Month: July 2004

Software market still in doldrums

12 Jul 2004

SAP s good sales figures aren t a sign of recovery, rather they highlight fallout from the OraclePeopleSoft saga. Oracle s merger attempt and last week s welter of warnings from small software companies point out that the industry has stagnated.

De Beers sheds outlaw image

12 Jul 2004

The diamond producer has made peace with the US government. That will make it easier to support the brand. The company thinks it can keep the premium price on diamonds, even without a selling monopoly. It just might succeed.

BSkyB should gear up

11 Jul 2004

The UK paytelevision group is throwing off cash so rapidly that it could disgorge £1.6bn over the next two years. A buyback or special dividend would go a long way to demonstrate that the revamped board cares about shareholder value.

Forbes editor’s murder highlights Russian crisis

11 Jul 2004

The assassination of the campaigning financial journalist comes amidst a banking crisis and the Yukos saga. If Putin wants to dispel Russia s Wild East image, he must leave no stone unturned in nailing the editor s killers.

Pru CEO enters tricky period

11 Jul 2004

All things being equal, a drawnout auction wouldn t damage CEO Jonathan Bloomer since the bank is a small disposal for the UK insurer. But all things aren t equal. Bloomer s credibility was already low before the auction began. This week will be six months since Jonathan Bloomer revealed the UK insurer had put online bank egg up for auction. Bloomer s credibility was low in January. While the deal is relatively small, protracted negotiations will fuel mutterings about his future.

Commerz should rethink securities business

9 Jul 2004

Commerz should rethink securities business Commerz has long had ambitions too big for its balance sheet. Keeping Dalman suggests that they are still confused. Mehmet Dalman, head of Commerzbank Securities, denies reports that he was planning to leave. That may be so, but his business is a bad fit.

That means Philips and LG, the owners, have missed the best moment to float the business.

9 Jul 2004

Operating profits are booming at the flat screen maker, yet prospects for a successful float aren t. Falling flat screen prices leave the group looking well past its sell by date. Profits have shot up at the flat screen maker. But they are probably at the peak.

M&C Saatchi slashes IPO price

9 Jul 2004

That was essential given falling share prices in the advertising sector. To get the deal away, the advertising group not only had to cut the value by about 18%; the founders had to sell fewer shares.

Oil majors heading for record Q2.

8 Jul 2004

It doesn t get much better than the second quarter for the oil industry: soaring oil and gas prices and stellar refining margins. Investors have been bidding up shares, but momentum may stall. The chance to ride the rally indiscriminately has probably passed.

Putin is the winner in the Russian banking crisis

8 Jul 2004

More banks might fail. But the government is not too concerned. Banks support crime and are potential political rivals. The lesson for foreigners is simple. The power is with Putin. And the President likes prosperity, but he likes a strong state more.

Pages Jaunes squeezes the max from IPO

8 Jul 2004

The IPO's unusual fee structure got the banks selling hard and denied new investors much of a discount. France Telecom used other tricks to squeeze a high price out of its investment. In a tough market for IPOs, it has done well.

Sainsbury remuneration vote to expose family’s weakness

8 Jul 2004

The retailer s controlling family can t really vote for the remuneration report following the Peter Davis fiasco. It can t easily vote against, either, given its previous support for Davis. But an abstention will just underline its impotence.

Siemens’ new chief needs to slim the group

8 Jul 2004

The German conglomerate has had middling performance over the past 12 years under current boss Heinrich von Pierer. Ridding itself of a few of its 13 divisions should improve performance.

M&S rejects Green – softly

8 Jul 2004

Although the UK retailer says Green's 400p proposal undervalues it, it has left open the door for shareholders to take a different view. The soft rejection makes Green's task harder. But this battle will still be determined by how good a defence M&S comes up with on Monday.

Symbian goes for growth, not profits

7 Jul 2004

After Psion s exit from the joint venture, the software company is raising capital and increasing investment. Symbian sees a chance to kill off Microsoft s ambitions in mobile phone operating systems.

