EDF may face two more Italian taxes 22 Feb 2005 The French giant wants to avoid buying all of Edison, its Italian venture. That may mean selling a stake to Italian groups on the cheap. EDF also wants Italy to lift a 2% voting cap on its Edison stake. To secure that, it may have to give Italian rival Enel access to France.
Boerse rebels right to push for board removal 21 Feb 2005 This is the nuclear option for investors opposed to the German exchange s bid for the LSE. But it s not being used lightly. Investors have a right to influence the board, and have exhausted other means. Moreover, a vote may stimulate German governance reform.
Bankers resent regulatory arbitrage 21 Feb 2005 They say they are overregulated full stop. But what really gets them is the relative deterioration in their position. They have lost out to lightlyregulated private equity and hedge funds. Regulators should think about how best to close the gap.
Qwest to insert collar in MCI bid – report 21 Feb 2005 When a bidder offers a seller more stock if its own share price falls, it's generally a sign of overstretch. Think of Vivendi/Seagram. But that may not be the case if Qwest offers MCI a collar. It's a rational response to the target's decision to back a lower bid.
Novartis places $8.4bn bet on generics 21 Feb 2005 Many investors hoped the Swiss drug maker would dump its copycat drugs division after margins dropped to a lowly 8%. But Novartis is now trying to turn the division around with a pricey acquisition.
CVC could see huge return from Kwik-Fit sale 21 Feb 2005 The private equity firm could triple the investment it made three years ago if the British car parts retailer sells for £1bn. But this would not be just another quickly flipped, private equity deal. CVC injected more than financial wizardry into KwikFit.
DKW plots high-return fund-of-funds derivative 21 Feb 2005 The idea is to produce a hedge fund product that enjoys the benefits of diversification but without sacrificing performance. The product utilises DKW s bird seye view of the hedge fund world, plus some clever maths. It seems too good to be true.
Investors force KKR to pay more 18 Feb 2005 Faced with defeat in its bid for Canadian doormaker Masonite, the buyout firm has reluctantly upped the price by 5% to C$2.8bn. This may be enough. But the wrangling demonstrates how suspicious investors are about being bought out cheaply in publictoprivate deals.
Russian markets show double standard 18 Feb 2005 The country s debt is investment grade. Paris Club creditors even believe it is worth a premium. Yet Russian stocks are at a discount. Why? Equity investors face growing Russian micro risks. Bond investors don t. Even the chronically mismanaged Soviet Union never defaulted.
France Telecom may join private equity bid for Cesky 18 Feb 2005 This might be a ruse for the debtladen French operator to defer an acquisition via a downpayment. But it would be hard for trade and financial buyers to agree on the terms of an exit.
Marchionne takes the helm at Fiat Auto 18 Feb 2005 It's not clear whether the Italian carmaker s last boss, Demel, deserved to be pushed out. It's hard to see Marchionne doing much better. He's not a car man and he'll be overloaded trying to run the group and its problem subsidiary.
Telefonica isn’t being mean to Terra 17 Feb 2005 The internet company's minorities think they are being ripped off by the Spanish telecom group's bid. But they aren't. Telefonica's bid is actually quite generous.
Bank of England changes its inflation story 17 Feb 2005 Last year, it was talking up the risks. But now, it appears relaxed, despite the CPI rising from 1.1% to 1.6% in three months. The difference is that the housing market was booming then, whereas now the bank is more worried about a crash.
Arcelor deserves a re-rating 17 Feb 2005 The world s second steel producer has delivered a ninefold increase in earnings on the back of rising steel prices and a major restructuring Its expansion into emerging markets should sustain growth even if steel prices start to fall.
Credit Suisse pleases with SFr6bn buyback 17 Feb 2005 The Swiss bank can comfortably afford this. It already has surplus capital. And the buyback has a lengthy twoyear timetable. But the harder and more important job is to improve operational performance in investment bank CSFB, whose Q4 results were mixed.
