Deutsche Telekom plans E3bn bond 11 Jan 2005 The German telecoms group is tapping the market on extremely favourable terms, in stark contrast to its position a few years ago. However, the new issue is forcing DT's existing credit spreads wider a sign that the telecoms credit revival has already peaked.
Hedge funds gird to battle Murdoch 11 Jan 2005 News Corp s $5.9bn mopup values Fox in line with rivals, but without much of a takeover premium. It s hardly a full offer. Fighting Murdoch won t be easy, especially if he really has no strategic reason to do the deal. But a sweetener is not out of the question.
Karstadt 2004 sales fall 7% 11 Jan 2005 The German retailer s fourth quarter was particularly poor, despite signs of a pickup in overall German retail sales over Christmas. Much now hangs on Karstadt's disposals plan. The poor performance of its speciality stores will make them harder to sell.
Analysts’ pay halves since boom 11 Jan 2005 It s no surprise that average pay rates have fallen. After all, the investment bankers no longer subsidise research as they did preSpitzer. But not all analysts are as badly off. Investment banks are desperate to find the stars of the future and pay scales reflect that.
Markets are right to ignore UK political fight 11 Jan 2005 The spat between Blair and Brown may mean that one of the government s most powerful figures will leave after the expected May election. But whoever goes, current policy trends will likely continue. Taxes and spending will creep higher, but without causing a fiscal disaster.
News Corp to buy Fox minorities for $6bn 10 Jan 2005 Murdoch has long said Fox is "cheap". And now that News Corp has a US listing, the rationale for a Fox listing has gone. The proposed deal also suggests that Murdoch no longer feels quite so spooked by John Malone, who lately doubled his stake in News Corp.
Alltel bids $6bn for Western Wireless 10 Jan 2005 After two very big deals, it would have been easy to conclude the consolidation of the US mobile industry was a fait accompli. Not so. While the NextelSprint and AT&T WirelessCingular mergers rocked the mobile landscape, the aftershocks are now becoming apparent.
Hedge funds enjoy strong Q4 10 Jan 2005 A surge of endofyear corporate activity was a boon for eventdriven funds. But other strategies are still delivering soggy performances. Against that backdrop, it would not be surprising if some eventdriven funds took the opportunity to sell up while things are looking rosy.
Telecom investors complacent about risks 10 Jan 2005 The sector has rallied by more than 20% in six months, suggesting investors are confident about the outlook for dividends. But telecoms companies have started getting the chequebook out again and there is the prospect of further secondary offerings.
Economists overrate the pursuit of happiness 10 Jan 2005 The economics of happiness is a flourishing field. Economists have discovered that money does not make people happy. But even if they are happy now, it may not last. Subjective wellbeing is no more sensible than growth as a goal for economic policy.
Allianz pays too much for Pimco stars 10 Jan 2005 Buying a leading US bond fund manager in 2000 ought to have created lots of value for the German insurer. But it hasn t. That s partly because Allianz overpaid in the first place. But it s also because it paid too much to retain the top talent.
LSE bidders bailed out by markets 9 Jan 2005 Although investors think Deutsche Boerse or Euronext will overpay for the LSE their shares don t seem to have suffered. Actually, they probably have. The effect has just been masked by the general rise in share prices.
UK retail dogs have had their day 9 Jan 2005 Investors are betting that slowing consumer spending will pave the way for private equity groups to buy up underperforming UK retail stocks. But this is a highrisk investment strategy. The best bet is to stick to the established stars like Tesco.
Standard Chartered to raise £1bn for Korean deal 9 Jan 2005 The bank is raising the money partly to bolster its capital ratios and partly to give it a bigger war chest in future. But whether investors back future adventures depend on it making a success of Korea First. And that s a tall order.
China switches from US debt to US companies 7 Jan 2005 To date, China has largely recycled its trade surplus into US bonds. Increasingly, it is spending it on hard US assets. Buying oil firm Unocal may be controversial. But the US needs to attract $600bn a year to fund its trade gap, and beggars can t be choosers.
