Month: June 2004

Cazenove profit trebles to £42m

30 Jun 2004

But this was in a rebound year for the capital markets. And Caz s return on equity remains unsatisfactory. Caz says it s benchmarking specific takeover proposals against staying independent. It needs to raise the bar.

Virgin Mobile to tap stock market

30 Jun 2004

Sir Richard Branson will rack up a big return on his initial investment in the UK mobile virtual network operator. But increasingly tough competition may pressure the unit s margins. This threat will cap the valuation.

Can Goldman keep a confidence?

30 Jun 2004

The question has been raised as a result of a sidesquabble in the current phoney war for M&S, the UK retailer. The facts aren't entirely clear. But, prima facie, Goldman s behaviour doesn't look good.

Iraqi handover reduces geopolitical risk

29 Jun 2004

The US finally has the makings of an exit strategy. No wonder oil prices are off their highs. But risks remain. Not just in Iraq, which has to get past an election. But also in Saudi Arabia.

Publicis should avoid buying Grey Global

29 Jun 2004

Controlling shareholder Edward Meyer s decision to sell USbased Grey is unlikely to tempt Maurice Levy, the chairman of Publicis. The US is leading the ad sector s recovery, but Publicis already has substantial exposure there. It should expand in other business areas.

Bayer’s buy of Roche unit makes tactical sense

29 Jun 2004

Such a deal would bulk up the German conglomerate's OTC drugs business and reduce combined costs. But the deal must not distract from bigger strategic issues. The company needs to be broken up.

UK wage inflation is on the rise

28 Jun 2004

But policymakers shouldn t react by thinking this is another reason interest rates need to rise. Higher wages are mainly the sign of a healthy labour market. To make it still healthier, the policy response should be to improve skills.

Watch out for second half US slowdown

28 Jun 2004

The US economy has been running on every possible stimulus, but the latest numbers are a bit discouraging. The US is the most interestrate sensitive economy in the world. The second half of 2004 could hold some negative surprises.

John Thornton is NewsCorp’s independent director

28 Jun 2004

He may satisfy NYSE rules about independence, but the former Goldman Sachs president has links with Rupert Murdoch going back over 10 years. That may make him an asset to News Corp. However, it is hard to see how he can independently represent minority shareholders.

The M&S boss has tarnished his clean-cut reputation by buying shares just after receiving a call from Philip Green.

28 Jun 2004

The UK retailer s boss has tarnished his cleancut reputation by buying shares just after receiving a call from Philip Green. The reputational damage may, at the margin, harm M&S s defence against a possible bid from Green. The reputational damage may, at the margin, harm M&S s defence against a possible £8.4bn bid from Green.

Shell gets a wake-up call from investors

28 Jun 2004

The oil giant managed to pull through all its resolutions at the AGM, but not without embarrassing protest votes. Even so, Shell can t ignore calls for change for much longer.

Bank of England warns on hedge fund herding

28 Jun 2004

By following the same trades, funds risk delivering disappointing returns. And that could make investors pull out in droves. That may or may not pose a risk to the system. What is more likely is that investors will question hedge funds bumper fee structures.

Cazenove shouldn’t necessarily sell itself

27 Jun 2004

A goitalone strategy might be better. But only if the UK broker is able to engineer a cultural revolution. That may be hard. But a cultural revolution will certainly happen if it sells itself to Lehman.

Discontent with drug makers creates buying opportunity

27 Jun 2004

The waning popularity of drug makers has slammed profit growth and left them open to costly lawsuits. But the damage to drugs stocks looks overdone, and reputations are probably at a nadir.

National Grid looking at £1bn broadcast tower buy

25 Jun 2004

The UK electric network wants to add 3,500 mobile phone and TV masts to its existing stable. The price may appear a bit punchy. But given some reasonable synergies and the company s track record, it would be a good buy.

Revamping CSFB is CS’s least-bad option

25 Jun 2004

Not that revamping CSFB will be easy either. Especially as it will require commitment and it's not clear CS is up for it. A fullblown merger with a European rival or selling off CSFB would both be extremely problematic.

When is a performance fee not a performance fee?

25 Jun 2004

When you can get one 199 times out of 200. That s what Azimut, the Italian fund manager preparing for an IPO, projects. But its fee structure is so cheeky that it s probably not sustainable.

Telecinco puts other IPOs to shame

24 Jun 2004

The patchiness of recent IPOs is partly down to choppy markets; but it is also because many sellers are squeezing the lemon too hard. Telecinco shows that there's plenty of demand for good companies, when sensibly priced.

Blackstone yields on terms of BDC offering

24 Jun 2004

The private equity firm has made many concessions to get a planned business development company IPO out the door. But the biggest one the closure of an existing mezzanine fund raises thorny new questions that beg answers.

Credit derivatives may be about to grow up

24 Jun 2004

Credit risk futures could be coming soon. That would give a big fillip to what's already the fastestgrowing part of the derivatives market. Pessimists worry that this would be just another toy for traders. Maybe. But it should help spread risk, which is good for the economy.

Germany shows no signs of courage

24 Jun 2004

The nation could do with some bold plans, or at least with some prudence. The budget gives neither. The government is running out of trick revenues. But that won't be enough to make it more responsible.

John Mack to quit CSFB

24 Jun 2004

His abrupt departure, before CSFB's turnaround is complete, raises big questions about the group's commitment to investment banking. The possibility of a sale of CSFB can't be ruled out now that the conservative Swiss have closed ranks at the group.

Barclays clinch the Telegraph for £665m

23 Jun 2004

It may look like the value of the UK broadsheet has gone through the roof since the UK billionaire brothers made their first bid in January. But the reality is that it is not too far off from what they originally bid.

Ex-RCS boss gets E15m reward for failure – reports

23 Jun 2004

Maurizio Romiti is thought to have been paid almost as much as Klaus Esser's appreciation bonus at Mannesmann. If he'd delivered a fraction of the value Esser did, there would be no cause for complaint.

Black tries to veto Telegraph sale

23 Jun 2004

In seeking to halt the £665m sale of the UK titles the former press baron looks to be pursing better terms to settle Hollinger lawsuit But even if Black succeeds in blocking the sale, it won t spell the end of his financial liabilities or legal problems. This isn't because the former media baron dislikes the Barclay brothers. After all, Black himself tried to sell out to the Barclays. His latest legal manoeuvre is more a negotiating tactic to minimise his jeopardy from other lawsuits. It looks a pretty lastgasp tactic.

Morgan Stanley’s A-team slow to catch on

23 Jun 2004

Its creation of a socalled Ateam of hotshot bankers to market to clients seems to have worked well in terms of results. Normally, other banks copy good ideas with alacrity. But in this case, they re more cautious.

Italy goes the wrong way about saving Alitalia

23 Jun 2004

What is needed is a crisis at the airline to bring the unions to their senses. Instead, the government keeps writing cheques. Sadly, while this is gutless, it has a certain opportunistic logic. It allows Rome to blame Alitalia's collapse on Brussels.

Healthcare IPOs face varied receptions

23 Jun 2004

The successful float of Czech generic drug company Zentiva shows investors have some appetite for growth. But while IPOs of stable companies such as Biomerieux should get a warm reception, signs are higherrisk biotechs won t.

Pension hole scuppers WH Smith buyout

23 Jun 2004

Permira s decision to walk away demonstrates the hidden powers of pension boards. It is also a timely reminder that indicative bids are not set in stone.

Shake-up at RCS Media deserves two cheers

22 Jun 2004

The poor management of the Italian media group has been forced out and a bad demerger plan nixed. But the power games are probably not over. And it's unclear if RCS can attract a good manager.