. more closely to the movements and the concept -- in -- they were racing rates. under 2%. even if it dips below the level,

the 2% vacation right caused. probably will not change to dramatically. in a few months time, if things the cpinged with you, has to do with oil prices. three or fouring weeks really stepping up. are you looking at what we had a year and a half ago. mgm was a specific show, supermarket wars, a relatively robust sterling. it is not just about oil.

this is going to be concerning to the bank of england. who is going to blink first -- we are seeing august 15 now. we have come back in a little -- is that arket

reasonable number place for the third base hack? fed, it istapose the easy to see the bank of england is more likely to eat first. because so many companies and the boundaries matter less, the if u.s. stocks got back to the plunge we saw .ast week

as much as we can argue the the the eurozone does not matter that much, it still matters in the financial markets. >> thank you so much for all of that. stakes,ure raises the -- russia raises the stakes. what does this mean for energies meant -- what does this for everyone? ♪

>> russia and ukraine failed to reach an agreement on gas supplies for the winter. moscow and kiev will try again next week. how bad is this situation? >> nothing good here because the expectation was that these talks would deliver a result. an awful lot of serious investment. you have the head of the energy wings of russia and ukraine withng at this discussion the you could -- u.k. commissioner. week innd of last milan, the big focus was getting

-- ited in the animal looks like the issue is russian. to pay down some of their debt. the ukrainians do not have any money and are turning to the europeans. you prepaywhy don't -- someone has to pony up the money. when does that happen? >> the older he gets, the more likely someone will come along with the money. you can argue the strength

against the russians hand. the situation is that europe is pretty prepared for a supply cut. be athink it is going to short one. look at the reserves. 94% full. map, an handle the .upply cut a supply snap and a cold front, watch the weather. i was just looking at the weather every night this week. it will be freezing temperatures in the evening and they've got no gas. they are doing creative things.

europe this comes to along the terms of spy disruption. >> thank you so much. ryan chilcote with the very latest. ina stake that it held tesla. it is receiving $780 million. the german car company says it will continue to buy features. >> a change at the top of supergroup. realtor, previously, it he was co.

the company is planning to separate the paypal business from its online marketplace. we spoke with him about the company ceo. >> ebay is very interesting. strange, iounds job, he wants to do a good but he has made a lot of errors. area that was just made now, which is more telling than most people do, if she is out for apple pay -- released sales that beat in third quarter estimates. receives.yer

good.mbers are looking >> the first time we had to speak out saying the company sent it to aol. people were losing faith. >> a real help from ali baba. the amount of cash going back to spend what marissa talked about yesterday. million in after-tax this to the company. we have been made to promise we would send back at least $3 million. thathave more than half of

on the mobile. their bread-and-butter, they're still losing out to facebook. >> everybody looking at the company and they use it as an opportunity. now that is beginning to disappear, the pressure starts to rise on her. at the moment, she is facing this one down. don't worry about it, i've got it. fact thated about the you have such big stakes in alibaba, sell them in a member bestpaying -- we have the minds the board looking at this and we will manage to write you

are overall tax burden they said they might do spending. the next words are exactly how they say. they're going around splashing $1.6 million. you're basically buying companies for the leadership. a billion on tumblr is not a million? eyeballs --ting

this is what she is trying to say about the overall company. i thought this was a really interesting take away. they spent more than $7 billion on share buybacks. she is trying to woo the investor base over. back 24% of my overall shares and that is good for you. those kinds of businesses are flashing the cash as well. >> we know what they can do to the markets. activist investors, we will

have a great conversation about that coming up. >> we will continue this conversation with activism investor, steve miller will be talking to us a little bit later. he sits on another of boards and where is a lot of hats. joining the show in the second hour. ♪ joining the show in the second hour. ♪

welcome back. you are watching "the pulse." companies are doing more to fight climate change, financially outperforming as result. paul simpson joins us. he is the co and cofounder. data that islatest coming out. you have aggregated it. who is good? who is back? >> the best companies are producing superior market

performance. some big companies, apple, google, bmw, bank of america, samsung. these companies have been acting on climate change for a while. >> do i need to come to you to get this information? how much of this information is freely available anyway? >> we collect this data on behalf of investors. the information is made public through us to those investors and also on our website. increasingly, companies are beginning to include this in their annual reports. amazon not part and parcel of the survey. is it a regulatory requirement that companies produces kind of information?

