Bristol-Myers doubles down with $4.5bn Imclone bid 31 Jul 2008 The US drugs group s purchase of 17% of the biotech in 2001 for $2bn turned out to be a financial dud. Now, it has made an unsolicited offer to buy the rest for $4.5bn. Even at the lower price, it's still a risky bet but Imclone s rich pipeline increases the odds of success.
Berlusconi should put his own money into Alitalia 31 Jul 2008 The Italian prime minister says he has a plan to save the near bankrupt national airline. The billionaire politician isn t usually shy of mixing business and politics. If he thinks he has a good deal for Alitalia, he should put his money where his mouth is.
May the Schwartz be with you 31 Jul 2008 Bear Stearns last CEO is leaving new owner JPMorgan. Unlike other humbled executives, he probably won t get a golden handshake. But at least he s not facing the same fate that befell Drexel boss Michael Milken being thrown in the slammer. Schwartz just has to find a new job.
What should ACS do with its E7.6bn windfall? 31 Jul 2008 The Spanish construction company has just made a packet from the sale of 45% of Union Fenosa. There are plenty of good ways to spend the cash say repaying debts. But after making 58% on one utility investment, the temptation to do another Iberdrola might prove irresistible.
BT can’t cover its problems with fibre 31 Jul 2008 New boss Ian Livingston hasn t got off to a good start. The UK telecom s much touted services growth engine is falling short. In broadband, it s being hit by rivals BSkyB and Carphone. With cashflow weak, the planned rollout of a fibre optic network looks even riskier.
Is Diageo next on Inbev’s wish list? 31 Jul 2008 The acquisitive Belgiumbased brewer must still swallow its AnheuserBusch gulp. But CEO Carlos Brito shows such a voracious appetite for deals he s unlikely to be sated for long. A run for the top shelf with Diageo is one possibility unless the distiller makes a move first.
ExxonMobil squeezes out a record profit 31 Jul 2008 It s hardly astounding with the oil price peaking above $140 a barrel in the second quarter. But if crude prices hold lower, the $11.7bn profit could be the oil giant s best results for some time and its falling production and rising costs could become a more obvious challenge.
Britain needs a new Mrs Thatcher 31 Jul 2008 As Gordon Brown s dreadful premiership rapidly crumbles, the UK urgently needs a strong leader to slash spending and resist calls for bailouts. But neither Brown s putative assassin David Miliband nor Tory leader David Cameron looks ready to wield the handbag.
HBOS passes one test 31 Jul 2008 The UK lender s shares jumped after surprisingly upbeat interims results. Earnings beat low expectations and the retail arm in particular is bearing up. But writedowns are mounting. And a worsening corporate climate means HBOS shouldn t relax. Tougher challenges lie ahead.
US bails out banks again 31 Jul 2008 This time it s delaying the introduction of accounting rules that would have forced banks to bring $5tn of assets onto balance sheets. Addiction to accounting sleight of hand is one cause of the current crisis. Yet again the US has shown it lacks the will to clean its system.
UK nuclear programme is short-circuited 31 Jul 2008 The sale of British Energy to EDF was meant to launch an ambitious UK nuclear energy programme. The government wanted to boost nuclear power generation, cut emissions and improve energy security. Joint venture deals are still possible, but they may be slower and costlier.
Deutsche Bank finally dials down the optimism 31 Jul 2008 Profit in the second quarter topped expectations but was flattered by tax credits and asset sales. And though the German bank slashed credit risk, it remains more exposed than peers to areas such as leveraged loans. It's no wonder CEO Josef Ackermann is sounding more cautious.
Are CDS traders ready for exchange trading? 31 Jul 2008 Not yet. But they ve committed to using a central clearing house for credit default swap index trades by the end of the year. The goal is to reduce the need for another rescue like Bear Stearns. More prosaically, it could end up letting exchanges into the lucrative CDS world.
US GDP points to further bad weather ahead 31 Jul 2008 Second quarter GDP rose 1.9%, largely thanks to tax rebates. Exports and government spending were growth areas. But weak personal finances and subpar overall growth indicate further credit problems ahead. An official US recession may only be delayed.
Repossession threatens UK with return of 1990s 31 Jul 2008 As UK house prices decline, many highly leveraged homeowners will fall into negative equity. House repossessions could rise sharply and recovery is likely to be slow. But lenders and the Bank of England may be able to help more now than the last time around, only two decades ago.
