SBC gobbles up AT&T 31 Jan 2005 Given that it is only paying $16bn for the failing longdistance operator, the rationale for the deal looks compelling. SBC expects its acquisition of AT&T to yield synergies with a net present value of $15bn.
Ryanair revels in other airlines’ problems 31 Jan 2005 Ryanair has gained from the collapse of other low cost carriers, and fuel surcharges and higher ticket prices among national carriers. This supported yields during the third quarter. Most important, though, was the remarkable surge in other revenues.
Citi builds a warchest 31 Jan 2005 The $11.5bn sale of Travelers not only marks a break with the firm Sandy Weill built, it makes strategic sense and simplifies the group. The proof will come, however, when Citi redeploys the capital. Lord knows, it has some choice assets to choose from, none of them cheap.
Apax considering Woolworths bid 31 Jan 2005 The collapse of Allders clearly hasn't put private equity firms off bidding for tired old retail dogs. Poor Christmas trading has hit Woolies' shares. But even if Apax gets the UK retailer on the cheap, it will have to work to turn it around.
Investors should be more bullish about oil stocks 31 Jan 2005 The worry is that last year s bumper profits are solely due to high oil prices, which mask deep problems the industry faces. This pessimistic view is a hangover from the oil glut of the late 1990s, when crude prices tanked. It is time the mindset changed.
Dubai buys $1bn stake in DaimlerChrysler 31 Jan 2005 The investment comes at a good time for the German carmaker, whose largest shareholder Deutsche Bank is intent on reducing its stake. But it's more of a strategic move than a financial one. And it s unlikely to benefit other Daimler shareholders.
Politics are big block to Asian currency unity 31 Jan 2005 But it is hard to link currencies. Europe needed the memory of war and 20 years of preparation. Asia is not even close. JP Morgan argues that an Asian exchange rate mechanism would offer regional selfreliance and an escape from the sinking dollar.
UK property companies could enjoy a premium 30 Jan 2005 Traditionally, they ve traded at a big discount to net asset value. That has already shrunk. But the probable launch of real estate investment trusts could justify a premium. That is what happened in Europe and the US.
Fiat can’t count on GM put to solve its troubles 28 Jan 2005 If GM could be persuaded to pay E1bnE2bn to avoid buying Fiat Auto as speculated in the press that would be a coup. But unless Fiat staunches the cash burn at its auto unit, expected to be over E1bn last year, the cash could disappear into a black hole.
P&G acquires Gillette for $57bn 28 Jan 2005 The behemoth may be able to stand up to the likes of WalMart. It will also tower over rivals, forcing them to consider their own deals. Although the price is expensive, the announced synergies more than cover the premium paid to Gillette shareholders.
Kuwaitis bail out of Sanofi-Aventis 28 Jan 2005 The Kuwaitis were never happy with the hostile takeover of Aventis by fellow French drug maker Sanofi and for good reason. Their stake in Aventis was worth E400m more before Sanofi's initial bid.
Lanxess may be the next Rhodia 28 Jan 2005 Bayer s chemicals group spinoff has eerie similarities with its troubled French competitor. Lanxess has mature businesses operating on low margins and under heavy debt. Its future looks bleak if Rhodia is any guide.
Deutsche Boerse puts new pressure on LSE 27 Jan 2005 The German exchange has identified the synergies and outlined the concessions it would make to users if it bought its London rival. But there's still no sign of a raised offer, which is what would really put pressure on the LSE.
Nokia shares would struggle without pay-out 27 Jan 2005 The Finnish phonemaker will return up to 13% of its market capitalisation to shareholders next year. Yet its shares have stagnated. The implication is that shareholders are worried about the underlying business.
SBC homes in on AT&T takeover – reports 27 Jan 2005 At first blush, it s hard to see why SBC would want to catch a falling knife like AT&T, whose sales are plunging by double digits annually. Unless it thinks it would be cheaper to buy AT&T s enterprise customers at 4 times ebitda than to lure them in on its own.