it.e want to know about why are they not telling us? >> the investors should be asking those questions. amazon, comcast, facebook, berkshire hathaway. there probably not well prepared to communicate it to their investors. there may be a risk they are not aware of or they are hiding. there seems to be regulatory pressure and the u.k. -- in the u.k.. haveom now on, companies the regulatory requirement to produce this stuff? report theirto greenhouse gas emissions in their annual report. the county director -- the accounting director is bringing

in more requirements. it will require them to report on environmental risk. -- a what we classify as it was my carbon footprint. are getting more sophisticated in understanding what companies are doing? started in the ways of marketing. now we are looking to the real product to the investment. billion.nvesting $33 it is getting more tangible. we are looking at the actual steps they are taking.

>> nice to see you. thank you for bringing it to us. >> for those listening on bloomberg radio, first word is up next. for our viewers, the second hour of the pulse is coming up. steve miller will be talking about shareholder activism, aig. we will focus on shareholder activism through the eyes of the yahoo! ceo marissa mayer. more. that and much we will be talking about ebola, heineken earnings, and what the market is looking at. you can follow was both on twitter. shortly.ee you very ♪

>> first off, future at the board meets. we're going look at who is next in line and the company's challenges. >> heineken gets watered down. the dutch brewer missesest mats as europe continues to try to grow. >> and we will talk with steve miller about what it means for orporate governance. so good morning to those of you in europe and asia and warm

welcome to those just waking up in the united states. i'm guy johnson. >> and i'm francine lacqua. this is "the pulse" live from london. >> so total's board meeting after the death of the french oil giant in moscow. they will approve the new c.e.o. let's get to details. joining us from paris, so the board meeting this morning. >> the board meeting is happening right now as we speak at the total headquarters in france. then of course the candidate approved by the board will have to be approved by the shareholders. but it's more likely it will be approved from inside and something he he must wanted. there are three names at the moment from within the group. phillip, the head of the new energy division and patrick

pouyanne the head of refining and chemicals division and finally breuillac, the head of production. many say patrick pouyanne is the most likely candidate, the head of the chemicals and refining division and many say he has been groomed for the job. >> so who is the most likely candidate at the moment? you were talking about who it is, but how much do we actually know about him? >> so patrick actually started his career as a public servant in the early 1990's working as the french industry ministry and then joined total in 1997. he was responsible around the world for different total divisions in angola, africa and

qatar and has been the head of refining and chemicals since 2012. when we say that he is being groomed for replacing christoph dimaggeo, he was actually on the executive committee with him and has been following him around the world in his different meetings. it's a very delicate time for total, because they have to sell assets. they are planning $10 billion in asset sales in addition to the $16 billion that was already done and christoph was responsible for selling those assets which was important at the time of vol tile oil prices and pressure on refining margins. >> thank you. we will look forward hearing more from paris. >> now let's bring in tim

coulter, bottom's editor at large so tim when you look at of ompany and exploration the company, what's the big challenge? >> continuing the large investments they have and finding new ones to make. the company has not done well in exploration. most of the big projects have been bought. most have come from russia. they have invested alongside tim chango who is is good friend of vladimir putin's. they were almost nowhere in russia five years ago and now they are getting quite big. >> in sense of the challenges you they are having to face. he was going to be sticking around for some time and these

guys weren't expected to step up for a little while. they are stepping into the main stream. they have -- there are significant problems, the oil prices are coming down making things less economic. the scale of the challenge they are facing, can we get our arms around it right now? >> well, yes. russia specifically targeted the gas sector and one of the largest investments they were looking at was an arctic project in the far north. so there was some question about whether or not if sanctions get worse whether or not they would be able to proceed with that. >> and the fact that christoph was so different and very statesmanlike and really liked by a lot of the politicians. is that going to be the trickyest trait the new c.e.o.

either has to work on or has naturally? >> well, we'll see if. if it's true that patrick is going to be the new c.e.o. caroline did talk about his experience. that's a lot of it because they have a lot of projects going on well. goala and qatar as or national oil companies governments so inextricably linked. i remember when b.p. went through a whole true of c.e.o.'s and many were worried about the connections, because they all had connections and were they going to go away once they departed? >> yes. you can't just build a factory wherever you want.

