Month: October 2003

Italian IPO finds new way to tempt buyers

21 Oct 2003

Like so many of the tiny companies that make up Italy s economy, Trevisan is illiquid and would find it hard to attract institutional money. So the current owners are offering some downside protection. If results disappoint, they will give new investors some of their own shares.

Market too depressed over Akzo Nobel

21 Oct 2003

The Dutch conglomerate s profitability is under pressure because of growing generic competition to its main drug. But Pfizer s drugmaking tieup with Akzo, and the company s willingness to dispose of some chemicals assets, mean sunnier days lie ahead.

Granada drops support for Green

21 Oct 2003

Shareholders successfully divided and conquered the ITV board, making Green's departure a fait accompli. The balance of power has clearly shifted to Granada. But this shouldn't jeapordise the merger.

Michael Green steps down from ITV

21 Oct 2003

The Carlton chairman and his board have, as expected, buckled under shareholder pressure. It might have been less embarrassing for everyone if they had caught on sooner.

Goldman Sachs cools on Debenhams bid

21 Oct 2003

The investment bank is apparently ready to drop out of the £1.8bn takeover on the grounds that the price for the UK retailer is too steep. That means Permira and Blackstone will have to rustle up more equity and take more risk if they want to stay in the race.

R&D blitz at Novartis squeezes profits

20 Oct 2003

The Swiss group is that latest drugmaker to decide that its product pipeline needs to be fatter and so is pouring cash into research. An industrywide trend is emerging whereby R&D budgets rise faster than profits.

Snow talks up the US recovery

20 Oct 2003

The US Treasury Secretary has sent a flutter through bond markets with his comments that he expects long term rates to rise soon. This is not the talk of someone worried about attracting foreign investors into US bonds. But it is the talk of someone touting US equities.

Carlton board refuses to sack Green

20 Oct 2003

There is talk of a compromise: namely bringing in a nonexecutive deputy chairman to keep an eye on things. But it is hard to see how such a proposal would satisfy the dissident shareholders.

NTL mulls bigger rights issue – report

20 Oct 2003

It may seem ironic that the cable company which raised too much money for its own good has its snout back in the trough. But NTL is loading up on equity rather than debt. That is a sign of the times.

Citigroup heralds better banking bonuses

20 Oct 2003

In the latest sign of a return to better times, Citigroup is letting the belt out on compensation. This may be reasonable. Increases in Citi's other businesses came from a more benign credit cycle. What s not clear is who will benefit most, though judging by results, more traders than bankers will walk home with new Maseratis. In the latest sign of a return to better times, Citigroup is letting the belt out on compensation in its securities business.

European biotech sticks toe back in market

20 Oct 2003

While the US looks to be starting a biotech IPO blitz, only a few European firms are teetering towards listings. This may change but for now this restraint means that there are some attractive candidates around.

ITV battle takes shareholder activism to new peak

19 Oct 2003

It's hard to see Michael Green hanging on as chairman. The issue is whether the entire board dies in the trenches with him. Institutional shareholders have rarely demonstrated such muscle in dealing with a large UK company. They have plotted well.

Network Rail ordered to economise

17 Oct 2003

The UK rail regulator has rightly refused to let the profligate operator increase its spending as much as it wanted. The snag is that there is nothing to stop Network Rail from blowing whatever budget it is set.

Germany struggles to swallow reforms

17 Oct 2003

It is depressing that Gerhard Schroeder s proposed economic reforms have faced such resistance, despite not being terribly radical. Not all is gloom though. Momentum does seem to be building. And passage of the bill could open the way for more reforms.

WestLB names Thomas Fischer as new CEO

17 Oct 2003

This isn t just good news for the landesbank, it may be good news for the whole German banking system. Fischer has the prestige to restructure WestLB. And where it leads, other landesbanks may follow.

