Elan faces tough talks with creditors 31 Mar 2005 The Irish biotech is reeling after a third case of a rare disease has been linked to its lead drug Tysabri. The drug is as good as dead. This makes Elan s onerous debt load a crushing burden.
ECB more worried about inflation than growth 31 Mar 2005 A raft of gloomy economic surveys has prompted talk of a rate cut. But the European Central Bank is preoccupied with inflation risks. Unless the eurozone economy takes a decisive turn for the worse, the next rate move is still likely to be up not down.
FSA softens unbundling initiative further 31 Mar 2005 The UK regulator has decided against an explicit ban preventing Reuters and Bloomberg terminals being subsidised by broker commissions. It is a good thing that the FSA has resisted overlyprescriptive regulation. But there are tradeoffs.
Tide starts to turn for emerging market bonds 31 Mar 2005 Fears of higher US rates have triggered a small selloff. But this may be only the first part of the story. Fundamentals, such as large trade surpluses, look good now. But much of that is thanks to US imbalances, which in time will reverse.
Continental still cheap 31 Mar 2005 The German car parts maker doubled earnings in 2004 despite a sluggish car market. But continued cost cutting and fast expansion in its brakes unit should ensure further strong growth in the next few years.
Bids prompt hopes of further Italian bank M&A 31 Mar 2005 Should ABN and BBVA break Italian defences, foreign groups like SCH which owns a stake in SanPaolo might be tempted to launch bids too. But the mere threat of a foreign invasion may be enough to spur domestic consolidation.
Compass Group results leave a bad taste 31 Mar 2005 The contract caterer insists it will be unaffected by bad press from the UK's healthy school dinners lobby. But investors are rightly alarmed by a surprise £25m reduction in profits for 2005 hot on the heels of last year's profit warning.
Wind bids won’t trigger mobile re-rating 30 Mar 2005 Operators such as 02, Bouygues Telecom and Auna probably hope the E12bn bids for Wind will lift their own valuations. But the Wind deal contains idiosyncrasies. It will offer only limited support to mobile valuations and only then to real bid candidates.
ABN bids E7.2bn for Antonveneta 30 Mar 2005 It is showing its commitment by raising equity, belying hopes it wanted only to flush out a bid for its 13% stake in the Italian bank. But ABN will need to achieve a stepchange in Antonveneta s performance to justify the 30% premium.
Beiersdorf faces challenging 2005 30 Mar 2005 The consumer goods group s sales growth in its largest market, Europe, is slowing, and competition in other markets is increasing. Beiersdorf may need to consider a tieup if it is to continue growing.
Buffett embroiled in AIG probe 30 Mar 2005 The Berkshire Hathaway chief's denial of involvement in the dubious reinsurance contracts is extremely carefully worded. It is not the Sage of Omaha s typical plain speaking.
MCI shareholders should thank fast money 30 Mar 2005 The board vilified the arbs and hedge funds that wanted it to consider an offer from Qwest rather than its preferred bid from Verizon. But if they hadn't pushed the board, it wouldn't have secured another $900m from Verizon. Shareholders now have two reasonable offers.
ISS bid won’t trigger a support services goldrush 30 Mar 2005 The E3bn bid by Goldman and Sweden's EQT for the Danish support services group has raised hopes of further buyouts in the sector. But the deal is likely to prove a oneoff. As the collapse in ISS bonds shows, support services companies are difficult to gear up.
Morgan Stanley’s Purcell tries to squash dissent 30 Mar 2005 He will need to do a whole lot more than force through management changes to make up for the bank s years of underperformance. The model he is clinging to is not working. By digging in his heels, Purcell risks weakening the core banking franchise.
BNPP and Moulin family to buy Galeries Lafayette 29 Mar 2005 The French bank is striking back. Rival Credit Mutuel was trying to muscle in on its relationship with Cofinoga, GL s consumer credit arm. But, by helping the Moulin family finance a bid, BNPP has managed to tighten its grip on Confinoga and shut its rival out.