>> and you have to be politicallies institute and you were mentioning the new possible c.e.o. had exposure. and if you look at the qualities, again, you have to be a very fine operator. >> yes. it's a very fine balance and certainly dimaggio leas a very big hole to fill. >> is it norm to fill that spot from inside the zphean you would nomplely reach inside but is it one of those sort of things that because of the politics and because you've got to understand the resources and details of what's going on in some of has to projects that they are hard to manage, and the economics of them are hard to get your head around sometimes, do you need to get a guy from within the business? >> the oil company is different in that they particularly love

building from within and especially the largest oil compleans routinely grow from within the company and if they went outside it would even be considered a sign of weakness. the mining zri is different. >> yes. >> tim, thank you so much for all of that. bloomberg news, editor at large, tim coulter. >> let's talk about what else we're watching this morning. heineken fell short blaming the webber. let's find out exactly what's going on with the weather and beer sales. what happened? >> bottom line they sold less beer than investors thought they were going sell and less than during the same period last year. i mean there were some bright spots in the earnings. there was bad weather in the first two months

of the period and it is true it e drink less beer when is raining. having said that we kind of knew about the weather. so that is a lot of analysts's concerns that maybe there's something more sinster going on here. with european earnings being a little more fundamentally flawed because of a changing economic backdrop. >> what you've got to look at is we have heard from s.a.p. and phipps. phipps, as you know said they were experiencing trouble in rush i have a and in china but they are also seeing slack deand in europe. now we have this miss. in just a couple hours most less than two hours we have glaxosmithkline and then we will get an update from unilever.

if you look at the share prices this morning, it has, after those earnings came out this morning from heineken, it's crept down a little bit. perhaps reason for that is expectations from european companies -- if you look at the stoxx 50, for example. analysts'ist mates were expecting something like two euros, a few cents different from 2014. so there is concern that perhaps one thing that's changing quickly and unpredictably is the european economy, because really nothing changed that dramatically over at heineken. to get people to put down those beers. >> brian, i'm still slightly grappling with you sitting in the rain drinking the beer on your own but the anybody south

london see that, join him. >> yes. it would be an entertaining conversation. >> ryan, thank you so much. on heineken. coming up, yahoo's mercya mire pushes back on activists. after the break. >> and he has just arrived in the building. we will talk about investing with steve miller. find out what it means for corporate governance. we're looking forward that conversation. ♪

>> welcome to the "market pulse," live from bloomberg's european headquarters near london. with sales and profits rising this as the c.e.o. looks to calm concerns on the future isposals of its alibaba -- caroline hyde is with us. first of all, fighting talk because of activist shareholders and sales that were bad. >> yes. they turned up at 1.5%. and we saw profit up. that helps larlly by the alibaba sales. we've seen growth mobile. it was purely a p.c. play which he took the he will new mexico 2012 mercya mire. but now they have more than half of that so clearly they are growing in certain areas

and basically filling in gaps. the bread and butter, thed a display the fact that they sell to tigsing businesses. therr losing out the facebook and google. >> selling alibaba, great, because obviously it crystallizes a huge amount of money for them but nevertheless they were to an extent a proxy. you couldn't buy alibaba, so you played it through the proxy, through yahoo. the pressure increases. >> yes. they had 15% still but when you have activist investors saying split the company in two and one parrot the alibaba and yahoo japan stake and the o rt of yahoo on its own, that exposes these companies because people can see they can sell it off entirely.

34 are worried about the fact that when they sell a 157 snake alibaba they are going to pay a huge amount of tax. they spent 37.5 billion in taxes. saying we have the best heads in tax in-house trying to work out at the moment on how we reduce that burden. the other way is you said france was in fighting spirit many thought she was spending $1.6 billion on companies that don't really fit. sit meant to be growth for yahoo going forward. she said look, stick with us. we're spending wisely. >> we have a strategy for billingd m&a opportunities. we will continue and be smart bout it.