Reuters moves from tipping to turning point 16 Feb 2005 The good news is that revenue decline has slowed to a crawl. The information company may even grow sales this year, at last. The bad news is that the stock s growth rating already reflects such hopes, and more. Investors may be disappointed.
Sacyr throws in towel in fight with BBVA 16 Feb 2005 Giving up its attack on Spain s second biggest bank after it didn t get political support is good news for Spanish corporate governance. Not that Sacyr has come away emptyhanded. The construction group has pocketed a E150m capital gain from its raid.
Citigroup five-point plan comes at a price 16 Feb 2005 The giant bank's answer to recent scandals is to impose a new culture that puts Citi's reputation above that of its individual units. But the plan could prove costly, both in terms of management time and potential lost revenues.
Fiat to split Maserati from Ferrari 16 Feb 2005 The industrial logic looks pretty thin at best. But there may be some financial logic. Getting shot of lossmaking Maserati would make Ferrari easier to float. Is this the invisible hand of Mediobanca, Ferrari's partowner?
Electrolux spins off outdoor products business 16 Feb 2005 This is a change of tune. The home appliance maker previously claimed there was industrial logic in keeping its activities under one roof. But a spinoff makes sense. It will unlock value and free up management to focus on reviving the ailing white goods business.
Ukraine’s anti-oligarch plan sounds very Russian 16 Feb 2005 Yushchenko wants to take back companies from cronies of the former government. That is much like Putin and Yukos. Investors like the Ukrainian move, because Yushchenko is viewed as a prowestern hero. But capitalism does not work by changing the laws.
Highfields offers $3.3bn for Circuit City 15 Feb 2005 Hedge funds, private equity what s the difference? The bid for the consumer electronics retailer shows how blurred the lines are becoming. But it should raise questions for investors. Are hedge funds simply taking advantage of the lower expected returns on their money?
Investors get carried away in emerging markets 15 Feb 2005 Low western interest rates are driving a bull market in localcurrency emerging market bonds. This has attracted investors that don t normally invest in exotic debt. Only a small shock would see them jump off the bandwagon.
Is the world running out of oil? 15 Feb 2005 A glance at oil firms latest results suggests so. None of the majors fully replaced the oil that they pumped last year with fresh reserves. Yet the problem is not the level of reserves, but how they are counted. The industry lacks an acceptable common standard.
Is Ma Bell being put back together? 14 Feb 2005 With one Baby Bell buying AT&T and another Baby Bell buying MCI, over 20 years of US telecoms history is being rewound. Bringing longdistance and local carriers back together has logic: gaining scale to defend themselves against new internet upstarts.
Wasserstein should do more than cut pay 14 Feb 2005 Lazard s boss has cut pay to prettify its figures ahead of its IPO. But there s another problem: low productivity. Unless Lazard wrings more from bankers, it will struggle to compete with the best. But that s not easy.
Saudis act to preserve oil kingpin status 14 Feb 2005 The mulled plan to hike production by 50% is designed to push up market share and crowd out expensive nonArabian exploration. Rich countries might like the lower prices. But will they want to keep so many eggs in the fragile Saudi basket?
MCI snubs Qwest for Verizon 14 Feb 2005 At first blush, this may seem sensible given Verizon s greater financial resources and the stability of its stock price relative to Qwest. But MCI shareholders would make out better from a Qwest deal. Investors ought to question why the board has chosen this route.
Barclays settles CDO spat with Germany’s HSH 14 Feb 2005 HSH was seeking damages relating to a bundle of these esoteric credit instruments purchased from Barclays in 2000. Settling was sensible. HSH bought the CDOs when the market was immature and everyone was making rosy assumptions about its future.
Volkswagen doesn’t deserve a premium 14 Feb 2005 Its shares have risen on hopes 2005 will see a radical change in the German carmaker s fortunes. But VW isn t a restructuring story. And its efforts to boost sales are making its cost structure even more complicated.