Sainsbury makes indicative offer for Safeway 12 Jan 2003 This is desperate. Antitrust considerations could stymie a bid. And financially stronger WalMart may enter the fray too trumping it. But desperate situations call for desperate measures. Sainsbury can't afford to see Morrison, let alone WalMart, snap Safeway up.
Safeway investors hope for a counterbid 10 Jan 2003 But even if the two decide to have a go, the real sticking point remains the competition commission. The retailer's shares have soared above the value of Morrison's offer in hopes of a counterbid from rivals Sainsbury and Asda.
Richard Lapthorne chairs Cable & Wireless 10 Jan 2003 Lapthorne must cauterise the group s £1.5bn tax liability and break up the business. But how? Both problems will require innovative solutions.
Suez gets back to basics with strategic plan 10 Jan 2003 The French utility s share price jumped on the news. It now looks up on management promises. The next step is delivery. Expect other European utilities think RWE, E.ON, EDF to say the same. The new mantra? Growth is out. Free cash flow is in.
The latest Latin problem for Spanish banks: Venezuela 10 Jan 2003 Angry protestors, nationalisation threats, and "voluntary" debt swaps Venezuela is starting to look like Argentina. If anything, the situation is even uglier. Thankfully, it s also smaller. SCH and BBVA can easily ride out the storm.
New C&W chairman effectively paid in shares 10 Jan 2003 Lapthorne's package may look generous. But it has highly attractive incentive properties which ought to appeal to shareholders. Giving incoming chairmen a significant slice of the upside is an appropriate way to entice recruits into troubled companies.
O2 ready to exit the Netherlands 10 Jan 2003 The mobile operator is in talks with Vodafone, TMobile, and a third party to sell its Dutch operation. The Netherlands has been a burden on O2. The country is Europe's most contested mobile market. Consolidation would be winwin all round.
P/E compression – a new, wizzy investment theme? 9 Jan 2003 Viewed cynically, it is just a synonym for falling equities. However, the idea is slightly stronger than that. For one, tighter p/e spreads are another sign of the end of the two tier stock market.
Fiat plans to split into two 9 Jan 2003 A selfadministered breakup of the troubled conglomerate makes industrial sense. It would also scupper rival breakup plans from outsiders. The bigger question is whether the numbers add up. To finance the plan, E7bn in new cash would be required. That's possible but not easy.
SAP share rise merits caution 9 Jan 2003 The German software group s business shows signs of stabilising. Belated costcutting is also kicking in. But the shares have priced in a smooth path to recovery. That looks optimistic.
Morrison to buy Safeway for £4.2bn 9 Jan 2003 It's not a buyonegetone free bargain. But the deal does stack up financially for Morrison. The question is whether the company which has never done deals can achieve the cost savings it promises.
European M&A lawyers top global league 9 Jan 2003 For the first time in 2002, a European law firm was the world's top M&A adviser. Linklaters paid a price in terms of profits, though. Is the business model of the monster merged corporate law firms really a winner?
Trinity Mirror should demerge 9 Jan 2003 The woestruck Daily Mirror is weighing down Trinity's share. The transparency of a spinout would almost certainly create value. And if Trinity's new boss doesn't act, she'll carry the can if the newspaper's decline goes on. Sticking with the status quo would be daft.
Pearson clings to the FT 8 Jan 2003 The Financial Times isn't at home in the Pearson group. It bust Marjorie Scardino's promises to investors, as she should have foreseen. But that's water under the bridge. Pearson ought to have sold the FT long ago. It is under no pressure to do so now.
Bush tax plan may line tech gurus’ pockets 8 Jan 2003 Forget the ideological benefit. No more double taxation of dividends absolves Gates, Ellison et al from huge personal tax liabilities. See how they could benefit from a 40% dividend payout rate, let alone a special return of cash to shareholders.
Credit Suisse sells Pershing unit for $2.5bn 8 Jan 2003 This is just the latest move by the Swiss bank to repair its tattered balance sheet. Whether it makes any real difference to Credit Suisse s capital position is another matter, however.
DT cable is only a utility 8 Jan 2003 In September 2001, Liberty Media was prepared to pay E5.5bn for Deutsche Telekom's remaining cable business. Now it may just fetch E2bn. This isn't just falling cable valuations. When it blocked the Liberty bid, the German Cartel Office redefined these businesses as a utility.
Colaninno kicks off Fiat charm campaign 8 Jan 2003 The exTelecom raider could bring Fiat two things it lacks: a credible management team and an industrial plan. And Fiat has some assets, and Fresco's 3 puts, that he can exploit. But make no mistake, Colaninno will come with strings attached.
Dixons warns on full-year profit 8 Jan 2003 The retailer was hit by a dismal Christmas, as likeforlike sales growth in the UK ground to a halt. Soggy sales and margins mean Dixons now thinks that this year s profit will be flat.
Benettons struggle to finance Autostrade bid 7 Jan 2003 The deal was only saved at the last minute after Goldman put up E2.8bn of the E10.3bn loan. It has extracted its price. The facility is shorter than the Benettons wanted. Mediobanca, the Benettons main adviser, is left with egg on its face.
Battle lines drawn over credit insurers 7 Jan 2003 Ratings agencies and investors are divided over whether credit insurers should mark derivative losses to models or to market prices. Both methods have drawbacks. But investors should not place too much faith in the insurers models or the agencies motives.
Opec to pour oil on troubled Venezuela waters 7 Jan 2003 The cartel says it is ready to open the taps to stop oil prices rising further due to Venezuela s general strike. Fortunately, it has enough spare capacity to meet 2m bpd of foregone Venezuelan exports. But it has little left for other emergencies.
Small-cap exchanges suffered in 2002 6 Jan 2003 Only the UK s AIM held a steady course with 60 IPOs raising £450m more money than in 2001. But investors holding AIMlisted stocks have less to celebrate.
Vodafone denies Verizon sale plans 6 Jan 2003 The mobile giant hasn't decided to exit its US joint venture yet. Its new boss isn't in place, and it has weeks to make its mind up. But just why should Vodafone use its Verizon put? Its balance sheet does not require it to. And it is hard to see a better US investment.
BHP gains greater control over BHP Billiton 6 Jan 2003 The shock departure of CEO Gilbertson due to "irreconcilable differences" weakens the role of the old Billiton. The new CEO, Goodyear, is an exBHP man. He has solid credentials. But investors in the UK arm may worry power is shifting to Australia.
Rising commodity prices suggest reflation 3 Jan 2003 But only at first glance. The increases are not matched by more optimistic business surveys, or even higher demand. Instead, supply squeezes are mainly responsible. Funds have done the rest of the work, betting on reflation measures yet to come.
DAX not as cheap as it looks 3 Jan 2003 At the end of a year when the index fell 44%, twothirds of the DAX30 companies faced further earnings downgrades last month. Risks from the euro and the public finances outweigh any upside from ECB rate cuts, too. German firms, and their banks, face a rotten year.
No reason this year won’t be bad for stocks 3 Jan 2003 The US stock market is still expensive. Based on Tobin s Q it needs to fall a third to reach fair value. UK and European stocks are more fairly valued. They are also supported by higher dividend yields but for how long?
Tech spending may fall this year – survey 3 Jan 2003 Analysts may soon have to throw in the towel on their 2003 earnings forecasts. With valuations still stretched, tech stocks are cruising for a bruising.
Bondholders fetter new NTL 2 Jan 2003 The cable company has rejigged its planned new $500m loan facility, adding conditions that will seriously limit management's discretion. Who's providing the facility, and insisting on the conditions? NTL's new shareholders. They clearly don't trust management an inch.