Goldcorp disappoints with $8.6bn bid for Glamis 31 Aug 2006 The deal ramps up the gold miner s reserves and resources. After the allstock merger, the new company s shares will also be more liquid. That doesn t justify a 33% premium with few synergies. This deal is yet another sign of euphoria that s sweeping Canada s mining industry.
Heinz’s hardest work still lies ahead 31 Aug 2006 Embattled boss Bill Johnson says that the company s strong first quarter was the result of four years of restructuring. The ketchup maker managed to beat expectations, but Johnson will need more quarters like these to restore confidence and keep his job.
Ford to let Aston Martin speed away 31 Aug 2006 James Bond's vehicle of choice helped catch some rich customers. But they re a drop in the bucket for the troubled carmaker. At Porsche s multiple of sales, it s worth $1bn. And who knows, some billionaire might pay even more for the 007 privilege.
Companies should turn to inflation-linked debt 31 Aug 2006 Issuance in the UK is still paltry. That s probably because companies think fixed rates have lower risks. They re wrong. And the real riskfree rate is extraordinary low at 0.8% for 50year paper. Thames Water is taking advantage. Where are the others?
TeliaSonera blips on buyout radar 31 Aug 2006 The SwedishFinnish telecoms operator has long ticked many of private equity s boxes. The question was always how a buyer might get control. But if the Swedish government changes over, the state's 45% stake would be up for grabs. And activist investors may be jumping aboard.
Tacit collusion thrives in US skies 31 Aug 2006 Take the recent launch by Jet Blue of cheap daily NYWashington flights, which raised the prospect of competition on a lucrative route. But Delta and USAirways are clinging to identical $608 fares. There s more than just loyalty for the "Shuttle" service at work here.
Aer Lingus shouldn’t be greedy at IPO 30 Aug 2006 The Irish flag carrier likes to call itself a lowcost, low fare airline. In the runup to the IPO, it s easy to see why. But it is no Ryanair. And while its growth strategy might make sense, it s still risky.
BP’s trading creates reputation risk 30 Aug 2006 The energy giant s ownership of infrastructure assets and extensive trading operations creates a potential conflict of interest. After a spate of recent troubles, its traders are being investigated for allegedly manipulating oil and gasoline markets.
Aluminium mega-merger has much to recommend it 30 Aug 2006 A combination of Rusal, Sual and Glencore s alumina assets makes economic and political sense and would help two oligarchs. International expansion plans could be accelerated. A London IPO, bringing full global respectability, is a plausible aspiration.
Sanpaolo Imi hasn’t done a bad deal 30 Aug 2006 Some shareholders, including Santander, think they have been shortchanged. The Italian bank should have got better terms from Intesa. You could argue that Sanpaolo deserved a premium. But it s not a strong case. Anyway, if Intesa has really underpaid, someone can trump it.
Spiralfrog not the panacea for record companies 30 Aug 2006 Universal Music is backing an iTunes killer in an attempt to loosen Apple's control over the digital music. Good idea. The snag is that the revenue model looks uncertain, and the service has too many constraints to really lure in the pirates.
Bondholders flex muscle over technical defaults 30 Aug 2006 True, bond investors have been slow to put up much of a fight against valuedestructive actions like leveraged buyouts. But as more companies delay regulatory filings, bondholders are crying default. It s an incremental move in the bondholder value revolution.
Marsh is a good breakup candidate 29 Aug 2006 Mike Cherkasky inherited a mess when he took the helm of Marsh & McLennan in the wake of regulatory scandal. He has stabilised the business, but it remains well below its breakup value. Activists and bargain hunters take note.
Eurozone monetary signs point to higher rates 29 Aug 2006 Money supply growth is slowing, but loans to the private sector are increasing at an 11% rate. That is fuel for a future inflationary fire. It may not light, but Europeans seem to be catching the AngloSaxon disease of borrowing freely. The ECB s response has been slow, so far.
Mr. Bean berates Helicopter Ben 29 Aug 2006 The Bank of England s chief economist thinks the Fed is wrong to target core inflation. That has produced an excessively loose US monetary policy, making the job of controlling inflation more difficult for other central bankers.
