Boots hit by margin squeeze 30 Sep 2004 The UK retailer's lower prices haven't produced as much growth as hoped, and gross margins have been hit more than expected. Despite the disappointment, Boots is sticking to its guidance for the year. But achieving that looks an increasingly tall order.
Lehman in early talks to buy back GLG 30 Sep 2004 First JP Morgan buys Highbridge, now Lehman seems to want to buy back GLG, a big UK hedge fund it spun off in 2000. Buying into private equity at the top of the cycle five years ago cost banks dear. Is this the next bandwagon?
Polygon caves in on British Energy restructuring 30 Sep 2004 The hedge fund's oppostion to the deal was misconceived, and risked leaving shareholders with nothing. That it has finally given up is the right outcome. The company can now get on with its restructuring.
Private equity goes asset light 30 Sep 2004 That s the impression created by some recent deals including two buyouts this week of talent agencies and the bidding for Grey Global. Though these businesses may not be as light as they appear, they come with substantial risks.
Merck in serious trouble after Vioxx withdrawal 30 Sep 2004 The US drugs giant has stopped selling its blockbuster arthritis treatment because the pill increases the risk of heart attack and stroke. If investors seem to be panicking, it is because the withdrawal compounds other problems: a dry pipeline and generic competition.
Berlusconi to sell off 20% of Rai 30 Sep 2004 This may sound radical, but it's a pale apology for privatisation. Rai will remain mainly stateowned and probably taxfunded. So why is the government pushing it through? One theory is that it wants to head off more radical change.
Orbitz falls into Cendant’s grasp 29 Sep 2004 America s airlines may be desperate, but you wouldn t know it from the $1.25bn they got from Cendant for their online travel company. Cendant justifies paying 17 times forward ebitda by forecasting huge synergies. Refreshingly, shareholders aren't buying it.
Why has Telecom Italia raised more cash? 29 Sep 2004 The group says its $3.5bn bond issue will go towards repaying debts. But it already has masses of liquidity. However attractive the terms, the fundraising suggests Marco Tronchetti Provera may be plotting his next strategic move for TI.
Warner Chilcott points way for more buyouts 29 Sep 2004 A private equity for Chilcott looks like an opportunistic move to take advantage of the depressed valuations of midcap pharma. And the company isn t even the best value of the lot. Shire looks vulnerable.
Commerzbank securities boss quits for hedge fund 29 Sep 2004 The German bank wanted its investment banking arm to focus on its German Mittelstand clients; Mehmet Dalman didn t. Commerz is now likely to retreat to Germany, taking more capacity out of the equities business.
China may upset the dollar’s defenders 29 Sep 2004 Dollar bulls need Asia to carry on subsidising the US deficits. They say a structural shift in the currency market means it will. But their view ignores reality, and what the Chinese are now saying. A painful move back to equilibrium is almost certain.
Oil companies should be hedging 29 Sep 2004 The oil price may be at $50, but some oil chief executives predict it will soon fall back to $30 or lower. With the forward curve at record levels, they should be protecting themselves against a fall.
ConocoPhillips makes a $2bn bet in Russia 29 Sep 2004 By taking a 7% stake in Lukoil, the US oil and gas firm is the latest to blaze a trail in Russia. That may seem risky given the Yukos saga. But it is actually a smart move. The stake allows it to access valuable projects and reserves in Russia at a reasonable price.
Commodity price spikes won’t ignite inflation 29 Sep 2004 Not by themselves. The sector is too small. But it can cause significant psychological damage. And cut profits for customers. The best answer is more investment. Producers are reluctant, because they like current profits. But they cannot resist forever.
Suez tightens grip over Electrabel 28 Sep 2004 The French utility has parachuted in its chief operating officer and possibly its chairman into the top two jobs at the Belgian utility. This may not mean that Suez will buy out Electrabel's minority shareholders any time soon. But it does make an eventual move more likely.
Could Sainsbury be the next LBO? 28 Sep 2004 A deal has some logic. But probably not at a price that the controlling Sainsbury family would now be willing to accept. Potential buyers will have a better chance if Justin King, the new CEO, slips up.
Fideuram loses second boss in one month 28 Sep 2004 Fideuram now has a vacuum at the top and risks significant outflows in its assets under management. The asset manager's top executives seem to have trouble getting along with with SanPaolo, its major shareholder.
KarstadtQuelle sells assets, equity to survive 28 Sep 2004 Selling businesses and cutting costs is a start. But it won't turn round the core department store business. After years in denial, the German retailer has finally faced up to the grim reality of its situation
Virgin Mobile update knocks it below IPO price 28 Sep 2004 A price cut imposed by the regulator will hit the virtual operator harder than it will carriers which have built their networks. Maybe Sir Richard Branson was right to float the business when he did. The virtual model looks less beguiling when growth slows.
Rents should be allowed to fall as well as rise 27 Sep 2004 But that s not how it works in the UK, where rent reviews are upward only. The government wants to mandate flexibility. Defenders call on economic theory. But the theory is misleading. Landlords should take more risk.
Cemex to buy RMC for £3.2bn 27 Sep 2004 The Mexican cement producer has launched a knockout bid for the UK concrete business a 40% premium paid in cash. The industrial logic behind the deal is sound. Nevertheless, the synergy target provided to justify the premium looks ambitious.
Apax, Cinven buy E2.1bn VNU directories 27 Sep 2004 The Dutch media group looks to have cut a good deal with private equity buyers. That is probably less to do with quality of the directories business and more to do with the appetite of private equity for deals.
JP Morgan buys controlling stake in hedge fund 27 Sep 2004 There are benefits to both sides. In particular, control gives JP Morgan more confidence to place institutional money with the fund. But the deal also creates potential conflicts.
Lazard prepares to buy out capitalists 26 Sep 2004 On paper the plan makes sense. The merger firm s nonworking partners represent a governance stumbling block to an IPO. Moreover, using IPO proceeds to restructure the group would be preferable to cashing out working partners, who have more work to do yet.
Lazard asks bankers to take pay cut – reports 26 Sep 2004 Nothing new in this. German car companies do it all the time. But it's rare for an investment bank. The bankers may cave in if it means a successful IPO. But that's not certain either.
Bush and Kerry ignore real health cost problem 24 Sep 2004 They argue about how much more to spend, but the US already has lots of health care. In international terms, the country gets a bad deal. The government could do a lot to help. But neither candidate has the courage to suggest that less could be more. They argue about how much more to spend, but the US already spends too much on health care. The system needs a big shake up.
Alitalia reaches deal to split itself in two 24 Sep 2004 This looks like a case of sneakily injecting state aid into Alitalia. The EU should be on guard. A deal with the unions has cleared the way for the airline to split its flight and ground service units, leaving its debts with the latter.
Converium pays for bungled crisis management 24 Sep 2004 Reports that it has sought aid from the frugal Warren Buffett show how dire its situation has become. Perhaps more decisive action at the outset would have prevented this outcome.
Tiscali’s investors get their hopes up 24 Sep 2004 This looks premature. The Italian internet group needs cash, and it is unlikely to raise what it needs from its asset disposal programme. Selling one of its bigger operations might do the trick; but if it can't or won't do that, a share issue is still a possibility.
Barclays in bid talks with South Africa’s Absa 23 Sep 2004 With Absa trading on a low earnings multiple, and presenting scope for synergies, Barclays should be able to make a £2bn approach stack up. So why is Barclays stock being punished? Perhaps investors had convinced themselves it was going to be acquired not an acquirer.