PPR isn’t out of the woods yet 16 Jan 2003 There are some glimmers of light in Q4. And the group is taking steps to sort out its balance sheet and structure. But trading continues to be tough, and the outlook for Gucci isn t rosy.
Safeway battle lures buyout funds 16 Jan 2003 KKR and others are poised to enter the fray. At first blush, that sounds crazy. How can they compete with three hungry industry players? But if all three bids or maybe even just two get swamped in a regulatory mire, it could be an opportunity.
Alstom needs to make disposals 16 Jan 2003 The French engineer has made slow progress on asset sales. And not all of it counts towards debt reduction. Falling orders threaten to drain cash. Alstom must sell businesses to keep its creditors on board.
Investors keep trading through the bear market 16 Jan 2003 In London especially, the number of equity trades is climbing sharply. In past downturns, trading has slumped. Technology investment and overcapacity in investment banking are easing the downturn for exchanges.
Regulators want mobile for the few 15 Jan 2003 The UK Competition Commission's likely ruling on mobile termination charges will encourage firms to target the highestspending customers. That makes it even less likely that the 2.5G and 3G upgrade cycles will affect the majority of customers soon.
Corporate bonds are back in fashion 15 Jan 2003 Credit spreads are narrowing. Marginal borrowers like FT with its mooted E5.5bn bond are regaining access to the market. Investors think they have an eachway bet: either the global economy reflates or the Fed bails them out. If only it were so simple.
Cautious Heineken slips in global beer slugfest 15 Jan 2003 If being bold does not suit the Dutch brewer, it should at least hand back more money to shareholders. In a consolidating market, the brewer's piecemeal M&A approach risks turning it into an international alsoran.
Goldman invests $1.3bn in Sumitomo 15 Jan 2003 In return, the investment bank will get a big role in restructuring Sumitomo's loan portfolio and access to its balance sheet. That will help reduce the handicap Goldman faces visavis investment banks with rich commercial bank parents.
M&S momentum holds up 15 Jan 2003 The UK retailer s 7% increase in likeforlike sales is not to be sniffed at. It's a pity M&S thought it could do so much better.
BP asset sale may start oil sector trend 14 Jan 2003 Rising exploration costs mean that oil firms can no longer chase profitability and production growth at the same time. So if profitability is back in vogue, then production can give. Oil majors are long overdue a restructuring of their tail end assets.
Wal-Mart enters Safeway bid battle 14 Jan 2003 With three suitors now fighting for Safeway's hand, this now becomes an intricate game of tactics. Much depends on the competition authorities' investigations, and the bidders' willingness to increase their proposals.
Merger rumours warm up EMI 14 Jan 2003 For now, speculation about an EMI merger does not have much substance. But the global music business is definitely ripe for consolidation. The barrier to a Bertelsmann/EMI deal is that the German group has no cash. That is almost soluble but not quite.
Alcatel shapes up as recovery play 14 Jan 2003 The group probably has the balance sheet strength to make it through the downturn. However, the shares discount a strong recovery in margins next year. It is too soon to say whether that is realistic.
France, Deutsche Telecom credit ratings converge 13 Jan 2003 But why? The two businesses have very different financial profiles. The ratings parity reflects the strength of government support and the momentum behind debt reduction.
BBVA sells Brazilian unit for $800m in cash and shares 13 Jan 2003 This is a neat deal, reducing the Spanish bank s exposure to risky Latin America and allowing it to repatriate $600m in cash. By retaining a 4.5% stake in Brazil s largest bank, it retains a presence in the country and some upside when markets there recover.
Health club operators cornered by private equity 13 Jan 2003 Holmes Place is in exclusive talks with a private equity firm. So is Fitness First. With no trade buyers in sight, both have few options. Investors in the out of favour health club sector can only hope the deals don t fall through.
Sainsbury makes indicative £3.2bn Safeway bid 13 Jan 2003 If the supermarket group could clinch a deal on these terms, it would be valuecreating. Annual cost savings would be £300m. That's a huge "if". Sainsbury may have to make big disposals to satisfy antitrust authorities. And an auction could drive the price higher.
WestLB and Viacom plot Carlton counterbid – report 13 Jan 2003 The owner of CBS is said to covet Carlton, apparently in order to negotiate better merger terms with Granada than current management has. Don't bank on it. Carlton shareholders really would be in luck if Viacom were optimistic enough to want to pay them a premium.
Don’t blame Case for AOL’s massive value destruction 13 Jan 2003 Time Warner's old guard have splendidly vilified Case. But they are the ones who accepted his wildly inflated stock three years ago. AOL shareholders actually have much to thank Case for. Buying Time Warner made them relatively better off.
Vodafone bids E2bn for minorities 13 Jan 2003 The mobile giant is trying to snap up bargains by taking out minorities in Sweden, Portugal and the Netherlands. It is not offering enough. Genuinely independent nonexecutives at the subsidiaries would not recommend the bids to shareholders.
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.