PeopleSoft surrenders to $10.3bn Oracle bid 13 Dec 2004 Two ballsy moves by Larry Ellison, the head of Oracle, sealed the merger of the two US software groups. To make the merger pay off, Ellison will have to renege on a promise not to slash and burn at PeopleSoft.
Unilever should be broken up 12 Dec 2004 There is no longer any compelling reason to keep the food and household products divisions as part of a single group. A demerger of the £33bn giant could generate an increase in value of up to 20% for shareholders in addition to any gains from greater focus.
Banks use 80:20 rule to set bonuses 12 Dec 2004 Banks believe the top fifth of their staff bring in most of the profits. So increasingly the lion's share of the bonus pool goes to them. It all means less in the pocket for runofthemill bankers.
What’s Tronchetti’s next big deal? 10 Dec 2004 Maybe a merger of Pirelli and Olimpia, two of the companies through which he controls Telecom Italia. Nothing is likely to happen soon. But Tronchetti is now in a position to squish these boxes without losing control.
Forgeard threatens balance of terror at EADS 10 Dec 2004 The Airbus chief is increasing the stakes in his bid to become sole chief executive of the FrancoGerman defence group. The Germans have indicated they won t be bullied. Forgeard s strategy can only damage his chances of getting the joint chief executive post.
Xstrata tries to crush hope for better WMC offer 10 Dec 2004 The Swissbased miner s threat to lower its A$7.6bn ($5.6bn) offer looks like bluff. But WMC shareholders may not find a better deal. The Australian miner s defence is not persuasive. And no others bidders have emerged.
Nextel, Sprint in merger talks 10 Dec 2004 The longawaited next stage of US mobile consolidation is on. And because it might be the last big one, a larger battle may be brewing. Based on the Cingular/ATTW deal, a NextelSprint combo might squeeze out $1.7bn of synergies. But Verizon may think it can do much better.
Cazenove shares rise after JP Morgan deal 10 Dec 2004 They ve risen by 14% since the last trade before the deal, and now value the firm at £870m. That s certainly a vote of confidence in the JPM deal, but not yet a ringing one.
ABN the latest foreigner to face Italian fight 10 Dec 2004 ABN, like Spanish bank BBVA, risks being marginalised. But this slap in the face is so egregious it might lead to a backlash. The Dutch have patiently wooed Antonveneta. But now Lodi has put a spanner in the works with a rival scheme to buy the bank.
Smiths’ conglomerate strategy works – for now 10 Dec 2004 Investors cheered the UK engineering group s acquisition of Medex. Its four pillars haven t landed it with much of a conglomerate discount. More bolton acquisitions could make sense. But in the long term, the best option may still be to break itself up.
Osmond prepares ballsy plan for HHG life assets 10 Dec 2004 The leisure entrepreneur has paid £1bn to secure the UK s largest closed life fund deal. That s a rich price. To make it pay he must boost returns on the fund s £26bn asset base, using derivatives or even hedge funds. Will the regulator let him?
France slashes stake in Air France 9 Dec 2004 Investors should welcome the deal, so the shares ought not to be hit too hard by the sale of such a large slab of stock. The French government will reduce its stake in the airline by more than half, if Air France staff accept pay cuts in return for shares.
Large CFD positions should be disclosed 9 Dec 2004 In theory this shouldn t be necessary. There are rules designed to prevent CFDs being turned into voting stock. But it's easy to bend the rules. This may not matter very often, but it does matter in M&A situations.
Vivendi Universal sells 15% of Veolia 9 Dec 2004 The deal has been cleverly structured to preempt an overhang of stock when options over the shareholding expire later this month. VU will make a big capital gain that can be offset against tax losses. This will cut pressure on it to make more disposals for tax reasons.
Should Snow have kept his job as Treasury secretary? 9 Dec 2004 President Bush deliberated for weeks before asking Snow to stay on as US Treasury secretary, suggesting he has doubts about Snow s ability. So he should. Snow has done little to rein in US deficits other than to pursue the potentially perilous trick of cheapening the dollar.
