Tronchetti merges TI and TIM in clever deal 7 Dec 2004 TI s boss is behaving true to form. He s not being generous to TIM investors, but he s probably done enough to get their grudging consent. The clever bit is that he s using bucketloads of cheap debt to buy in TIM. That should create value for TI.
Reuters and Bloomberg at war: the end of softs 6 Dec 2004 The information giants have traditionally battled each other for market share and Bloomberg has usually emerged the winner. Yet the biggest immediate threat they now face is not each other but the unbundling of soft commissions. For once Reuters may have the edge.
Law firms to create transatlantic giant 6 Dec 2004 The latest UKUS merger involving DLA and Piper Rudnick will be closely watched. Past attempts haven t been wildly successful. This deal should get round some of the cultural problems that have dogged past mergers. The snag is that the commercial logic looks fuzzy.
Wasserstein gets more time to float Lazard 6 Dec 2004 Chairman DavidWeill has given Wasserstein an extra six months to float the investment bank. Wasserstein will leave if he can't. Weill is happy to compromise because he doesn't want to pick up the pieces if Wasserstein goes.
Daimler picks strong man to co-head EADS 6 Dec 2004 The choice of Thomas Enders as joint boss of the FrancoGerman aerospace group shows a determination to counter growing French influence. He will be better able to resist French manoeuvrings and put forward an alternative vision of EADS's defence business.
TIM minorities probably won’t get generous offer 6 Dec 2004 Telecom Italia s E20bn merger with its mobile unit won t be as controversial as its merger with its parent Olivetti. But TIM s minorities look set to receive a measly premium over a slightly deflated share price. Telecom Italia's buyout of its mobile unit's minorities will be less controversial than its last big deal with its parent, Olivetti. But TIM's minorities look set to receive a measly premium over a deflated share price.
Corporate broking becomes new City battleground 6 Dec 2004 Broking used to be a stable relationship business with a few players. Now egged on by changes at Cazenove everyone is chasing them. In doing so, investment banks may destroy the stable business model that attracted them in first place.
Has IBM found a buyer for its PC business? 6 Dec 2004 The US technology company is in talks to sell its PC business to Lenovo, a Chinese computer company for $1bn$2bn. But it is hard to see where Lenovo will find the money. A joint venture may be the way forward.
S&N looks safe – for now 5 Dec 2004 Takeover speculation that boosts Scottish & Newcastle's share price may be the brewer's best defence against an actual bid. But the company remains a key strategic asset in a consolidating industry.
Why is Sainsbury twice as expensive as M&S? 5 Dec 2004 Both retailers are struggling to cope with faltering sales and ambitious turnaround strategies. But Sainsbury trades on 25 times next years earnings, while M&S trades on a p/e of about 10. Why?
EADS power struggle rightly doesn’t worry investors 3 Dec 2004 The European aerospace group s shares continue to rise despite FrancoGerman wrangling over the group s structure and strategy. Strategic uncertainty may not be optimal. But for investors it s better than EADS becoming the plaything of the French government.
Hedge fund uses dubious tactic in M&A battle 3 Dec 2004 A US fund is trying to use its voting power to force Mylan into a valuedestroying $4bn acquistion of King, a fellow US drug maker. Why? Because it has hedged its economic risk to Mylan but kept a big stake in King. Hopefully, this dubious tactic will fail.
Italian rally isn’t quite what it seems 3 Dec 2004 The Mib has outperformed big European indices this autumn. Meanwhile, stock offerings like Enel and Geox have been very successful. But this shouldn t be read as a vote of confidence on Italy s economic prospects. The opposite may be true.
BBVA denies Sacyr board seat 3 Dec 2004 The Spanish bank argues that just because Sacyr says it will buy a 3.6% stake, that doesn t mean it should have a seat. That s quite right. Even if the interloper had a bigger stake, it wouldn't deserve a director. Its intentions are completely opaque.
NTL should hand back proceeds of towers sale 2 Dec 2004 The UKbased cable operator hasn't said what it will do with £1.3bn it has got from selling its transmission business. How about returning it to shareholders? It would give them cash in hand, and make it less likely they'll have to pay a premium for Telewest.
US bond yields could be heading to 6% 2 Dec 2004 The yield on 10year US bonds is up half a percent in six weeks, while the euro bond has been flat. It is the biggest divergence since 2001. There is probably further divergence to come, given that the US faces a much more hazardous financial future than the eurozone.
Hedge fund ethics questioned over Vioxx 2 Dec 2004 A US fund shorted Merck after employing a researcher who played a key role in forcing its blockbuster painkiller to be withdrawn. The researcher didn't reveal his potential conflict. But the hedge fund must have known about it. That's dubious ethics.
Singapore derivatives scandal is a warning sign 2 Dec 2004 China Aviation Oil racked up mega losses on derivatives, despite the existence of apparently strict internal controls. This may have been a naive corporate out of its depth. But at least four major investment banks have also suffered fallout.
Oil price premium continues to unwind 2 Dec 2004 Panic buying and speculators drove the oil price higher this year. Saudi Arabia s oil minister reckons this added $15 to the long run price. That s a fair estimate. It also shows how big the premium has become: about 40% over oil s long run price. No wonder prices are falling.
Sterling deserves to rise against the dollar 2 Dec 2004 The UK economy is less healthy than Gordon Brown claims. But it has much smaller deficits than the US. And a less irresponsible government. Best of all, interest rates are more than twice as high in the UK than in the US. Only a credit crunch could cause the pound to lose ground.
Deutsche uses M&A to fund a bought deal 1 Dec 2004 The investment bank has made a loss on its placing of TUI shares on behalf of WestLB. But that may not be a problem. By arranging a strategic buyer for a similarsized tranche of TUI stock, it ought to have made a turn.
Calpers chief faces ouster 1 Dec 2004 It may seem like Harrigan deserves the axe. His role as a union boss and his loopy corporate governance campaigns hurt Calpers' credibility. Yet the fund's returns have been decent.
Can private equity make money from nursing homes? 1 Dec 2004 Funds have bought up most of the major UK nursing companies in hopes of getting in on the growing market. But the high prices being paid, and the limited scope for cost cutting could make outsize returns a thing of the past.
Russia damned by resource curse 1 Dec 2004 The curse explains why the Kremlin has eviscerated Yukos and wants Gazprom to scoop up the oil firm's guts. It's an ugly situation, but not unique. All developing countries struggle to manage resource booms.
Low dollar and high oil will bring eurozone pain 1 Dec 2004 A shrinking trade surplus with the US could cut 2005 GDP by 0.3%. High oil prices could cause another 0.2% reduction. The stumbling eurozone economy does not need the extra pressure. But an outright recession still looks unlikely.
ThyssenKrupp expansion plans look risky 1 Dec 2004 Boosted by soaring steel prices, the German industrial group has started talking about acquisitions again. This strategy looks risky. Thyssen is already an unwieldy conglomerate with an overstretched balance sheet.
Rexel deal rests on generosity of lenders 1 Dec 2004 The E3.7bn deal only really stacks up for the private equity buyers because banks are prepared to lend huge sums. Why are the banks willing to do this? Because they expect to offload part of their exposure. They had better be quick about it.
Golden parachutes almost never justified 1 Dec 2004 Merck put the issue on the front burner by instituting up to three years' severance for 230 managers in the event of a merger. It said the move was not related to the Vioxx recall. Yet this was about the only justification if a weak one for the plan.