TDC buyout will be surprisingly easy to finance 30 Nov 2005 The E10bn in debt for Europe's biggest buyout may look like a challenge, given its sheer size and nearly six times debt multiple. But banks are likely to have an easier time selling their exposure to the market than with Wind, the previous European record buyout.
Lazard nabs controversial role advising Icahn 30 Nov 2005 The firm is advising the billionaire investor on his options for kickstarting Time Warner s lacklustre stock price. This is a risky move. Lazard boss Wasserstein advised on the illfated AOL deal. But its fee structure may set a beneficial precedent for shareholders.
Compass should try harder on openness 30 Nov 2005 The beleaguered UK caterer says it received a subpoena from a US attorney a "while back". Yet it didn't say so at the time. Compass should be bending over backwards to regain investor trust even if that means revealing bad news rather than waiting to be asked.
Holiday sales won’t make or break US economy 30 Nov 2005 Every year Wall Street puzzles over Christmas shopping reports, as if holiday shopping is a harbinger of economic health. But the link between postThanksgiving shopping sprees and economic growth is tenuous.
TDC extracts high price from private equity 30 Nov 2005 A consortium of buyout firms is paying E13bn for the Danish telecoms operator. That includes paying off bondholders. All this will make the deal harder to stack up. But it will help ensure that the private equity bidders are not gazumped by a trade buyer.
Uproar over UK pension reform is unwarranted 30 Nov 2005 The Pension Commission's report recommends slightly higher taxes, slightly later retirements and a cheap plan for semicompulsory saving. The proposals are modest in the context of the UK s demographic shifts. They should attract support, not controversy.
BA’s management cull may not win unions over 30 Nov 2005 New broom Willie Walsh is cutting 50% of top managers in a bid to achieve the holy grail of a 10% operating margin. It's certainly symbolic. But it will still be hard to persuade the unions to accept compulsory redundancies among the workers.
E-proxies are no quick fix for activist investors 30 Nov 2005 An SEC proposal to allow webbased proxy statements will save companies money. But activist shareholders face the same old obstacles. They will still need to pull out all the stops to try to oust management or directors. And that includes popping proxies in the post.
American Pharma’s $4.1bn deal pinches minorities 29 Nov 2005 The drug company is acquiring its parent in a deal its billionaire founder says was negotiated at arm's length. But that s not reflected in the valuation placed on the main asset being acquired. Sometimes it hurts to be a minority investor in the US.
Inverted US yield curve could signal trouble 29 Nov 2005 Short rates are poised to go higher than longterm yields. The last four times this happened, a recession followed soon after. Could it be different this time? Perhaps. But only so long as foreign investors and central banks keep buying US bonds.
Three cheers for Brambles’ £1.2bn shareholder payout 29 Nov 2005 The business services group will sell half its businesses, return the capital to shareholders and eliminate its dual UK/Australian listing. That looks smart. If Brambles can get a good price for its low growth units, this restructuring should create value for shareholders.
Dubai digs deep for £3.3bn P&O deal 29 Nov 2005 Governmentbacked Dubai Ports is paying a rich price for the UK port and ferries group. That makes a counterbid less likely.
Compass keeps investors waiting for good news 29 Nov 2005 The catering giant s full year figures suggest it has run out of nasty surprises. Sales grew 7%, and pretax earnings hit expectations. But while Compass remains rudderless and its corruption probe unresolved, sentiment towards the stock is unlikely to improve.
Greater fools support buyout recap boom 29 Nov 2005 The vogue for recaps looks daft from the lenders perspective. They are taking more risk, and being paid less for it. But lenders aren t dumb. They ll lend so long as the secondary market will buy the risk.
Barclays dogged by higher costs 29 Nov 2005 Although revenue is growing strongly, expenses are also growing strongly with the result that margins aren t expanding. That has taken the shine off the recent surge in Barclays stock price.
Higher savings can’t solve pension crisis 29 Nov 2005 Pensioners' incomes must still be paid from the pockets of future workers, regardless of how the scheme is funded. State pensions depend on the reliability of governments, but private pensions are at the mercy of markets.
Swisscom’s foreign deals aren’t worth backing 28 Nov 2005 The telecoms company is outraged that the Swiss government doesn t want it to buy foreign companies. But the deals it was considering were overpriced and illconceived. No wonder its majority owner jibbed.
ThyssenKrupp’s E3.5bn bid for Dofasco looks steep 28 Nov 2005 The German giant has emerged as a white knight for the Canadian steelmaker, trumping Arcelor with an agreed deal. But if Arcelor s bid was hard to justify, Thyssen s looks even more so.
HSBC earns benefit of doubt over Green promotion 28 Nov 2005 The bank has flouted corporate governance best practice by promoting its chief executive to chairman. But it has given some clear reasons, and given them promptly. That should spare it the drubbing meted out to Barclays.
Ahold settles lawsuit for $1.1bn 28 Nov 2005 That s about 10% of the Dutch retailer s market value. But its balance sheet is now strong enough to take the hit. Drawing a line under the scandal makes sense especially as Ahold may need to bulk up its US operations to pep up faltering growth.
Bank of America’s deal scrapes past outmoded law 28 Nov 2005 US law prevents banks from using mergers to take retail deposits above 10% of the national total. It nearly scuppered BofA s bid for MBNA. Congress should scrap the law. It is outdated and anticompetitive, and presents a hurdle to rivals looking to build a competing franchise.
Merck’s giant cost cuts not enough 28 Nov 2005 The US drugs group is the latest drugs group to slash its workforce, with plans to cut 7,000 jobs. But the industry s real problem is flagging sales. Cost cutting won t solve this. What it needs is new drugs.
Financing wheeze helps Tchenguiz pay most for pubs 27 Nov 2005 The property tycoon has paid brewers more for beer in return for them subordinating the supply contract to lenders. That's a cunning way of raising more cash. But it has limits. Brewers may not want the extra credit risk, and regulators might object too.
Disappointment awaits euphoric Google investors 25 Nov 2005 Google s stock is impossible to value on a fundamental basis. However, by comparison with Microsoft during its early years, the internet company is very expensive.
Marconi’s stock looks cheap 25 Nov 2005 Ericsson s purchase of most of the UK telecom group will leave an overcapitalised rump called Telent. The group may also be able to release part of a slab of capital set aside for pensioners. The market isn t attributing any value to this.
EU sugar reform deal boosts Tate & Lyle 25 Nov 2005 The UK sugar refiner emerges as the big winner from the EU s deal to cut sugar tariffs. Crucial concessions were secured at the last minute that should enable it to compete on a more level playing field against beet processors.
Microsoft should consider three-way split 25 Nov 2005 One part could focus on Windows, another on Office and a third on newer internet businesses. A breakup could liberate Microsoft from the bureaucracy stifling its entrepreneurial spirits and its stock price.
New broom at DrKW heralds shift for London 24 Nov 2005 The investment bank s incoming CEO Stefan Jentzsch has a key advantage over the departing Andrew Pisker. He is German. That makes DrKW better equipped to make money in its home market. But it may translate into a demotion for the London office.
British Land disposals signal further break with past 24 Nov 2005 The UK property company s decision to sell two key properties shows CEO Hester is serious about more actively managing the portfolio. Combined with strong rental growth in retail and City offices, British Land will continue to perform even if yields stop falling.
Equity rally reflects poor alternatives 24 Nov 2005 European stock markets are rallying because bonds are fundamentally unattractive. That may give investors a negative reason to buy shares. But is there a positive one? It s not obvious that there is.