UK retail dogs won’t all get bids 23 Apr 2004 Speculation runs high that M&S and Sainsbury will go the way of WH Smith and get taken out by private equity. Sadly not. Their size is so big that M&S and Sainsbury will have to sink further before they become attractive to private equity.
Winner in Aventis saga is likely to be a loser 23 Apr 2004 Novartis looks set to triumph in the battle for Aventis. But it will destroy value. Meanwhile, the likely losers Sanofi and Aventis itself will be the big winners in terms of value creation.
Finmeccanica driven into political deal 23 Apr 2004 The Italian conglomerate is set to inject its noncore energy and transport arms into a stateowned ship builder in return for some equity. It would be better to sell to a group like Siemens, which could rationalise them. But politically the job losses would be hard to stomach.
Rhodia refinancing will only keep wolves from door 23 Apr 2004 The rights issue and high yield bond may not get the company in a position from which it is able to start paying down debt. Rhodia remains a highly speculative investment.
UK house prices accelerate to a crash 23 Apr 2004 The latest upsurge in prices has been driven by speculation alone. As interest rates rise, house prices should decline. But it s not quite as bad as the doomsters say. Expect falls of about 20% not 50%.
Daimler walks away from Mitsubishi 23 Apr 2004 The board may finally be standing up to its imperial boss, Juergen Schrempp, who engineered this and the valuedestructive Chrysler deal. Ending financial support for Mitsubishi is a de facto acknowledgement that the original investment was a big mistake.
Dutch blame Brits for messing up Shell and Corus 23 Apr 2004 There s some truth in the allegations: British bosses did cock things up at both companies. But while the Dutch have a point, they draw precisely the wrong conclusion in trying to hang on to doubleheaded AngloDutch structures.
Don’t count on Sarkozy 22 Apr 2004 There had been hopes that the ambitious new French finance minister would be a champion of liberalism in the land of dirigisme. But his intervention in Alstom s restructuring suggests he is willing to sacrifice liberalism for political advancement.
Private equity outsmarts the taxman 22 Apr 2004 Private equity groups have been pretty good at minimising their tax bill when it comes to taking companies private. Now it looks like they are doing the same when they take them public. Just look at what Texas Pacific is doing with Findexa in Norway.
Sanofi more tempting than risky 22 Apr 2004 Fancy the idea of a fastgrowing stock which may be taken over, but which is trading on only 16 times earnings? Investing in SanofiSynthelabo certainly has its risks. But the balance between risk and reward has shifted in its favour.
WH Smith lets Permira look at its books 22 Apr 2004 After disappointing investors for years, the UK retailer would have had to be brave indeed to disregard a potential 45% premium. What s more, it doesn t look like WH Smith s own plan can promise to deliver more value any time soon.
Allied Domecq needs to add some sparkle 22 Apr 2004 The spirits group turned in a solid first half with a 6% increase in pretax profit. This was largely due to increased core brands sales. The snag is that not all of its portfolio sold well.
Roche turns in healthy first quarter performance 21 Apr 2004 The Swiss drugs group is stripping sales from competitors and has recently launched two potential blockbusters. Better still, margins look set to rise even faster. The shares deserve a higher premium.
German mortgage banks need to consolidate 21 Apr 2004 But they aren t. Instead they are expanding internationally, hoping to dilute their domestic bad debt problems. This looks like a recipe for future difficulties.
JP Morgan caps off Wall Street revival 21 Apr 2004 With this, the last investment bank to report Q1 results, the picture looks unanimously glorious for the industry. It is hard to see how Wall Street can do better than it has in the past two quarters given the challenges ahead.
Greenspan calls end to carry trades 21 Apr 2004 Fixedincome traders are scrambling to adjust to the big shift from deflationfear to inflationfear. There will likely be sharp profit declines in some banks in the quarter, followed by several years of more difficult operations.
Is Yukos about to go bust? 21 Apr 2004 S&P thinks the risk is significant after a court froze its assets. But there are reasons to believe it is not in imminent danger. For the brave investor, shares in the Russian oil company look cheap.
Italy sweats over Alitalia’s rescue plan 21 Apr 2004 There is no shortage of rumours about what the Italian government is cooking to keep its flag carrier afloat. But the EU will probably squash any attempt to bail it out.
Corus shareholders should back board 20 Apr 2004 The Russian oligarch circling the AngloDutch steel group has made some interesting arguments about why the board needs a new director. But they are not compelling. And there are still concerns about what game he is playing.
Tesco dogged by price war fears 20 Apr 2004 The UK retailer has shown yet again that it is capable of generating sparkling growth both at home and abroad. But with Morrison now cutting prices at Safeway, the risk is that Tesco will have to reinvest more of its margin to keep leading the field.
MCI emerges from bankruptcy protection 20 Apr 2004 By all rights, the former WorldCom should have disappeared. The US bankruptcy code exempted it from the laws of Darwinian capitalism. MCI s employees may cheer. But for shareholders in other telecoms groups the joy will only come when MCI's excess capacity is gone for good.
Reality sinks in for Eurotunnel shareholders 20 Apr 2004 The latest traffic figures for the crosschannel operator show revenues keep on shrinking. The cocky new management might have to swallow its pride and fall back on its predecessor s rescue plan to avoid a meltdown.
Private equity firms tap public markets 20 Apr 2004 Wall Street's biggest LBO firms are kicking off IPOs of new funds, bypassing the usual institutional fundraising circuit. The advantages for the firms are plentiful, but so are the risks for investors.
The UK’s EU referendum should concern investors 20 Apr 2004 Few people love the EU, but the single market has created economies of scale and eastward expansion promises growing markets. The referendum might well fail, and without a new constitution some of the EU's advantages could be threatened.
Novartis would pay for defying France 20 Apr 2004 The Swiss company said it would not bid for Aventis without Paris neutrality. Paris has both the methods and motive to hurt Novartis if the group defies its wishes.
Sony Ericsson cashes in on Nokia trouble 19 Apr 2004 The mobile phone joint venture has feasted on the Finnish company s difficulties in releasing stylish phones. But Nokia is likely to slash prices to fight off competitors. Smaller fry such as Sony Ericsson are the most likely to be hurt.
Greenspan should be putting rates up 19 Apr 2004 The Fed chairman probably won t mostly because it s an election year. Failing to act now, in the face of both high growth and negative real interest rates, could well cause real trouble later.
Ahold recovery taking longer than expected 19 Apr 2004 Getting its scandalhit US foodservice unit back to 2002 levels and selling E2.5bn of assets looks more problematic than previously thought. The runup in the shares has probably gone too far until the Dutch retail group can show its recovery has regained momentum.
Shell stops short of its much-needed revolution 19 Apr 2004 The oil giant has ousted the CFO and plans to speed up its corporate governance review. That's good news. But Shell really needs a more thoroughgoing reform of its dualheaded introverted culture if it is to close the valuation gap with BP.
MG Technologies explodes with Dynamit sale 19 Apr 2004 The German conglomerate s E2.3bn sale of its four chemicals units effectively breaks up the underperforming group. MG s shares have bounced 24% since the plans were revealed last September. This sets a good example for other lagging German conglomerates.