Siemens shows pressures on European industry 24 Jul 2003 The strong euro is beginning to bite. Working capital is drying up as a source of cash. And there is still no sign of revenues rebounding. This is the reality facing business in a postbubble world of overcapacity. But the share price discounts a far rosier outlook.
British Airways mustn’t cave over strike threat 24 Jul 2003 A strike would hurt the airline, but unlike many European rivals, it can afford it. The longterm cost of backing off would be much worse.
LVMH’s Q2 sales slump 15% 24 Jul 2003 While Louis Vuitton continues to defy gravity, the luxury group lesser brands were hit by the horrible environment. These troubles won t stop LVMH from boosting H1 operating profit 3%. But its diversification strategy raises vexing questions.
mmO2 and KPN toy with merger 23 Jul 2003 An expected merger of O2 Germany and KPN's EPlus subsidiary appears to be on indefinite hold as the pair jostle for market position. But there is another option. It appears that managers are toying with the idea of merging the parents instead.
Pechiney, Alcan Q2 results an aside to bid battle 23 Jul 2003 It is clear why. The two aluminium firms' combined operating profit is less than estimated synergies from the mooted merger. To get there, though, two hurdles have to be jumped: the competition authorities, and the price at which Pechiney will sell.
Belgacom provides grist for IPO rumour mill 23 Jul 2003 Minority shareholders have spied a longsought opportunity to exit their investment. The government may wish to go along with this. Or it could be persuaded. But it also has strategic concerns.
Hands’ rescue plan exploits Le Meridien structure 23 Jul 2003 RBS is backing the private equity guru s £150m rescue plan for the luxury hotels group. That may be enough to put Hands back on top. The other lenders are still mulling other alternatives. But they would face even bigger losses if the company gets put into administration.
Sainsbury’s sales still weak 23 Jul 2003 The UK retailer is in the last year of its turnaround plan. Yet its strategy is not delivering topline growth. Worse, excluding petrol, likeforlike sales actually contracted. That leaves the group relying on cost cuts to boost profits.
Allianz dumps Deutsche Boerse stake 23 Jul 2003 The German insurance group has raised E263m from selling its shares in Deutsche Boerse at a 13month high. Achieving the same success will be more challenging for the other quoted investments that Allianz has on the slab.
Venezuela swap signals emerging debt peak 22 Jul 2003 The oilrich but cashpoor country wants to replace its expensive Brady bonds with cheaper debt. This is a case of opportunism, twice over. Venezuela is taking advantage of low interest rates, and a captive investor base.
Investor group hits at C&W share scheme 22 Jul 2003 The ABI is right to worry about optionstyle incentives for nonexecutive directors. But the C&W scheme sidesteps the main pitfalls.
Reuters returns to profit 22 Jul 2003 Thanks to cost cuts, the information group has beaten margin targets and delivered a firsthalf profit despite a 10% fall in sales. It looks like Reuters has a difficult situation well under control. Its share price recovery looks amply justified.
Infineon breaks even in memory chips 22 Jul 2003 With costs tumbling and memorychip prices rebounding, Infineon may prove a genuine secondhalf recovery story. But the recovery story assumes memory prices won't fall back. And the evidence for this is mixed.
Lehman pays $2.6bn for Neuberger Berman 22 Jul 2003 The New York fund manager's partners must reckon there s more upside from investment banking than fund management in a market recovery. Neuberger Berman s top brass are swapping their stock in the asset manager for shares in the US investment bank.
Italian banks face potential Cirio threat 22 Jul 2003 Banks that sold the food group's risky bonds on to retail investors could be forced to stump up cash if Cirio is liquidated. It isn't clear how credible a threat this is. But bondholders are playing hardball and refusing to sign up the group's debt restructuring.