Can Duke Street finally get shot of Focus Wickes? 9 Dec 2004 Two years after an aborted floation, the private equity house has put Britain s third largest DIY group up for sale. Finding a buyer for the tradeorientated Wickes won t be hard, but it may struggle to offload the consumerorientated Focus chain.
Wall Street cheers Spitzer’s run for governor 8 Dec 2004 That may sound odd. After all, the NY attorney general made bankers' and fund managers' lives a misery with his probes and $4bn settlements. The thinking is that his campaign and need to raise money will soften him up, or at least occupy him for a while. Don t count on it.
Investors should avoid Karstadt rights 8 Dec 2004 The German retailer's lenders don't believe in its rescue plan. The rescue loan they have made is hedged with incredibly tight covenants. Add that to the fact that the group is undercapitalised, and it looks like investors would be chucking good money after bad.
Tronchetti secures leverage of over 300:1 8 Dec 2004 The Telecom Italia boss is financing the E21bn takeover of TIM with only E60mE70m of his own money and still keeping control. Tronchetti has managed this while also shoring up his empire s rickety financial structure. Quite a feat.
Gold Fields troubled after Iamgold deal rejection 8 Dec 2004 Its strategy is discredited, and it faces two big hostile shareholders. There is no easy way forward. It could try to sell its international assets and buy out the dissidents. Or it could just tough it out, maybe with new management.
Fourtou digs in for long haul at Vivendi 8 Dec 2004 That is what the change in the group s structure suggests. Fourtou goes upstairs as chairman, but stays in charge of strategy. This frees him from the daily grind. It also suggests he is more likely to preserve the Vivendi empire than dismantle it.
Morgan Stanley reverts to type with TeliaSonera sale 8 Dec 2004 The bank outbid rivals for Finland s latest share sale. Yet only last week it persuaded Germany not to use an auction for a similar deal. Ironically, the path of the TeliaSonera sale shows why auctions may not be a great idea, especially for the bank that wins.
Can a E300m fund force an E18bn company to split? 8 Dec 2004 Knight Vinke, the tiny hedge fund that played a part in forcing Shell s restructuring, aims to break up giant French utility Suez. The odds appear too long. But the kerfuffle could put the consolidation of Suez s Electrabel subsidiary on the front burner.
Romiti plans another pop at Wind 7 Dec 2004 The Italian entrepreneur s first approach for the E12bn telecoms group was skimpy and lacked deliverability. Romiti will have to do a lot better with his second approach to be taken seriously.
Gambro sells half of itself for $3bn 7 Dec 2004 The Swedish medical group has agreed to sell its US dialysis business to DaVita at a 40% premium to recent deals. But getting this deal past regulators will be tough, given the industry s concentration and monopolistic practices.
Investors play with fire in Gazprom share trade 7 Dec 2004 Gazprom's share price has rocketed this year even though the Russian state is about to become the gas monopoly's majority owner. That looks illogical, given Moscow's scant regard for investors' right in the recent past. Yet ironically, it is Gazprom's main attraction.
Hedge fund activism strikes in Holland 7 Dec 2004 Two established hedge funds are seeking investor support for a shakeup at Dutch food conglomerate CSM. Hedge funds have rallied bond investors around common causes in the past. But it s tougher pulling off the same trick with shareholders.
Italian government’s accounts called into doubt 7 Dec 2004 Italy used dubious accounting techniques to keep its debt below the Stability Pact limit. So what? None of the big eurozone countries really want to balance their budgets. Italy has just been a bit more creative than most.
Credit Suisse to trust CSFB with risk once again 7 Dec 2004 The investment bank s new strategy is to expand its proprietary trading desk and be more selective about its products and clients. The goal is for CSFB to earn SFr3bn in 2007. But the challenge will be to manage the inevitable conflicts of interest.
J&J considers $24bn buyout of Guidant – report 7 Dec 2004 While this would be just the latest in a string of deals involving medical devices manufacturers, it would be the most important by far. Not only would it be the biggest, but it could trigger further consolidation.