Messier rediscovers art of the deal 29 Dec 2006 The former Vivendi chairman has gone back to his investment banking roots. His ParisNew York boutique is thriving. Messier always liked the American way of doing business. Now he is following another US pattern fail and start again.
Branson charm backfires in US 29 Dec 2006 The US regulator has tentatively ruled that the billionaire s latest Virgin airline spawn violates rules on foreign control. Virgin America needs to prove that Branson isn t in control. That will be tough without changing its financing.
SEC gives another win to managerial capitalism 29 Dec 2006 The regulator has decided to allow companies to conceal the full size of options grants at the time of issue. This case of regulatory capture is red meat to new Democrat powerbrokers in Washington.
Vodafone still a contender for Hutchison Essar 29 Dec 2006 Indian conglomerate Reliance may gatecrash the $17bn battle for Hutchison Essar. Potential synergies mean it might be able to pay up. But Vodafone still has cards to play. Unlike Reliance, it could offer minority shareholder Essar the chance to stay invested.
UK firms face huge – or tiny – pension debts 29 Dec 2006 Take your pick. The FTSE100 companies have deficits of £440bn or £40bn. The choice depends on how actuaries read the runes. That s either 30% or 3% of market capitalisation. The truth is elusive, but the cash flow is clear. Investors should use the low number.
India’s $17bn mobile battle heats up 28 Dec 2006 Essar has reportedly made a bid for Hutchison s stake in their joint venture. It's a big offer from a small group. But in a fevered market, Essar has little to lose. It could find private equity partners, or just raise the price for another buyer.
Forecasters have lost the plot 28 Dec 2006 The experts didn t predict the strong eurozone and UK economies in 2006. They also missed the US profits explosion and higher inflation. There s little reason to hope for a better performance in 2007. Noone knows how the global liquidity flood will play out.
American Airlines will benefit from merger wave 28 Dec 2006 Not being a likely merger candidate makes American a more appealing investment. It can reap consolidation benefits without execution risks. That might explain why Iceland's FL Group has bought 6% of American s stock. It seems to hope US airline mergers will boost its profits.
China builds a wall against Wall Street 27 Dec 2006 The Chinese regulator is urging brokers to list publicly and expand to meet future competition from US securities firms. Japan s response to financial liberalisation in the 1980s was similar. It ended badly when the bubble burst. China s efforts may do likewise
Who will next face Google’s wrath? 27 Dec 2006 Its superiority in search and online ads left a trail of destruction this year Yahoo bore much of the brunt. That may continue, but with Google brokering video and radio ads in 2007, Madison Avenue may have most to fear.
Europe lags US in LBOs 27 Dec 2006 Leveraged buyouts are making up a decreasing share of Europe's M&A, compared with trade deals. Yet in the US it's the opposite. It's a question of smarter target companies and tougher regulation. But LBO firms are flush with cash. Don t write Europe off yet.
Bush should agree to minimum wage demands 27 Dec 2006 The US president needs to conciliate the new Democratic Congress. A small minimum wage hike may be politically savvy. It would also be unlikely to damage the economy. And ceding some ground now may give Bush ammunition for more important battles to come.
Can BP escape Russia’s resource nationalism? 27 Dec 2006 The company has done everything right, but a reported investigation into one of TNKBP s most promising gas fields is a worrying sign. No foreign company is in a strong position to counter the trend towards government control. It s hard to fight the Kremlin.
Gerald Ford’s honesty had economic benefits 27 Dec 2006 Remembered as a bumbler, he pursued centreright policies that benefited the economy. He consistently avoided sacrificing good policy for short term political gain. In policy and character, we could do much worse in 2008.
Nigerian explosion demonstrates country’s risk 27 Dec 2006 Tuesday's tragedy did not affect oil exports, but it underlines the risk of doing business in Nigeria. The production system is constantly flirting with disaster. That s a problem as oil majors look to increase their profits there.
Credit bears keep crying wolf 22 Dec 2006 The problem with predicting doom and gloom is not that you will be wrong, but that you don t know when you will be right. Credit spreads didn t widen in 2006, contrary to dire predictions. But that doesn t mean the sheep are safe from predators.