Munich Re launches E3.8bn rights issue

17 Oct 2003

The German reinsurer is tapping shareholders for E1bn more than they expected. That minimises the need to sell assets at poor prices. Munich Re said it wouldn t raise capital to just to please the rating agencies. It has climbed down because the market wanted it to.

IPOs enjoy stratospheric debuts

16 Oct 2003

It is nearing the end of the year and 2003 looks like being a bull year for equities. Fund managers have no excuse for underperforming. So the few IPOs ready to launch in the fourthquarter are being treated as manna from heaven.

Murdoch backs down on bonus plan

16 Oct 2003

Does this mean he will retreat in the battle for succession at Sky? If he cares about Sky s value, then he should listen to his shareholders.

BP lays out its Russian stall

16 Oct 2003

40,000 man hours of due diligence were enough for BP to feel comfortable about investing $7bn in Russia, but not investors. BP has not bet the farm on Russia with this deal. Nevertheless, it is still a punt on Russia and on continuing high oil prices.

Battle for Inmarsat looks over

16 Oct 2003

The UK private equity groups have secured a recommendation from the satellite group and irrevocable acceptances from 25% of shareholders. The rival US group's attempt to derail the Brits on political grounds seems to have foundered. It will have to pay up if it wants to win. Apax and Permira upped their offer to $1.5bn and secured irrevocable acceptances from 25% of shareholders. But this auction was never just about price. Inmarsat has also managed to get the Brits to buy into its business plan.

Nokia still troubled by falling phone prices

16 Oct 2003

The Finnish mobile group s push into games could help with phone prices. However, it is not yet clear whether it has got the platform right. But cheap phones still generate lots of cash. And the stock has room to rise if Nokia s investment in games pays off.

Scrooge O’Neal turns into Santa Claus

16 Oct 2003

Even Merrill Lynch s high priest of belttightening is talking about letting out a notch or two. Whether or not this calls the bottom, it is good news for Merrill bankers.

Olimpia brings in financial engineers

15 Oct 2003

The details of the deal are obscure. But there could be a couple of stings in the tail for investors. Marco Tronchetti Provera's latest deal will patch up a key holding company s finances ahead of a capital increase. Marco Tronchetti Provera s latest deal will patch up a key Telecom Italia holding company s finances ahead of a capital increase.

AngloGold tightens its grip on Ashanti

15 Oct 2003

But AngloGold has the firm support of Ashanti s largest investor, Lonmin. Randgold looks outmanoeuvred. The South African miner has upped its $1.4bn bid. This may not be a knockout offer. It s still lower than Randgold s.

Wolfson kicks off biggest UK tech IPO in 2 years

15 Oct 2003

The challenge for investors will be to put a value on an intellectual property company that owns very few patents. With the stock priced at 210p, there's no room for error.

RSA rights issue almost fully taken up

15 Oct 2003

The fall in the UK insurer's share price during the roadshow saw arbitrage funds bet on the issue being left with underwriters. But RSA was not just raising capital. It was seeking longterm investors too. Its success prevented the arbitrage gamble paying off.

Mervyn King says next decade may not be nice

15 Oct 2003

The new Bank of England governor certainly knows how to set expectations warning of greater volatility and higher interest rates. King's points have some validity. But like an incoming CEO, he is also cannily giving himself room to exceed expectations.

Debenhams holds up under pressure

14 Oct 2003

The British department store chain hasn t let either a bid war or the sweltering autumn derail its sales. That s just as well for its two potential buyers, which aren t leaving themselves much room for manoeuvre.

Philips revamp may not be worth waiting for

14 Oct 2003

The Dutch electronics group says its turnaround is nearly there and its semiconductor operations certainly look better. US consumer electronics also remains a sore spot, with profitability delayed again.

FoF Michael Dell coins new TLA in NFW

14 Oct 2003

Are you down with Wall Street s latest ThreeLetter Acronym courtesy of Friend of Frank Quattrone Michael Dell? If not read on. Like Blodget s POS it highlights the way the financial industry became subservient to its clients in the 1990s.