>> they are looking to spend more on a.p.s like snap chat and clearly they are on the acquisition trail. many want to know will they be using alibaba tax money to buy that but she said we have been sing that money ono things trying to show they have investors' best interest at heart. >> richard, post alibaba, what do you expect the pressure to mire?e on marissa sit going to -- is it going to only sbrass from here? >> yes. when you sift through the numbers, she said revenue growth will come back neighbor some time 2015 but the forecast

is revenues are going decline again, about 4% year over year. so while there's still lots of promises, there's nothing in the real numbers that are encouraging as far as i can see. >> is there anything that's encouraging? richard? >> yes. a couple things. when it comes down to the company's zakes strategy, i'm actually behind marissa on this one. the real issue now is she has got to put those companies together and all the experiences together in a coherent way that's uniquely i can't hamilton that's how you general trait kind of value that investors are going to spend money for. if you look at how google does it. google it'sal -- google is 15 times the size of yahoo but -- growing fast which is

it shouldn't be. >> because of the share structure. it's not google or facebook. different share structures easier to manage from their point of view. the technology is older, it's got to go out and gather and buy new technology and bring it in. why would i thrown business? > because when you look at the absolute fundamentals the company has, and you look at what potential thirty company is able to do with those assets, in terms of creating where people want to spend all of their digital lives, yahoo has got one of those potentials to create that out of all the other people now fetishes yahoo can do that successfully then the upside in materials of revenue growth is significant.

and if you look at it, the company is also substantially growing too. >> what do you make of hoe tone? if you step away from sfreage, her tone was something of fight that says to her activist shareholders, back off, i have this one. >> i'm sorry, did you catch the question clearly? >> the question was that she seemed to be in fighting form. where does it leave her shareholder activists? >> well, i think if you look at her commentary i think she has pat band-aid over some of the investor commentary and investor concerns and in her acquisition strategy i think that's fine and return of cash to shareholder sincere also fine. and i think she has bought herself a little bit of time. but the problem is she has to translate all these promises she's made into revenue growth.

if that doesn't turn, all these questions are going to come back at her in early 2015. >> it's always been the proxy for alibaba, how should we think about yahoo now? you've run through the acquisitions and opportunity. that what is yahoo? what is hit that is unique about this company that makes me want to own it? because until now the reason i've owned it is because i need position in alibaba. that seems to have changes quite significantly, it's quite e event alibaba from mercy from marisa meier. >> well in the recent i would say you wouldn't want to run on this company, basis if you look at where the focus is going now, it's going on to the core business and i'm still worried i can't see any sign of any of

this change rissa is putting into this change and if that doesn't start to change soon i invest in it. >> do you think, one final question, richard. do you think she is in for the long game here? do you think she is going stick around and see this one through? do you think investors will let her stick around and see this one through? the alibaba is only going to have increase scrutiny from here. what other timeline should i think about? >> great question. i would have thought another two or three quarters. you know, she's made this sort of promise before and made it in the display advertising business a year ago and saying now we're starting to see real traction in display and it

didn't happen. she's made this promise again, it should come through in revenues. 23i9 doesn't happen in the next two or three quarters, the investors might say we've had enough. >> richard, thank you. i said that i thought he was going to say two or three years but actually two or three quarters. she is going to have get on it. >> we will continue the tech discussion when we come back. ♪

>> welcome back. critical what's happening in the currency markets. we've got details out from the bank of england. regarding the october meeting. we were expecting a 7-2 vote and that's exactly what we got, what we also got though was i'd be line beginning to produced from the majority. they are concerned about what's happening in the euro zone and concerned about export growth and weak price pressure and low wage growth. the same seems to to be reflected that neighbor rate

hike from the bank of england sland being pushed back ever so slightly. after the break we will talk about shareholder activism. steve miller will be joining us for that conversation.

>> welcome back to "the pulse," live from europe's headquarters i'm francine lacqua. >> and i'm guy johnson. these are the top headlines. talks have filed reach deal sealling the energy supplies before winter. the nation is now demanding that the e.u. provide noun coffer outstanding ukrainian gas bills. russia and ukraine will seek a temporary deal next week.

