Air France swallows KLM for E784m in stock 30 Sep 2003 On paper, the deal looks decent. Factor KLM's turnaround into promised synergies and the return on investment may be close to 11%. But the synergies are not high enough to bring the group's operating margins to where they need to be. And the execution risks are high.
Eni’s Mincato sticks to his guns 30 Sep 2003 The chief executive of the oil group continues to come under pressure from politicallyappointed board members. The feuding illustrates the instability of the government coalition. But Mincato is a tough nut and, hopefully, will see it off.
Mediobanca’s ex-boss gets E1.6m for unused holidays 30 Sep 2003 That looks like 12 months of backpay. Vincenzo Maranghi can't have had much holiday while at the centre of the web of Italian finance. Concocting his elaborate scheme was clearly a timeconsuming job.
Public-to-private deals stall in France 30 Sep 2003 France has yet to see a publictoprivate deal completed in the year to date. The authorities may have tuned up the local takeover rules but they still pile too many obstacles in the way of deals.
SEC proposes light-touch hedge fund regulation 30 Sep 2003 Some will carp that even the SEC's proposal that hedge fund managers are registered is unnecessarily burdensome. But it is no tougher than European regulation. And it could even help clean up some of the industry's cowboy image.
Spain stamps out shareholder pacts 30 Sep 2003 That s a good thing. Most pacts are murky affairs, inimical to minority investor interests. But the change may lead to M&A battles as former partners fall out like Santander and Total have done over Cepsa.
Wrong to blame markets for Italian blackout 29 Sep 2003 It is also wrong to blame liberalisation and insufficient investment. The real culprits behind the blackouts in Italy, Sweden, Denmark and the US are politics and poor regulation.
Sainsbury pretty hard to gobble up 29 Sep 2003 Sure the UK group could be the real loser from the Safeway bid battle. And its lowly valuation reflects that. But while a financial player would be allowed to buy the group, it could have a hard time making disposals.
Dynamit LBO on the horizon 29 Sep 2003 Germany s MG Technologies may sell its chemicals group Dynamit Nobel, which would fetch close to E2.9bn in a privateequity heavy auction. If it does, MG shareholders would receive the rest of the business for nothing implying upside of some twothirds in the share price.
Barclays should decide soon on succession 29 Sep 2003 The UK bank has been conducting an informal beauty parade for the chief executive's job for the past six months. It is fine to be rigorous. But by dragging things out, Barclays risks losing senior directors who don't get the top job.
Morrison gets green light on Safeway 26 Sep 2003 Tesco, WalMart s Asda and Sainsbury have all been blocked. All they can do is bid for the 53 stores Morrison is forced to sell off. The clear run is good news for Morrison and bad news for Safeway.
CVC tries to compress Debenhams’ timetable 26 Sep 2003 The private equity firm is launching a scheme of arrangement. This provides a line in the sand for the end of the takover process. It also means that CVC doesn t run the risk of having to squeeze out minority shareholders. Its lending banks should be pleased.
Modigliani’s legacy: life imitates theory 26 Sep 2003 Arbs and hedge funds have gone a long way to create the integrated capital markets presupposed by the Nobel economist s theories. But applying Modigliani's insights unthinkingly brought its own problems: excess corporate debt in the bubble.
Nokia may have one eye on succession 26 Sep 2003 The Finnish mobile phone giant is reorganising its businesses to reflect the segmented markets they now compete in. But in rejigging the roles of key board members, Nokia may also be grooming talent ahead of CEO Jorma Ollila's possible departure in 2006.
Santander and Total go eye-to-eye over Cepsa 26 Sep 2003 Spain s biggest bank has bid E1.2bn to up its stake in the oil company. But Total has made no secret of its desire to own Cepsa. In the past, SCH has proved itself a master at extracting a rich premiums for its minority stakes. It is playing hardball again.
Fortis joins European retreat from US 26 Sep 2003 The Benelux bancassurer joins a growing stream of European firms that are bowing out of the US and returning home. This is all part of the new transatlantic M&A theme. In the 1990s, it was all about expansion. Now it is about disposals.
BSkyB must give time for CEO search 25 Sep 2003 There's still every sign that Rupert Murdoch wants to shoehorn his younger son into the slot rapidly. The best way to prevent this is for shareholders to pressurise the nonexecs to launch a thorough search not a quick rubberstamp.
H&M sales still weak 25 Sep 2003 The group s likeforlike sales are actually contracting, at least partly because it is holding so little stock. But the flipside is that H&M has managed to achieve recordbreaking margins.
Oil stocks continue to ignore high oil prices 25 Sep 2003 Oil shares currently discount a crude price of $19 a barrel. Yet OPEC has kept Brent well above that for the past three years. Assume that OPEC keeps oil at $25 barrel for perpetuity, or even just five more years, and the upside to share prices is considerable.
Colaninno back in the saddle 25 Sep 2003 A modest E100m or 31% of the equity buys the exTelecom Italia boss control of Piaggio, and a geared take on any upside he can deliver. But Colaninno has also managed to get himself some downside protection. The lower the valuation of the company, the bigger slice he takes.
UBS buys ABN’s US prime broker 25 Sep 2003 At $250m, the deal was small. But the deal offers a rare window into the economics of prime brokerage. More than a halfdozen securities firms were clamouring to own it, highlighting the growing dependence of investment banks on hedge funds.
Bigger bookrunners don’t always get fatter fees 25 Sep 2003 That much is evident in preliminary thirdquarter league tables for the debt capital markets. Some parts of the debt business are more lucrative than others. But some banks make more money than others on the same stuff.
France may still face fine over budget deficit 25 Sep 2003 France reckons it won t get the budget deficit under 3% of GDP until 2005. If so, it will have bust the limit for four years running. Does this matter? Perhaps. But the fine is merely a pinprick especially when compared to the Alstom loan.
Randgold goes hard on $1.8bn Ashanti offer 24 Sep 2003 Rising gold prices have done wonders for Randgold s share price, and its audacious reverse takeover offer for the Ghanaian group. In just six weeks, the value of its bid has increased by a quarter, while Anglogold s rival offer has risen by less than 15%.
Debenhams’ buyer has hard job ahead 24 Sep 2003 To make a decent return at 455p a share and above, whoever buys the UK department store will have to both boost growth and sell it on well. Permira's and CVC's bid battle has delivered value for the current shareholders. Whether it will do so for the buyer remains to be seen.
M&B=M&A 24 Sep 2003 A shake up is looming in the UK s pubs industry. The bidders for Scottish & Newcastle s pubs estate are keeping tabs on M&B. The group has yet to release details of its securitisation plans. Buyers will need to act fast, before M&B is effectively bidproof.
TUI takeover speculation overblown 24 Sep 2003 West LB s 31% stake in Europe s largest tourism company is up for grabs. TUI s share price has shot up on takeover speculation. But TUI s debt load will deter many buyers. The chances are slim that minority shareholders will see a takeover premium come their way.
Veolia follows Suez with US cleanup 24 Sep 2003 The French water group is removing the noncore bits of its US Filter arm to cut debt by E2bn. Veolia is streamlining its earlier acquisition binge rather than repudiating it, like former parent Vivendi did. Shareholders like the idea.
Cisco adds $7bn to buyback authorisation 24 Sep 2003 The lessons of the bubble are so soon forgotten. Why buy back shares trading on 36 times earnings if not to offset dilution from employee options or scotch calls for a dividend?
US dollar under siege 23 Sep 2003 The fall in the dollar since the G7 called for greater Asian exchange rate flexibility over the weekend looks dramatic. But the tradeweighted dollar is still far off the lows it hit in July. The dollar still has further to fall.