Private equity firms grapple with succession

7 Jul 2004

The industry is for the first time dealing with generational change, with founding partners considering greener pastures. While there will be a temptation for some firms to sell out, the economics of the business don t make that an obvious choice.

Green finally makes interesting M&S offer

7 Jul 2004

The board cannot reject the 400p a share offer out of hand not least since it is acceptable to Brandes, its largest shareholder. There are some queries about Green's financing. But M&S will only be able to see him off if it comes up with a compelling defence on Monday.

Italy’s experiment in strong government is failing

6 Jul 2004

The EU is right to let the Berlusconi government off the hook on the deficit. Italy is no more irresponsible than its neighbours. But the Prime Minister is losing authority. Political paralysis is the likely result. And that is bad for growth.

Burger King could be a hiccup for Diageo

6 Jul 2004

The abrupt resignation of Burger King s boss raises questions about the performance of the fastfood chain. Since Diageo is still on the hook for $1bn of the LBO s debts, this may cloud the outlook for the spirits group.

Green told to put up or shut up on M&S

6 Jul 2004

The takeover panel has given the retail entrepreneur only one month to construct a bid for the company. This makes Green's already hard task even more arduous.

Henkel slashes sales growth target

6 Jul 2004

The German retailer's problems at home stagnant markets and tougher price competition have spread further across Europe. Henkel saw trouble ahead hence its purchase of America's Dial. But bedding down this deal well is now more important than ever.

Putin should come clean on Yukos

6 Jul 2004

The Russian government keeps sending conflicting signals about what it plans to do with the country s largest oil company. That may suit the Kremlin s purposes to some extent, but it is wreaking havoc on the Russian market.

Green needs to woo M&S pension trustees

6 Jul 2004

Trustees may be worried that a leveraged bid could increase the risks of a pension scheme already in deficit. If Green can't convince the trustees he is someone they can work with, he will have trouble drafting a firm bid.

Finance minister’s ouster bodes ill for Italy

5 Jul 2004

Tremonti may not have been a great success. Italy s accounts are stretched, and it hasn t stopped propping up failing groups like Alitalia. But Italy is now minus a finance minister. And it is hard to see the weakened government appointing a very good one.

Meggitt buys Dunlop Standard for £787m

5 Jul 2004

To finance the acquisition of a business larger than itself, Meggitt had to be creative. The defence firm has agreed to sell off half of the business to private equity, and to hold a £181m rights issue.

Hicks Muse rushes Premier Foods to market

5 Jul 2004

With an enterprise value of nearly £1bn, the grocery products maker is being priced below earlier estimates. Difficulties in some units hurt valuation. For the float to succeed, investors need to be convinced of the group s defensive qualities.

Stelios would struggle to buy Easyjet back

5 Jul 2004

Easyjet s founder would be making a cheeky move if he tried to buy back the airline on the cheap. But who will back him? He himself warned that entrepreneurs shouldn't hang on to their creations too long.

Man Group dealt blow by Credit Suisse

5 Jul 2004

Other institutions have filled the hole left by CS. But how long will investors remain starstruck if fund performance is lacklustre? The listed hedge fund group has seen CS cut its exposure to a fund of "star" managers by $2.2bn. The listed hedge fund group has seen CS cut its exposure to a fund of "star" managers by $2.7bn. Other institutions have dashed to fill CS's shoes. But how long will they remain star struck if former fund performance fails to return?

Sainsbury’s governance not that dysfunctional

4 Jul 2004

The palace coup that ejected Peter Davis shows shareholder power can be felt even in unfertile areas. Despite being effectively controlled by a family, the voices of minority shareholders still got heard.

D&B is the new game in UK finance

4 Jul 2004

That stands for disposals and buybacks. Best practice is now to recycle all the proceeds from a disposal. Low interest rates and investor scepticism about M&A are driving the trend. Those doing it, like Centrica, are rewarded.