EU firms haggle over energy liberalisation 21 Jul 2003 Portugal says it will finally open its energy market to Spain. But in return Spain has to lift voting restrictions it placed on EdP. This is similar to EdF's hagglings in Italy. In Portugal s case, though, it is a firm Eni that holds the key, not politicians. This is similar to the deal France s EdF has offered Italy. Such haggling is a step backwards for EU energy liberalisation.
Abbey National valuation looks punchy 21 Jul 2003 There is no doubting that the UK retail bank is making headway with its restructuring. But on the information available, it requires an awful lot of faith to justify the current share price.
Ericsson’s new boss enjoys his honeymoon 18 Jul 2003 CarlHenric Svanberg has slashed costs and delivered an early breakeven. The markets have fallen in love with him. The Swedish telecom equipment maker s shares now discount a chunky profit margin. Is Svanberg up to the task?
Animal spirits soar among executives 18 Jul 2003 Following the return of the hostile bid, these deals show executives wanting assets are prepared to go the distance to acquire them. BAT outbid its rivals by more than 50% for Italy's ETI. Barr appears ready to pay a massive premium for Galen.
Tronchetti shores up control of Olivetti/TI 18 Jul 2003 Meanwhile, Mediobanca, a key ally, is buying more shares. Add in other Tronchetti friends and his position seems secure. A buyback of TI shares wasn t fully taken up. But E5.2bn have still been cancelled. That limits Tronchetti s dilution.
Lloyds TSB hints at Scottish Widows sale 18 Jul 2003 Given Swiss Life's failure to sell its UK life unit, it would be hard to see Lloyds getting a good price for an asset the size of Widows. And quitting life assurance would trash Lloyds' bancassurance strategy. But Lloyds has a new CEO who may find it easier to bite the bullet.
Dividend increases all the rage in the US 18 Jul 2003 Spurred by tax changes, many US firms are upping dividends. Investors are delighted. Yet they shouldn t expect much more. Contrary to common perception, US firms overdistribute earnings. Their dividend payouts are already at a ceiling.
BAT buys ETI for E2.3bn 17 Jul 2003 The AngloAmerican group paid 50% more than its rivals bid, yet faces the risk that Philip Morris will end a huge distribution contract. Altadis set the precedent for paying whopping prices in Morocco's tobacco auction. Now BAT has done the same in Italy.
Pechiney mulls partial break-up to foil Alcan bid 17 Jul 2003 Several firms are already reportedly interested in the French aluminium group s packaging unit. For this ploy to work, though, Pechiney would have to extract a really good premium for the business.
ITV governance back in the spotlight 17 Jul 2003 Sniping at the bosses of Britain's merging broadcasters just won't go away. Now shareholders are supposedly trying to sack them both. Changing Carlton's or Granada's existing bosses is not the issue. Shareholders should focus on who will be on ITV's board to back them up.
Big Beer’s new austerity tested in Germany 17 Jul 2003 Two biggish brewers have come up for grabs just as the big brewers have promised restraint towards spending shareholders money. Given the difficulties of Germany s beer market and expectations of the sellers they will be hard pressed to keep their pledges.
Nokia cracks as tech recovery founders 17 Jul 2003 A secondhalf recovery in technology spending looks elusive again as Nokia and SAP disappoint on revenues. Nokia s problems have all come home to roost. Its legendary profit margins are wobbling as commoditisation hits prices and lifts expenses.
Boots interested in SSL 16 Jul 2003 The UK chemist is facing a hard time finding growth opportunities and a bunch of ventures have ended in disaster. The condom and footcare business could be a decent strategic fit. The worry is that Boots could end up overpaying.
Sandy Weill gives up CEO role at Citigroup 16 Jul 2003 He is ceding the role to Charles Prince a lawyer whose main strength is a lilywhite reputation with regulators. But it is not clear how much freedom Prince will have to run Citi. Weill is staying on as a very visible chairman.
Don’t get excited about credit ratings upgrades 16 Jul 2003 A surge in upgrades provides some comfort for the bulls in the credit market. But credit quality is simply worsening less quickly than before. And the economy remains a big risk.