Cognis suggests private equity weakness 29 Aug 2006 Goldman and Permira pulled the sale of the chemical firm when they couldn't get the right price. It could be a sign valuations are cooling. But then Cognis s owners can afford to be picky. They have already got back almost twice their initial equity.
Brown-Forman pays up to diversify 28 Aug 2006 The Jack Danielsmaker is paying 22 times operating profit to stock its bar with the premium Herradura tequila brand. This shows how pricy it will be for the family firm to create a full shelf on its own. A sale to Diageo or Bacardi deal would be quicker.
Ahold risks scoring own-goal 28 Aug 2006 The Dutch retail giant s refusal to talk to shareholders is giving a PR victory to the hedge funds calling for a breakup of the group. Ahold s strategy isn t smart as it may help the rebels gain support. This has the potential to escalate into a full pitched battle.
Kinder Morgan buyout nears conclusion 28 Aug 2006 True, boss Richard Kinder and his consortium have only bumped up the offer price by 7.5%. That s hardly stunning. But it s slightly more than independent board members at Aramark and Kerzner International squeezed out of their acquisitive executives.
Food inflation could be next big story 28 Aug 2006 The big risk isn t the current shortages of coffee and fruit. They aren t likely to last too long. The problem is in the other 90% of the cost of food. Those other expenses are creeping up. Inflationary psychology could set in.
Ebay’s Google deal highlights weakness 28 Aug 2006 The online auctioneer, desperate for growth, will share ad revenue with Google on its international websites. But it didn't receive hefty financial upfront guarantees the way MySpace or Facebook did from Google and Microsoft. But it didn't receive hefty upfront guarantees the way MySpace did. Still, there may be a silver lining for Skype.
China digs in America’s backyard 28 Aug 2006 A trade deal with Chile is more driven by China s need for natural resources than by political considerations. Nevertheless, South America s drift away from U.S. economic hegemony should trouble Washington.
Credit Agricole squeezed by Italian bank merger 28 Aug 2006 The French bank found that an 18% holding in Intesa and control of a pact with 40% wasn t enough to influence an obviously good deal. Agricole may yet be able to get something out of the planned E65bn merger with San Paolo Imi. But cashing in could be the best answer.
Intesa, Sanpaolo crack on with E65bn deal 27 Aug 2006 The idea has clearly been to get the story out as quickly as possible, and then dare any dissident strategic shareholders to block the deal. The two banks have stitched together a good case. But there are still loose ends especially the role of Credit Agricole to be tied up.
Silly season for dealmakers in full swing 25 Aug 2006 It's late summer and Wall Street's finest are on boats and beaches, leaving junior bankers free to cook up wacky deal proposals. Dell and Ford are two names making the rounds as farfetched LBO candidates. These discussions may not survive past Labor Day.
Brussels flexes muscles over E29bn Endesa battle 25 Aug 2006 The European Commission has said Madrid s attempts to block E.on s offer for Endesa are illegal. After almost a year, the way now may finally be open for the bid battle to come to a close. The European Commission has said Madrid s attempts to block E.on s offer for Endesa are illegal. Well done. After almost a year, the way now may finally be open for the bid battle to come to a close.
Social networking could backfire 25 Aug 2006 A goldrush mentality is driving established firms like Microsoft, IAC and Sony to cut deals with hot online upstarts like Facebook. But as history teaches, when the dust settles, many of these deals will turn out to be blunders, driven by fear rather than financial logic.
Europeans finance US buyout bonanza 25 Aug 2006 Part of the financing for the record HCA buyout is being arranged in Europe, even though the hospitals firm has few operations there. It s cheaper now to raise US leveraged loans in Europe, where credit markets have become more efficient and liquidity remains abundant.
Rubin is right to resign as Ford director 25 Aug 2006 The Citigroup executive risks getting caught up in debates over conflicts of interest as the ailing car company flirts with selling assets. Perhaps this heralds the end of Ford s penchant for investmentbanker directors. Given their patchy track record, it s about time.
Vodafone retreats profitably in Belgium 25 Aug 2006 The mobile phone giant has made a decent go of selling its minority stake in Belgium s Proximus. It s got a good price and isn t paying tax. At £1.4bn, the sale won't transform Vodafone's fortunes. But it may revive faith in its negotiating at a time when other deals may come up.