Putin finesses Gazprom liberalisation 30 Dec 2005 Russia has lifted Gazprom s ownership restrictions at an advantageous time. Gas prices are high, and index funds will have to buy the stock. That might give the stock a short term boost but it doesn t mean Gazprom is a good investment or Russian property rights are more secure.
Insiders take dim view of internet stock valuations 30 Dec 2005 Companies such as Google and eBay are nearly impossible to value due to the unknown unknowns of the industry. But corporate actions can reveal insiders' views on stock prices. In this context, Google s purchase of 5% of AOL is most revealing.
2005 a banner year for US credit growth 30 Dec 2005 Credit growth has continued to outpace economic expansion. As a result, the US economy avoided its day of reckoning last year. However, it hasn t been cancelled. And with more debts to pay, the final bill will be much higher.
Germany’s IPO market to remain patchy in 2006 30 Dec 2005 Bankers are optimistic 2006 will bring a breakthrough in German issues. They expect up to 30 deals, against 13 big transactions this year. Although there has been some pickup, it remains hard to interest German investors in IPOs. There is no sign that it is getting much easier.
Sovereign sticks it to investors again 30 Dec 2005 By arguing investors must show cause to oust directors, the US bank overturns a decade of public statements and SEC filings to the contrary. It says the filings were mistaken. But the timing of this is suspiciously convenient. Sidhu doesn t want investors to vote on his leadership
Hilton pays dear for £3.3bn British cousin. 30 Dec 2005 The premium Hilton Hotels is paying for Hilton Group s hotel unit looks value destructive. But the buyer may have had no choice if it wants to expand outside the mature US market.
Triarc could use some of Peltz’s own medicine 30 Dec 2005 A breakup of Triarc, the investment company of the billionaire, and Wendy s gadfly, Nelson Peltz, could unlock value. Thankfully for investors, he s planning one. Spinning off its hedge fund arm may make for tastier returns than anything Wendy s cooks up.
Draghi may be too good for Bank of Italy 29 Dec 2005 The new governor has good connections in Italy, Europe and the financial world. And his integrity is unquestioned. The bank needs his credibility to recover from Fazio s scandals. But Italy could better use his skills to help with its fiscal mess.
NY transit workers do better than GM’s 29 Dec 2005 Judging by their latest generous contract, NY s subway workers must be far more productive than those at General Motors or Ford. That s not the case. But the city s transit employees are sheltered from global competition. That gives them greater bargaining power.
Rank looks highly valued after film sale 29 Dec 2005 The leisure group's investors are clearly discounting a full breakup of the group, now the film processing poison pill has been sold. But even if that happens, the share price looks overcooked after its 20% run this year. Investors might want to cash in their winnings.
Accountant deals Enron duo triple blow 29 Dec 2005 Exchief accountant Richard Causey's cooperation hurts Ken Lay and Jeff Skilling, and the loss of his lawyers weakens the defense team. Causey not only backs up former financial officer Andrew Fastow for the government, he lacks his stench.
Consob makes BNL a bigger mouthful for Unipol 28 Dec 2005 The Italian insurer s bid for BNL was already a big stretch financially. Now some undisclosed share deals have forced it to raise the offer. True, the increase isn t massive. But it gives the Bank of Italy another reason to think hard before giving Unipol the green light.
US imbalances cause yield inversion 28 Dec 2005 Irrationally low yields on 10year bonds didn't budge as short term rates rose. This week they briefly fell below those on twoyear debt. An inversion is generally seen as the precursor to a recession. But this looks more like excessive monetary optimism.
New M&A boutiques go after hedge fund fees 24 Dec 2005 Deal impresarios Joe Perella and Gerardo Braggiotti are opening investment banking firms in the New Year backed by big money. But their shops will differ from the boutiques of old as they aggressively target a larger slice of the burgeoning hedge fund fee pool.
Coke makes half-hearted gesture on severance pay 23 Dec 2005 The softdrinks maker kept quiet about its decision to allow shareholders a vote on big payoffs for departing executives. Why? Maybe it was ashamed of bowing to the famed Teamsters union. More embarassingly, it would still be rewarding executives for failure.
