GE overpays for growth 24 Nov 2004 Even though Ionics is growing, at a price of 54 times earnings GE would need to double the company s profits to wash its face. This underscores the distance GE is willing to go to capture growth, which could become a risk for shareholders over time.
Management incentives vary wildly in French bids 23 Nov 2004 At Thales, executives are incentivised to fight tooth and nail for a high bid price. Not so at Snecma. The contrast shows that stock options much maligned in recent scandals aren t always bad news for shareholders.
Easyjet faces growing low-cost competition 23 Nov 2004 Overinvestment in the sector has bred overcapacity, which in turn has sapped profitability. Every day, the European low cost carrier boom looks more like the hightech boom that preceded it.
Dexia puts SanPaolo deal on hold 23 Nov 2004 A meddlesome leak that the FrancoBelgian bank was pursuing a crossborder merger infuriated key shareholders. Now they have all but killed the plan. Dexia may still do a deal but only once it has resolved these conflicts.
Investors threaten Karstadt refinancing 23 Nov 2004 Some shareholders argue it should flog more assets and not raise equity. That's frankly barmy. It's like turkeys voting for Christmas. Yet under German law, this trivial challenge could delay and even scupper the refinancing. That seems absurd.
Allianz should find a partner for DKW 22 Nov 2004 The German bank isn t wild about investment banking, but it needs DKW unless it s prepared to dismember Dresdner. The best option would be to find a partner who could bring business to DKW and had an appetite for risk.
Chinese aren’t riding to Rover’s rescue 22 Nov 2004 Reports that China's largest carmaker SAIC will secure the future of Rover s massive Longbridge production line are overblown. Any deal is likely to strip Rover of its last item of value its intellectual property rights leaving Longbridge to fend for itself.
Xstrata goes hostile in A$7.4bn WMC cash bid 22 Nov 2004 The Australian miner has snubbed its bid but Xstrata doesn't want to pay a bigger premium on what it already sees as a frothy share price. So Xstrata is simply bypassing the board and taking its offer direct to investors.
Gold Fields defence moves off the back foot 22 Nov 2004 For the first time, the gold miner has started to talk about value as it tries to repel hostile bidder Harmony. That s good. But there are two problems. The approach is inconsistent with recent strategy. It is also partly valuedestructive.
EDF doesn’t need immediate capital injection 22 Nov 2004 The French utility's supposed capital requirement is a fiction aimed at getting unions to back an IPO. The state is trying to offload a problem on to the markets. Investors may wish to play this game. But they must impose careful terms.
PeopleSoft needs to get on with selling itself 22 Nov 2004 A majority of the US software group s shareholders have voted in favour of Oracle s $9.2bn bid. Yet management thinks it knows better. Management has the option of digging its heels in with a drawnout fight. But that would be more in their own interest than shareholders .
Pharma industry Spitzered at Vioxx hearings 19 Nov 2004 The industry is "doing a Wall Street", with regulators admitting the system is broken and that dangerous drugs are being sold. The immediate fallout will centre on the "bad" blockbusters that have been named. But a wholesale regulatory purge now looks on the cards.
EdF expected to stay in Italy 19 Nov 2004 French minister Nicolas Sarkozy is expected to agree with a governmental commission which backs EdF developing its foothold in Europe. This makes it more likely that the French electricity giant will buy out its Italian partners and minority investors in Edison.
US listings lose appeal for German companies 19 Nov 2004 While the costs of maintaining a listing on Wall Street have risen, the benefits haven t materialised. No wonder German companies are looking for an exit.
Blackstone strikes black gold 19 Nov 2004 The private equity firm s planned IPO of Foundation Coal could create returns that would make even Google's early backers green with envy. It shows that it's still possible to get juicy returns in US private equity if you buy well and sell very quickly.
UK may be suffering from credit fatigue 19 Nov 2004 Abundant lending gave the country a house price boom and a rising trade deficit. But not a more effective economy. With rates rising and lenders more cautious, the debt party could be ending. A weak retail Christmas would be a first sign of sobriety.
Russia delivers Yukos’ coup de grace 19 Nov 2004 Until now, everything that Moscow has done to Yukos its escalating tax bills, even Khodorkovsky s imprisonment was reversible. Moscow s decision to auction off Yukos key oil unit in December truly marks the beginning of its end.
Gold fund launch a sign of speculative fever 18 Nov 2004 The point of the new exchangetraded fund is to cash in on the resurgence of the gold price by luring retail and institutional investors. But it's fairly odd to take what is a hedge against financial calamity and trade it on a stock exchange.
National Grid cheats US curse 18 Nov 2004 Many European utilities have come a cropper in the States. The Grid has avoided the same fate so far by buying shrewdly and cutting costs. That doesn't mean its US adventure can be declared a complete success just yet. There are still plenty of efficiencies to extract.
Another German company shuns IPO market 18 Nov 2004 Tank & Rast isn't the first to sell to private equity rather than float. Several other high profile IPOs have already been pulled this year. Yet an IPO might have offered more value than a sale. The decision suggests a lack of confidence in ECM bankers, the markets or both.
SABMiller outpaces rivals 18 Nov 2004 The South African brewer is growing profits at a doubledigit in every region. Even the US, where the Miller turnaround seems to be working. But there's still one blot on the horizon: the huge potential overhang of stock in the hands of Altria.
SanPaolo in talks with Dexia 18 Nov 2004 It s not obvious why the Italian bank would want to merge or do a joint venture with Dexia, its Belgian counterpart. But Dexia is in a strategic bind and is vulnerable to a French takeover. A deal with the Italians may be a tiny bit more appealing.
Thales minorities should keep their guard up 17 Nov 2004 The scheme may have temporarily gone away. But it probably isn t dead. A scheme for EADS to take over the French defence group might have involved two Thales investors snapping up its crown jewels on the cheap.
Europeans shouldn’t try to prop up dollar 17 Nov 2004 EU finance ministers want a strong dollar, because they fear a weak one will cause European unemployment. But why defend jobs that produce goods for other people? It would be better to use the weakening dollar to spur on labour reforms.
Dixons stokes retail slowdown worries 17 Nov 2004 Its trading update is pretty gloomy. And that matters because electrical retailers are often the first to turn when consumers stop spending. That doesn t necessarily mean a bloodbath in the high street. But evidence of a consumer slowdown is mounting.
Novartis overhauls generics division 17 Nov 2004 Expected job cuts and factory closures at the world's second largest generics producer highlight shrinking margins throughout the industry. Competition has become bloodier since the introduction of "authorised generics", which savage the most lucrative part of the industry.
Santander at centre of Spanish telecom buyouts 17 Nov 2004 A private equity consortium has offered E11bn for unlisted telecom firm Auna, which in turn has offered E2.4bn for cable company ONO. SCH is the spider at the centre of this web. The bank has stakes in both firms. PostAbbey, it is trying to unlock value in its holdings.
Kmart swallows Sears in $11bn deal 17 Nov 2004 Talk about a deal for our time: the merged retailer, led by a hedge fund mogul, will try to take the biggest chainstore, WalMart, headon. Increased efficiencies will help and even create value for shareholders but they won't transform these two tired chains overnight.
VW to disclose individual board salaries 16 Nov 2004 The German carmaker s decision to comply with the German governance code is a highly symbolic victory for the government. Over half the Dax 30 are now committed to disclosure. The rest should fall in line. Legislation looks less and less necessary.
Rules can’t keep speculators out of China 16 Nov 2004 The government s desire for foreign investment makes capital controls hard to enforce. Hot money flows are making the dollar peg expensive. A small revaluation should be enough to drive the speculators away.