UK banking sector set for shake-out 17 Dec 2003 Over the last three years, surging volumes offset falling margins in the UK banking sector to the benefit of all banks. But this doesn't mean higher margins will offset a decline in volumes now the interest rate cycle has turned. A shakeout is in prospect.
Yukos and Sibneft to end Russian oil tie-up 17 Dec 2003 The two firms may treat the split as a separate transaction. That would make the original $11bn deal one of the world s briefest mergers ever.
EDP – another national champion is born, almost 17 Dec 2003 Portugal s plans to carve up statecontrolled energy company Galp and hand out the best bits to utility EDP have hit a snag. Italian oil firm Eni, which owns a third of Galp, opposes the restructuring. It could potentially wreck Portugal s grandiose plans.
Aventis pours E1.5bn into pensions 17 Dec 2003 The FrancoGerman drug company will place E1.5bn into its underfunded pensions plan. While other German companies must use sharp tactics to meet liabilities, Aventis' strong balance sheet means it can easily close the gap.
Iliad readies for IPO 17 Dec 2003 The French internet service provider is coming to market on the back of recent successful technology floats. But the E1bn price tag floated in the press looks punchy.
Novartis nutrition buy may put Numico in spotlight 17 Dec 2003 The Swiss drugs company has acquired BristolMyers medical nutrition business for $385m with the ageing population in mind. Dutch food group Numico, now a pure play on clinical and child nutrition, could be an attractive morsel for likeminded buyers.
BAA will struggle to fund London runways 16 Dec 2003 The government is trying to please everyone by proposing to build two runways first at Stansted and later at Heathrow. But it s hard to see how the airport operator will find the cash to pay for one, let alone two.
The UK consumer starts to crack 16 Dec 2003 Spending growth this year will have been its slowest since the 1960s, despite surging debt levels. The reason for the slowdown is simple: incomes are falling. That s bad news for retailers and politicians, but perhaps not for UK stocks.
Blackstone makes E3.1bn bet on Celanese 16 Dec 2003 The German chemicals company is weighed down by an enormous E1.5bn in debt and pension costs. The bid is a highlygeared bet on the depressed chemicals sector.
Man Group pushes into cash equities broking 16 Dec 2003 The move would pit the UK hedge fund group directly against the big brokerages just when the cashequities business model is in flux. Cynics will say Man is worried its core hedge fund business might slow down. More likely, its eclipsed broking arm is flexing its muscles.
Bondi gets down to business at Parmalat 16 Dec 2003 The restructuring expert needs to compile a statement of the group's tangled assets and liabilities. No one will be keener to see the fruits of his investigation than the Italian banks.
Glaxo sets easy targets on Garnier pay package 15 Dec 2003 Although the agreement removes the most objectionable terms, it still rewards Garnier heavily for middling performance. The UK drug company has announced a tighter pay package for chief executive JP Garnier, but not tight enough.
Suez move increases likelihood of a break-up 15 Dec 2003 The French utility has upped its stake in Belgian subsidiary Electrabel to over 50%. This makes a Suez breakup more, not less, likely. After integrating its energy operations more fully with Electrabel s, as it plans to do, Suez s water business could then be spun off.
Morgan Stanley revives the rainmaker 15 Dec 2003 By unshackling some of its top bankers from administrative duties, the firm is signalling the end of costcutting and a rebound in activity. But there is also a hint of the defensive in the move the firm lost some top bankers and was seen to have lost momentum in the downturn.
Lord Black mulls latest Telegraph bid 15 Dec 2003 Collins Stewart is only the latest suitor to propose a Telegraph sale. While the offer has its advantages, it s probably a waste of time. Black has other options besides selling the Telegraph. After all, you don t become a Lord by owning a handful of newspapers in Illinois.
Safeway caves in to Morrison 15 Dec 2003 After a yearlong wrangle, the supermarket group has extracted a marginally lower price from its suitor than it did in January. It isn't the only grocer to have been sapped by the bid battle. Rival Sainsbury has been too.
Henkel in $3bn Dial purchase 15 Dec 2003 That's a lot to pay for the lowgrowth US soap maker, which has been on the block for donkey's years. Indeed, including debt and few synergies, Henkel's return on investment at 5.5% is pretty unexciting.
Saddam’s capture a boost for markets 14 Dec 2003 To the extent the world is now a safer place, the dollar and equities should rise. Safe haven assets like gold will suffer. Oil will slip. But the effects will likely be shortlived as it s not clear there was much of a war premium or discount embedded in these assets anyway.
Combined offers don’t always live up to their name 12 Dec 2003 Germany's sale of Deutsche Post in a E2bn mix of shares and exchangeables ought to have captured two investor classes in equal measure. But demand from hedge funds blew away interest from conventional investors. Which helps explain the pricing of the transaction.
Parmalat needs independent advice 12 Dec 2003 The food group s investors and banks are divided as it s not clear whom the man brought in to fix things, Enrico Bondi, actually reports to. Bondi must bring in an advisor free of conflicts. But that excludes nearly every investment bank in town.
Microsoft paves way by selling employee options 12 Dec 2003 The US software has sold $382m in underwater employee options to JP Morgan. The software company avoids dilution and employees cash in. The investment bank can profit from any change in Microsoft's stock price.
Bust UK power firms start to see the light 12 Dec 2003 Drax's creditors turned down International Power's restructuring offer. They became owners of Britain's largest power station instead. Now other banks are doing much the same with their portfolio of bust UK generators.
Arbs fail to score off Scor’s rights issue 11 Dec 2003 Arbitrageurs looking to exploit the troubled French insurer's capital raising have hit a brick wall no one will lend them the stock. But there is a consolation. They have at least been offered chunky fees for the subunderwriting.
Empire building alive in private equity 11 Dec 2003 The "buy and build" strategy is gaining favour as making money through financial engineering of LBOs becomes more difficult. But it only works if crunching related companies into a single business yields cost savings and creates a better whole.
MyTravel hits rock bottom 11 Dec 2003 The travel group lost £911m this year. On the bright side, it might survive another 12 months and maybe even make some money in 2005. But it's not yet a credible recovery story. It s hard to see why anyone would buy MyTravel over rival First Choice.
When is a merger a takeover? 11 Dec 2003 The question, at the heart of a battle between Daimler and Kerkorian, sheds light on the many mergers of the 1990s. Not that it matters much in Daimler's case whether it was a merger or takeover, Daimler should never have joined with Chrysler.
UK clothes retailers in a shiver over Christmas 11 Dec 2003 The retail sector has so far been one of the year s best performers, despite slowing sales growth and a worrying economic outlook. A profit warning from Britain s largest discount clothes retailer, Matalan, may prompt investors to reassess the sector.
Tech set for revival – for some 11 Dec 2003 Technology demand from businesses is perking up. But the New Year's presents may not be evenly distributed. While hardware and software companies can anticipate cash, it looks like nothing but coal for IT services.
KPN botches profit warning 10 Dec 2003 And it should ve gotten its facts straight when it did own up. Investors are left wondering just how short 2005 profits will actually be. The Dutch group should have revealed its poor prospects earlier. It sticks in the gullet coming so soon after a E2bn share sale.
Rolf Breuer’s tongue may cost Deutsche dear 10 Dec 2003 Investors must be wishing they could sew the banker's mouth up. The chairman's most recent gaffe has landed the bank with a fat damages claim from Leo Kirch. It is only one of many.