KKR is worth only $9bn, stock market says 31 Jul 2008 The buyout titan is arguing it s worth $12bn$15bn as part of clever plan to merge with its European affiliate. But it may have been too clever by half. Based on a readacross from that affiliate s share price, KKR is worth a lot less.
Lloyds TSB too cocky in face of downturn 30 Jul 2008 The lender is one of the few UK banks not to have raised capital, and has actually increased its dividend, despite sporting a doubledigit yield. Its subprime exposure may be minimal. But a deteriorating UK economy could bring its capital ratios down to an unhealthy level.
US rich may be in same hole as subprime borrowers 30 Jul 2008 Default rates on superprime consumer loans are rising. That s unsurprising; the top 1% increased their income share by 80% in 19942006 and did not foresee their party ending any more than they foresaw the housing collapse. The rich can be deadbeats too, with much larger debts.
Gas Natural pays through nose for Union Fenosa 30 Jul 2008 Spain s largest gas supplier is paying a whopping E17bn to get its hands on the country s thirdlargest utility a 57% premium to the undisturbed value. Having failed twice to buy an electricity generator, Gas Natural was not about to let this one get away.
ArcelorMittal shows why size pays in metals 30 Jul 2008 The steel giant produced an astonishing $8bn of ebitda in Q2. That's not just because China is crunching through the stuff. ArcelorMittal is still squeezing yet more synergies from its two year old union. That won t have escaped other mergerminded metals giants.
How KKR is taking the O out of IPO 30 Jul 2008 The private equity firm will list on the NYSE without offering shares. It is eliminating the IPO risk by buying an overlapping business that is relatively cheap and has a readymade investor base. It s a clever structure that avoids selling stock in a weak market.
UK mortgage market reshaping won’t last 30 Jul 2008 Repayments to building societies have exceeded their lending for the first time ever. Lloyds TSB, Barclays and Abbey have upped their mortgage market share. But the longterm pecking order is hard to change. When wholesale lending resumes, cautious banks won t want a price war.
Blackstone may have clever scheme for Informa 30 Jul 2008 Teaming up with Dubai World Trade Centre could help it clinch the biggest buyout since the crunch. Blackstone might have found a rich buyer for assets it doesn't want potentially stealing a march on rivals struggling to raise finance.
Bankruptcy could be meal ticket for legal eagles 30 Jul 2008 New York bar exam candidates might be discouraged by news of legal layoffs in the Big Apple. But tough economic times trigger company failures. It may not be sexy and it won t save the world but if there's a consistent winner in the bankruptcy business, it's the lawyers.
Merrill’s CDO sale could inflict pain on rivals 29 Jul 2008 The 40% discount on the already writtendown portfolio puts question marks over valuations elsewhere. The likes of Barclays and Lehman could say the Herd s bulk sale doesn t set a relevant price. But the argument probably won t hold up long. More realistic marks should be coming.
Overseas ambitions won’t supercharge Starbucks 29 Jul 2008 Shuttering US stores may help the troubled coffee chain, but is frantically opening shops in Dubai and Shanghai also part of the answer to its troubles? Problems in Australia suggest not. The company needs to shake its addiction to rapid growth.
BA-Iberia merger wouldn’t just be crisis control 29 Jul 2008 A deal would make sense for both airlines. BA can feed traffic to Latin America, and Iberia avoids turning into a regional airline. Revenue gains could be juicy. But for now, the carriers still have to grapple with costly fuel and fewer passengers.
More banks should follow Merrill 29 Jul 2008 Breakingviews has intercepted an imaginary email to bank bosses from Tim Geithner, head of the NY Federal Reserve, in which he urges them to follow Merrill and hive off their dud assets in a bad bank so that the Fed itself doesn t end up holding the baby.
Alaskan scandal is tip of pork-barrel iceberg 29 Jul 2008 Alaska senator Ted Stevens corruption, if proven, was minor. But it is symptomatic of the specialinterest lobbying including the Fannie/Freddie fiasco that has distorted US economic policy and puts a brake on growth.
Alcatel-Lucent chooses lesser of two evils 29 Jul 2008 The founders of the FrenchUS telecom equipment maker are finally leaving the company created by the merger from hell. Their departure should help end the group s nationalist paralysis. But the timing is awful and without a succession plan AlcatelLucent looks as lost as ever.