>> total may appoint patrick pouyanne. the board is meeting right now to appoint christophe de margerie's successor. mr. pouyanne currently heads the refining sector. christophe de margerie was killed in a plane crash earlier this week. >> and the majority saw increased risks from a slump. and minutes from the last meeting showed two members wanted to trays rates by 25 basis points and others voted to keep it at a record low although the vote actually came before more bad news, especially with the inflation number. >> and the markets' turbulence. >> let's talk about the markets' turbulence.

the billion snare now pushing for ebay to produce an outright sale of its paypal unit. >> ebay is very interesting. because i actually -- i know it sounds strange, i sort of like donahoe. i think donahoe really wants to do a good job. he wants to enhance value but he has made a few errors. he made an error keeping an driessen but that was not the major error. the error i think now is more telling that most people do is he is out of the apple ecosystem and apple pay. >> this as marissa mayer pushed back from apple's star board value. >> now, let's talk about all of this with a man who is familiar with all this. steve miller, a.i.g. non-exec

manager. activism is not new but certainly seems to be front and center right now. companies are looking for ways of working with activist shareholders. how would you describe the relationship right now? obviously there are some interesting cases out there. >> well, activists have been around for years. but for most of those years they were ignored or heavily defensed by boards but what's happened in the last year has been breath taking with the rise of activists star board for example which was mentioned completely took over the board of darden restaurants in the u.s. and all 12 members of the board were replaced in an election and that's kind to have high-water mark for activists intervention in corporate affairs. >> why is that? is it because companies have been doing less well or shareholder activists have been better outspoke season? >> i think their p.r. must be

good for starters but basically they have good ideas and it needs to be considered pro actively when an activist shows up on the scene. i think what's different is the activists act much under concert and shareholders are more willing to listen. that's what happened at darden fetishes i.s.s. backed the star board bid and allowed home the sweep the entire board. >> sit always a good thing? >> not always. the question that a board has louing is, is this just a a quick pop in the stock so the activists can cash in and get snout or is it -- that's why boards sometimes resist for the right reasons and that's why not all activists need to be considered as equally good or bad for that matter.

you have to listen to their ideas and then decide as a board whether or not it makes sense. >> they don't own anything about the quick buck turnaround. >> in my mind the best example of a shareholder activist was ralph who was diagnosed as throat cancer and resigned as his position as chairman and head of his institution and they are selling off their holdings and they are done. and i'm very sad for that. not only for ralph, who is a personal friend but just because he was the role model of someone who is highly constructive. he seeks a board searkts gets into the boardroom but is not there to be pompous or prove a point. he is there to help the company be better. >> carl icahn, as a case in point.

the letter he pushed out weeks back was basically to me a side -- note. he has his motivation but basically it was a by side note. he wants to see the share prices go up. how do you sthrue? group. ay it's a p.r. >> well carl icahn used to beal thought of as a black cat, out for himself only, because i was running a position at mollingal and we gave him a couple of board seats so he could do it but a lot of what i read about carl icahn is he wants to company to lever up, buy back its shares which drives up the share price in the short term but it may cause financial problems going ahead. so i don't always agree with where he is coming from. >> he doesn't hold big stakes in some of these companies.

>> that's what's changed so much about the game here is you don't need a big stake. look at value act with 1% at hike soft able to get board seats with with a 1% holding. >> but how is that possible? >> because the boards now know and other shareholders will join in an attack or recommend tchation seems to resident nace@and make sense and that didn't seem to be the case. now they have become very powerful, because the -- it's the herd mentality. >> we were talking about marissa mayer earlier on and it's interesting that she is being faced with pressure to sort of look at other activist it's. >> but if you look at the companies like facebook and google video adopted, it means that founders and senior executives are never going to face that t kind of pressure