Ebner’s back: a ghost of Christmas past 23 Dec 2005 The corporate raider, who used to instil fear in Swiss boardrooms, was nearly bankrupted by the stock market crash three years ago. Now he is making a comeback with a 12% stake in Converium the troubled reinsurer also trying to repair its reputation.
Arcelor teases Dofasco with raised E3.5bn offer 23 Dec 2005 That's only 2.4% more than ThyssenKrupp's agreed offer for the Canadian steel producer. And it is below the current share price. That is unlikely to win the day for the Parislisted steelmaker. But it may be enough to open negotiations.
TDC buyers learn from ISS rumpus 23 Dec 2005 They are buying back the Danish telco s existing bonds. The ISS buyout caused a huge legal row when its buyers left the bonds in place. But this probably wasn t a tough decision. It avoids a huge fuss, and doesn t hurt the buyers economically.
Career Education offers lesson in governance 22 Dec 2005 Management of the US operator of private colleges remains in charge despite an overwhelming vote of noconfidence back in May. The situation highlights a big problem with US governance: even when investors issue managers a failing grade, they can t expel them.
Wanted: Italian hotshot for boring job 22 Dec 2005 Italy's central bank needs a strong new governor to restore its credibility. But if done properly, running the BoI is a pretty dull job. Breakingviews imagines what the advertisement for Fazio s replacement might say.
Saudi spending spree bad for dollar 22 Dec 2005 The oilrich kingdom is starting to spend its winnings. One day it s a $27bn economic city; the next a $17bn fighter jet contract. As this gathers pace it will hurt the greenback. It involves recycling money from the global capital markets mainly into European imports.
Hilton shares leave little room for upside 22 Dec 2005 The UK leisure group's shares surged on hopes its hotels will be sold at a high price, and that private equity will snap up the gaming side. The stock is now discounting not just one highpriced takeover but two. Any disappointment or delay could lead to a fall.
HTIL sale better for Hutchison than it looks 22 Dec 2005 The conglomerate has ceded control of its Asian telecoms operator without a premium. And it will be poorly represented on the board. But the deal will cut Hutch s debt. And getting telecoms investor Sawiris on side might be a help in realising value from Italian assets.
Private equity chases Daily Mail disposal 22 Dec 2005 Buyout firms are thought to be willing to offer up to £1.5bn for the Northcliffe stable of UK regional newspapers. That looks a fairly high price, given that regional newspapers aren't immune to the challenges facing the industry.
Ackermann caught in Mannesmann nightmare 21 Dec 2005 He had been expected to tough a retrial out; but with Deutsche's chairman openly speculating about his successor, that looks less certain. The Deutsche Bank chief faces a retrial over the controversial bonus case which will prompt more negative publicity in Germany.
Premiere deals a blow to the IPO market 21 Dec 2005 The German TV group's shares have fallen 40% and are nearly half their March float price, after it lost exclusivity on football rights. The float got away largely on retail investor support. This shock may increase wariness of companies brought to market by private equity.
Private equity needs better succession planning 21 Dec 2005 Thomas Lee, founder of the eponymous buyout firm, is quitting to start over again. It follows a handover to younger partners whose bet on Refco went awry. This won t make other buyout founders feel good about letting go.
Qwest’s Nacchio knew too much to sell 21 Dec 2005 Unlike Worldcom's Bernie Ebbers, exQwest CEO Joseph Nacchio refused to go down with the ship, bailing out of the US telecoms company. Now he faces 42 counts of insider trading. True, Qwest's targets were a stretch. But weren't everybody's during the boom?
Sprint’s $6.5bn Nextel Partners bid no knockout 21 Dec 2005 The $28.50ashare offer marks a similar premium to the one it paid for Alamosa, another affiliate. Yet Partners is a better company. But many hedge funds piled in at prices far lower and, with the yearend at hand, the deal will probably squeak by.
US inflation revision should be a wake-up call 21 Dec 2005 The GDP deflator, the broadest index of prices, rose 4.2% in the third quarter. That is the highest rate since 1983. Then, the longterm trend was downward. Now it could be going in the other direction. US bond buyers are too relaxed about the threat.