Siemens fails to grasp the nettle 27 Jan 2005 The German conglomerate hasn't decided what to do about its troubled mobile phone business. None of the options are very appealing. Fixing the unit means heavy investment. And shutting it down is politically sensitive. Siemens may have to pay to get it off its hands.
Investment banks beat back universal banks 27 Jan 2005 When credit was scarce three years ago, the likes of Citigroup and JP Morgan grabbed juicy business from Goldman, Morgan Stanley and others. At the time, many thought this was a secular change. But it now looks like a temporary shift driven by the credit cycle.
Spanish government renews assault on BBVA chairman 27 Jan 2005 The Spanish bank has already come under attack from construction company Sacyr, and seen off an investigation by the securities regulator. Now the Spanish attorney general has opened a probe. This politicallyinspired witch hunt does Spain no credit.
Markets ignore Middle East instability 26 Jan 2005 Investors are assuming the violence in Iraq and the possibility of a US attack on Iran won't spill over into wider economic instability. So far this has been the right call. But it may yet prove too complacent.
Flatter yield curve threatens trading profits 26 Jan 2005 US bond yields have been falling, confounding expectations. Short rates have gone up as expected, so the yield curve has flattened. But a flatter curve makes carry trades less profitable. Worse, unwinding leveraged and risky positions could create trading losses.
Hedge funds burned on T-Online trade 26 Jan 2005 The trade was initially a clever arbitrage. But it later became an attempt to bully Deutsche Telekom. The hedge funds who got into this trade late have got their just deserts. Their bet on shaming Deutsche Telekom into paying a premium has failed. DT deserves no exoneration for abusing the TOnline minorities. But hedge funds have only themselves to blame for piling into the stock.
Securitisation may advance tropical drugs funding 26 Jan 2005 Using sophisticated financial engineering to help the poor pay for drugs may seem like a crazy investment idea. But it isn t. Tropical drugs have been overlooked by mainstream investors. That creates an inefficiency that can be exploited.
Allianz issues pioneering E1.2bn equity derivative 26 Jan 2005 Derivatives are a common way for insurers to cut their equity exposure. But this one will be sold publicly. It's part of a E4bn fundraising, in which Allianz hopes to exploit investors' current appetites rather than dumping shares on the market.
Edison minorities could suffer from EDF deal 26 Jan 2005 Wily Italian politicians may try and squeeze concessions out of France in return for helping solve EDF s scrape. Some, like Enel, might benefit. But investors betting on a bid for Edison s minorities could be disappointed.
Fiat/GM saga is a lesson in sugar daddies 25 Jan 2005 When their partnership started, shareholders in the Italian group viewed GM as their rich saviour across the ocean. But with GM itself now poverty stricken and the relationship turned sour, the best Fiat can hope for is a halfdecent divorce settlement.
Hostile bids may make comeback 25 Jan 2005 But low rates, the dismantling of poison pills and a dip in share prices mean hostile activity may make a comeback especially in the US. The boomlet in early 2004 when Sanofi went for Aventis and Comcast attacked Disney fizzled as rising stocks took away easy bargains.
Karstadt’s equity and debt prices are hard to square 25 Jan 2005 The German retailer s debt is trading at stressed levels but its equity is still richly valued. This kind of anomaly is normally arbitraged away. In Karstadt s case, the trade is hard to put on. But that won t last forever.
Merrill Lynch pays for excessive cost cuts 25 Jan 2005 The firm's Q4 results illustrate the difficulty of playing catchup. Costs are rising faster than underlying revenues. Rebuilding a business is not easy. But Merrill does not appear to have learned this lesson after its brutal bond market cull of 1998.
Lufthansa tries to wriggle out of BMI put option – report 25 Jan 2005 Were the German airline to do that by selling its stake in BMI, it could restart merger talks between Virgin and BMI. But it's not clear that Lufthansa really needs to sell; nor that it is in BMI's interests to exercise the option.
Nordic media battle turns into a melee 24 Jan 2005 To protect itself from a hostile bid, Finland s Alma Media now plans to break itself up. That s fine. But the way it wants to do so is not. The firm that will eventually buy Alma s assets has offered cash and stock. But as it is unlisted it s tricky to value the competing bids.