US shareholders may get a meaningful vote 29 Mar 2005 The SEC let shareholders down last year when it backed off proposals to give them powers to get rid of crummy directors. But all is not lost. Some 80 companies are now contemplating changes to their byelaws that will make directors subject to majority votes.
Cablecom replaces bank loan with new bond 29 Mar 2005 The Swiss cable group has sold a E800m bond that resembles a bank loan dressed up in capital markets camouflage. Here is further evidence of hedge funds disintermediating banks from the credit market.
Spanish banks take the lead in cross-border deals 29 Mar 2005 First Santander/Abbey. Now BBVA/BNL. Two Spanish retail banks have broken down the barriers blocking crossborder bids in the industry. That honour was expected to fall to a wholesale bank. Outsize egos are just one reason why it didn t.
Fresh setback for LSE bids 29 Mar 2005 The potential offers by Euronext and Deutsche Boerse have been referred to the UK s Competition Commission for a fullblown investigation. Europe s exchange market is inefficient and certainly merits scrutiny. But it does not necessarily follow that bids should be blocked.
SunGard taken over in $11.3bn club deal 28 Mar 2005 Seven privateequity firms have banded together for the biggest LBO since RJR. This raises questions for their investors. Some, like Calpers, invest with more than one of these funds. To make this work, the funds will need to get bigger and the clubs smaller.
Online gambling promises big winnings 27 Mar 2005 A raft of online gaming groups are considering UK stock market flotations, encouraged by the strong performance of Sportingbet. Yet even after a 300% rise in the last year, shares in the online gambling site still don't look expensive.
Oil prices are high – and likely to stay that way 24 Mar 2005 The long run equilibrium oil price has increased from around $20 a barrel to more than $35 now. As oil is trading at over $50 a barrel, that suggests current oil prices should fall. They will, but only eventually.
Prudential ousts Bloomer 24 Mar 2005 The chief executive lost the confidence of many investors after several uturns, including a £1bn rights issue to fund domestic expansion. But the rest of the board, led by chairman David Clementi, has done a uturn too. It publicly backed Bloomer six months ago.
Sainsbury shows signs of recovery 24 Mar 2005 Justin King s efforts cut prices and actually get the goods in store are beginning to pay off. Safeway s demise has been handy too. But while likeforlike growth is encouraging, investors will be wondering whether this has come at a cost in terms of margins.
Solvay scores coup with E1.3bn Fournier buy 24 Mar 2005 Even without costcuts, the purchase will give a good return on investment. Throw in some synergies, and this looks like an excellent deal. The Belgian chemical and drug group is the latest acquirer in the continuing consolidation of Europe s drug makers.
PIK bonds take a beating 24 Mar 2005 Bonds that pay interest in the form of new bonds were sold as highyielding quasi equity at the top of the credit cycle. Now the cycle has turned, they look more like a cheap way to short the riskiest part of debt capital structures.
Oracle needs to keep the acquisitions coming 23 Mar 2005 And the lucrative stream of maintenance revenues from existing customers is starting to come under attack from cutrate competition. The software group s applications business is going into reverse new licences shrank in Q3 before PeopleSoft s contribution.
TUI boosted by strong growth in tourism 23 Mar 2005 The German tourism and shipping group has weathered a difficult year of takeover speculation and uncertainty about its structure. Its future looks more secure. But its shipping unit may slow down its growth.
SunGard close to $10.5bn buyout 23 Mar 2005 SunGard makes a surprisingly good buyout candidate. A successful exit at this price would be another matter. Leveraged buyouts in technology are a rare beast. But private equity firms are close to buying out the US tech group.
US bankruptcy bill gives boost to Wall Street 23 Mar 2005 The Senate s recent bankruptcy bill lifts a ban on banks restructuring companies whose securities they recently underwrote. This undermines a key investor defence against conflicts of interest during Chapter 11 bankruptcy proceedings.