Centaurus bet on LSE bid failure has logic 22 Dec 2006 It s not game over in this bid yet. Nasdaq may not pay a price the LSE would back. Its big stake may not be as risky as the market thinks. This isn t a massive bet. And it hasn t cost Centaurus much to short LSE stock. But it s a straw in the wind.
Could private equity bring about its own downfall? 22 Dec 2006 Blackstone s Steven Schwarzman s worries that increasing US inequality could invite a political backlash. But his own industry private equity is part of the problem. It cuts workers wages while bringing fortunes to buyout kings.
Long-short funds may earn their keep in 2007 22 Dec 2006 Before the advent of statistical arbitrage and $10m pickled sharks, the simple longshort equity fund the bastion of the hedge fund world. But these funds have lagged a naïve longonly strategy this year. If the markets turn sour in 2007, they may be back in the spotlight.
Cendant breakup has been a total failure 22 Dec 2006 Henry Silverman s splintering of the hydraheaded conglomerate over the year has resulted in lots of corporate finance fun on Wall Street. But Cendant s pieces are now worth $6bn less than when he started. The breakup revealed the flaws in the underlying business.
Vodafone’s Indian target would be a snip at $13.5bn 22 Dec 2006 It s no surprise that mobile investors seem relaxed at the thought of a big acquisition. The reported price offers Hutchison good returns. The snag is that other bidders may push up Essar's price further. Above $16bn Vodafone would need to sweat to make a deal stack up.
Gazprom airbrushes itself into original Sakhalin deal 22 Dec 2006 That s effectively the agreement the Russian gas giant has just struck with Shell and its Japanese partners. It is paying a proportionate share of the costs in the project so far. Not a great deal for Shell, but it could have been far worse.
Whose friends get to be non-execs? 21 Dec 2006 Funny enough, when US executives got lucky in timing options, so did nonexecs. This bodes poorly for democratic capitalism. Shareholders need to have a greater say in whose friends get to wind up on corporate boards.
Ryanair still a thorn in Aer Lingus’ side 21 Dec 2006 The Irish budget airline may have withdrawn the bid for its rival, but it refuses to go away. It might bid again next year. The chances of winning look slim. But that doesn t mean Aer Lingus management will have an easy 2007.
Sarin walks thin line over potential $13bn Indian bid 21 Dec 2006 There is a rationale. Vodafone wants more emerging market exposure, and Hutchison Essar is a oneoff. CEO Arun Sarin has to try. But it will also be the embattled Vodafone boss first major deal. It is big. It will be expensive. If he does bid, Sarin cannot fluff it. But it will also be the embattled Vodafone boss first major deal. It is big. It will be expensive. If he goes ahead, Sarin cannot fluff it.
Pinault rumour adds bizarre twist to Suez-GdF story 21 Dec 2006 The French billionaire may be planning a bid for all of Suez, followed by the sale of twothirds of the company to GdF. The suggested terms would leave French taxpayers and GdF shareholders worse off. But a Pinault offer could put Suez back in play.
Delta strikes back meekly 20 Dec 2006 The bankrupt airline says that US Airways hostile bid is structurally flawed and that its standalone plan promises greater value. The plan has many questionable assumptions but looks just feasible enough to force US Airways to pony up some more dough.
Stork poison pill frustrates shareholder democracy 20 Dec 2006 A special trust, or stichting, is diluting shareholders to prevent hedge funds from kicking out the Dutch conglomerate s supervisory board. This goes against the spirit of a recentlyadopted corporate governance code. Investors shouldn t stand for it.
MAN-Scania protagonists should talk turkey 20 Dec 2006 The E20bn merger between the two truckmakers is still in stalemate. And politics, not price, is the sticking point. The key players now need to make compromises to get a deal through. If they don t, shareholders on all sides lose.
Thailand scratches at a development sore spot 20 Dec 2006 The government s clumsy effort to stop baht appreciation seems to have worked, albeit at high price in lost credibility. But how should financially fragile poor countries deal with massive speculative fund flows? No one knows, not even China.