say marissa mayer is. >> do you think that's the potential for activists? >> well, the best reaction against activists is to listen carefully to what they have got to say and pick the best of their ideas that make good sense for the long-term health of company. you're not just reacting or trying to drive stock price or threver company based on today's situation only to find out that the afternoon you run out of balance sheet liquidity. you have to make wise decisions as a board and pick and choose among them. but the important thing is u got listen to them. because if you are not listening to them and they are not making sense, they will be overrun. >> do we need more shareholder activists in europe? when we look at a lot of companies here, they are not as big. but there's no real shareholder activist nation can get story

moving along. >> i can say there's a couple things in europe, the american model was moving along. shareholders all have equal vogt power. i don't know if it's still true but in europe you had different classes of shareholders which were designed to further entrench new shareholders and without much seniority being able to make much of dips. so that would change so i would say in europe there are some things europe does better. for example, here in britain you are required by law to separate the chairman and c.e.o. because chairman's job is to look out for the shareholders. you've got that natural chain. so i'm in favor of splitting the roles of chairman-c.e.o. wherever you can and in britain it's easy because it's the law. so that's one example of making sure that the shareholders have a stronger voice not dominated

trong c.e.o. >> to france's point they need shake up more than america does right now. >> i would say they need shake up. on the other hand the americans are more totally focused on simple financial measures of success of the company. in europe, they are all about the what you call the sg something or other, sustainability, the governance principles and gender equality in your boardroom and in your workforce. environmental concerns and all much weigh much more on the boards of european companies than on the backs of the american companies. >> do you think they are good things? >> yes. and it makes the job of the board much more complex because fundamentally you're there to serve the owners of the

business but they are-all also human beings who who wanted to be proud of who they are and where they invest wrand they live. so it's a balancing act. i think europe is ahead in terms of that. >> take the gloves off. you're mr. fix it of wall street. what would you come in and fix? >> that's way too hard to answer that question. there's a lot of european companies that really i do admire and i think it's less of a problem. i think in the u.s. we have had companies that do need shaking up, and i think the activists movement has been extremely constructive,ened it will come here to europe. trust me. it opened on broadway, but it will be here. >> [laughter] that's a very good way of putting it. thank you so much for now, steve miller. >> plenty more to talk about. i think there were six things on it, we have only done one of

them. the conversation will continue after this short break. we will be talking to receive steve about what's happening at aig and more after the break. ♪

>> welcome back. a.i.g. non-executive chairman steve miller is with us for an

exclusive interview. >> yes. let's talk about what's happening at a.i.g.. 24rst something of a hubbub in the states about the case being brought by hank greenberg. i'm not going to ask you to give us your verdict on the case but -- can he win? >> it's entirely possible he can win. the reason is because in the u.s. no matter how unpopular the cause, you do get your day in court and he is arguing it on constitutional grounds that the government did not have the right to take as much equity as they did as part of the price of the bailout, and particularly his case is based on the unfairness that all other institutions got bailed -- without a similar without taking of the equity from the shareholders. so the stock holders remained

in position but in a.i.g. hank was saying the government took 92%. >> was it? guy said he wouldn't ask you. i didn't. >> no. i don't know how it's going to come out, because it's a highly-technical constitutional question that's being argued on both sides. by the way. hank asked the board of eighth tige participant in the lawsuit and he declined to participant. we were concerned about the merits of the case and the damages that might follow but the mere processing of the case might bring such raw, emotional reaction to the crash of 2008. that it might hurt our business more than it would help us to be a beneficiary of the suit even if we thought it was going to be successful. >> let's talk you to switch hats and talk about mr. wilber

ross. a lot of people are interested to see what he is going to do next. can you give us any kind of sense of the direction of travel here? >> well, first off, ross is an amazing human being. the man who invested in the steel industry in the u.s. when it was down in the dumps. i sold him business that became an important part of what's now a as i normal ma thol. so he was very successful at that and i salute him for that. but he is still young and one of the most energetic investors i've ever met. joined the of his newest venture, a blank check company that means he's got $500 million in shares sold on twost investors who just say wil burks here go invest for us and