Cap Gemini junked by S&P 7 Jan 2005 The French IT services group needs to stop customers defecting on worries about its financial strength. CapGem may need to raise equity sooner or later. But the longer it can leave this, the better.
Moscow talks unlikely to end Gold Fields standoff 7 Jan 2005 The conversations cannot be easy. Gold Fields, Harmony and Norilsk all have good reasons to distrust each other. But they are all also under strong pressure to find a peaceful solution. That requires someone to abandon an entrenched position. The Harmony bid for Gold Fields is out of the money. And Norilsk must not be too happy with its ally. So it wants to talk. Gold Fields is willing to listen, because it does not like having 32% of its shares in hostile hands. But there is no obvious alternative.
M&S slashes profit forecast 7 Jan 2005 This is bad news. But it probably doesn't mean the turnaround under Rose, the newish boss, is off the rails. Much of the problem is down to old stock. For now, Rose should be given the benefit of the doubt. But he can't blame the past forever.
Be wary of new year bank rally 7 Jan 2005 The likes of ABN Amro, Commerzbank and Fortis have been rallying in part on rather vague takeover rumours. They are also cheap. But the message of previous years is that buying vulnerable European banks in the hope of takeovers isn't always a good trade.
Paris Club debt repayments signal global shift 6 Jan 2005 The Poles and the Russians are repurchasing debt owed to Western governments. Both want to save money and to lose the shame of past default. But these moves also mark the further decline of intergovernmental lending in favour of private finance. The global economy benefits.
Nordic media giants face off in hostile bid battle 6 Jan 2005 The bid for Finland's Alma Media by Norway s biggest media group is a gamble, since Sweden s largest media firm already controls it. But if the ploy works, Norway s Schibsted could sew up the region. It also has little to lose.
Deutsche Boerse targets soft issues in LSE bid 6 Jan 2005 Relocating its derivatives unit to London is the latest element in Werner Seifert's charm offensive. It's not one of the key issues. But it puts the LSE under more pressure to talk turkey and moves the debate on to an area where the Germans feel more comfortable: price.
Krispy Kreme’s share price is bloated 6 Jan 2005 The US donut maker s business is imploding and the group may be facing liquidity problems. But the markets are pricing in a recovery of fat margins. Problem is, these margins were a myth.
Junk bonds illustrate Fed’s liquidity worries 6 Jan 2005 The US central bank has warned of excessive risktaking in some markets. That certainly seems true of junk bonds. Yieldhungry investors have piled into the market seemingly undeterred by the prospect of higher defaults.
Murky dealings at Galeries Lafayette 5 Jan 2005 Minority shareholders are right to demand an explanation for the recent manoeuvrings at the iconic French department store. Something is clearly afoot. But it is not clear what. And the controlling shareholders aren t telling.
LBO bubble inflates Amadeus bid battle 5 Jan 2005 The private equity boom has pushed up sellers price expectations for the global travel reservations firm to almost E5bn. Does this mean a private equity house is about to get burnt? Possibly, although at least one of the bidders has a plausible strategy.
IFRS puts kibosh on convertibles 5 Jan 2005 Publicis is refinancing a E690m convertible bond that would have looked much more costly under new IFRS accounting standards. Other companies may follow so long as the options embedded in their convertibles are not in the money.
Tsunami victim nations resist debt write-offs 5 Jan 2005 For Thailand and Indonesia, pride and credit ratings are more important than debt relief. Only poorer Sri Lanka is tempted. Aid and expertise from the advanced economies reduce the suffering. But South Asia is rapidly becoming selfsufficient, even in disasters.
China throws $30bn at biggest bank 4 Jan 2005 This may seem like a huge capital injection. But it probably fills only 10% of the country s financial black hole. The state is torn between doing too little, risking a financial panic, and giving out too much, allowing bad lending practices to continue.
Jaguar asks Ford for more cash 4 Jan 2005 The US carmaker isn t the only one to struggle with a legacy brand. Rolls Royce and Bentley have also been a burden for their buyers. Buying the mystique of a brand isn t enough. Success requires heavy investment and redesign. So far, only BMW s Mini has been a success.