call us when it's over. we trust you. >> that's an incredible attribution to his quality. i'm on his board here in london. sir willy aboutster is a member of the board. and we are looking at a number of investment opportunities. it will be a single large investment. u got $500 million in equity you can apply and borrow money. >> europe is looking distressed at the moment. >> and there are several european things on our throist consider. we would not rule out banks. banks is where he has been successful. in ireland ando places in the past. >> are you concerned about a euro breakup? i mean it was on the cards two weeks ago and went away and now in the last few weeks there's concern there. >> actually, i've been at a

couple of conferences recently talking about the threat to the euro. personally i think they will figure it out. i mean, it's always a ghost to look at. but the destruction that would come in the aftermath of a breakup of the euro i think in the long run would scare everybody. just like the big issue a few weeks ago was whether scotland was going to pull out. finally their head overcame their heart and they decided to stay as part of the u.k. for the same reason i think the euro zone will figure it out and hang together. 24r6r i would be prepared to participant in the distress confidence with -- >> a lot of the m&a has been driven in europe by tax reasons. either big u.s. companies that don't want to repate yate money back into the united states or they are buying mirror

companies so they can take advantage of the tax story elsewhere. how much a mess is the u.s. tax situation that we end up like this? >> well, the u.s. tax situation is a mess because it's a combination of very high rates and all kinds of loopholes and exemptions so the actual rate you pay may not look anything like what the stated rate is and one of the biggest difference sincere your overseas rangers not taxed at all and i don't think they should be. think fur taxed in the jurisdiction where you make the transaction, that should be enough. my analogy is like there's a fire in the theater and the political response is let's lock the doors so nobody gets out. instead they ought to put out the fire and bring down tax rates where it's level with the rest of the industrialized world and then there would be no reason for people to leave

for tax rvens. if you leave it the way it is and still have punitive tax rates on u.s.-owned businesses all of our major corporations will be located overseas. just bought t.r. wument in my old stomping grounds of the auto parts industry and that will have a big effect of the the reductions in overall taxes. that's a crime. and then even with stable corporations they are afraid to big their money home to invest it because the punitive tax rate comes right off the top. so it's much easier for a foreign cooperation to make those investments. >> i think we got through three out of the six. but you and i have got a half-hour conversation downstairs. > and then he is coming back

for the big scoop. >> yes. steve, thank you very much indeed. steve miller. p next the ebola effect at j.f.x. gets ready to report the bottom line. that's coming up in a moment. ♪

>> welcome back. here's what's happening with the pound.

est mats out this morning. exactly as i anticipated, 7.2. but we sense the tone may be changing in europe. a little bit more cautious on what the spound doing to the export story. sterling may be pricing out a little bit of the rate hike so, perhaps we are seeing that pushed out foote. the pound was already going lower but did react to the numbers and we hit our lows aerialier and we've popped a little bit since then. >> after getting the breaking news, we talked a little bit about the budget deficit and today we understand maybe the day where the commission asks for more details on the budget assets. the french president saying france needs to twins e.u. on their budget plan. this seems to be not that much fighting talk. certainly we heard from the

economy minister and prime minister and they were like no. it's not that we have to convince them. this is our budget. accept it or -- let's see. whatever happens. >> so caroline hyde, what can we expect? >> third-quarter earnings. we're expecting sales for glaxosmithkline to fall by almost 1/3. of course they have u.s. sales disappointing due the chinese bribery scandal that hit the company to the tune of almost 300 million pounds. 34 thought annual sales and such will be down and we will see profit down by some 17%. so we want to see how the recess pri tori drugs are doing. >> and we will talk ebola.

that comes out at midday in an hour from now. now that's it for "the pulse." >> yes. "surveillance" is up next. have a great afternoon.

>> this is "bloomberg surveillance." a spearge evaluated for ebola. and the c.d. goes in 1et67 for

a better protocol. i.p.m. and coke and even mcdonald's go in search for a new strategyic plan and looks ke barbie or miss gaga a superstar you don't know. yes. good morning, everyone. this is bloomberg surveils live from our road headquarters in new york. it's wednesday, october 22nd. i'm tom keene. important top stories this morning. let's get started. >> in newark, new jersey, an airline passenger is in the hospital being screened for ebola. the passenger arrived an flight from liberia that went through brussels as the obama administration rather thans up ebola screening procedures and now anyone from a country hit by that disease must enter