ABN does a Deutsche 7 Feb 2005 To focus investors minds, the Dutch bank is setting itself a return on equity goal mimicking its German rival s share price booster plan. But it s also reiterated its idea to tackle sluggish revenues by making acquisitions. That will be a counteracting pressure on the stock.
Finmeccanica shows the benefits of focus 7 Feb 2005 The Italian group, long a hotchpotch of disparate assets, is well on the way to becoming a focused aerospace and defence group. Finmeccanica still suffers a 1015% conglomerate discount, which could go. But the last bit of fat is always the hardest to shed.
Puma doesn’t get enough credit 7 Feb 2005 The German sportswear maker s shares have long lagged rivals on fears that it is a faddish flash in the pan. That at least has been the worry. The thing is that it doesn't really stack up.
EMI slashes forecast for music sales 7 Feb 2005 It partly blames delayed album releases. But this will jolt investors who thought the recorded music business was stabilising. The music group has gone from predicting flatto4% down recorded music sales to a thumping 9% fall just weeks before the year end.
Goldman merges M&A and financing arms 7 Feb 2005 This is going back to the old ways. Financing and banking were separated out during the boom but that's too costly in today's world. It's not just about rationalisation. It's about using M&A to drive the financing business. Goldman 's rivals will be watching closely.
Time for Manchester United to take its PIK 7 Feb 2005 The football club rejected Malcolm Glazer's first takeover offer because it involved too much debt. Glazer has now come back with an alternative. Instead of debt, he's suggesting a rare kind of security payinkind preferred stock.
Bid fever will sustain buoyant UK mid-caps 6 Feb 2005 After an impressive run albeit from a low base the FTSE 250 no longer looks particularly cheap relative to the FTSE 100. But the prospect of private equity bids for midcap stocks such as Woolworths, British Vita and Exel will continue to underpin valuations.
UK fund management club breaks up 6 Feb 2005 The industry has opened up to the outside world in the way the investment banking industry did a decade ago. That s a challenge for companies and for financial intermediaries too.
Is the closed-life arbitrage closing? 4 Feb 2005 The UK life industry has been dumping closed books at huge discounts to net asset value. But the possible bidding war for HHG s £1bnplus fund suggests buyers may already be arbitraging away the easy pickings.
Fears of a VW rights issue miss the point 4 Feb 2005 It s not that Volkswagen has its back to the wall. The German carmaker's liquidity profile is still strong. But if VW continues to burn cash, its equity will be increasingly squeezed. VW needs to grasp the nettle and launch a proper restructuring.
Pernod considers a bid for Allied – reports 4 Feb 2005 It s no surprise that the French drinks giant might bid for Allied Domecq. A tieup would deliver huge synergies and the timing looks right. But a fullblown takeover is far from certain. Both groups have no shortage of other options.
Qwest in talks to buy MCI for $6bn – report 3 Feb 2005 A deal would carry strong echoes of SBC's bid for AT&T. Qwest would effectively be buying customers rather than fighting for their business. Moreover, after Sprint s bid for Nextel, this deal would leave Verizon exposed. It may yet retaliate by breaking up one bid or the other.
Henkel bucks the trend 3 Feb 2005 The German consumer group has delivered sales and profits growth ahead of expectations, while many of its rivals are struggling. But Henkel will have to address its complex share structure if it is to participate in the expected industry consolidation.
BT offers to ring-fence its local loop 3 Feb 2005 The UK telecoms group is inching towards a settlement with its regulator. But this concession and an accompanying price cut are only a start.
Adelphia bids come up short 3 Feb 2005 Bids for the bankrupt US cable company have fallen short of the $17.5bn that one of its leading creditors said was an absolute minimum. Now that creditor, Bill Huff, is reportedly considering his own bid. This looks like a bluff from Huff to get the auction moving.
Shell earnings hit the roof; reserves hit the floor 3 Feb 2005 The oil giant tripled profits in the fourth quarter. Dividends are up, and share buybacks are to start again. But there is a sting in the tail. Shell s reserves replacement rate has fallen again.
Alcatel pays for past underinvestment 3 Feb 2005 The French telecom equipment maker s dash for cash over the past few years has placed a straightjacket on the group. Deferred expenditures are now lowering the gross margin. And expected sales growth has disappointed.
Boss’s son replaces Weinberg at PPR 3 Feb 2005 It's never a good sign when a highlyregarded CEO is replaced by the family heir especially when the succession process isn't transparent. Rather like Murdoch Jr at BSkyB, Pinault Jr could find it hard to prove he's the right man for the job.
Deutsche Bank job cuts to total 6,400 3 Feb 2005 While the move will reduce the costbase by 7%, Deutsche s key 25% ROE target for this year still looks like a challenge. Revenues grew only 3% in 2004, and any aggressive restructuring always comes with risks.
Murdoch Jr pulls out the stops at BSkyB 2 Feb 2005 The British payTV company is growing faster than most expected. The growth is profitable too. The stock has now recovered to £6 where it was when James Murdoch shocked investors with his growth plan. It will struggle to exceed that.
Standard Chartered bid talk doesn’t stack up 2 Feb 2005 The natural bidders for the emerging markets bank Citi and JP Morgan have other strategic issues to grapple with. And the bank s skyhigh valuation means that bidders with fewer synergies, like RBS, could not justify paying a premium.
Morgan Stanley should follow Amex 2 Feb 2005 Amex added $4bn to its market cap by promising to break itself up showing investor dissatisfaction with the financial conglomerate model. Morgan Stanley should do the reverse and find a better home for its Discover credit card business.
Google’s growth is slowing 2 Feb 2005 While growth at the internet search company still astounds, the rate of sales increase is consistently slowing. But Google s $57bn market capitalisation doesn't price in much of a slowdown.
Deutsche Boerse re-rating has gone far enough 2 Feb 2005 The German exchange is now trading closer to average industry multiples. This rerating was overdue. But investors also seem to be betting that its bid for the LSE will fail and it will buy back shares instead. This may be too optimistic.
Xstrata yields to invisible pressure 2 Feb 2005 The UKlisted miner has raised its offer for WMC by 13% to A$8.4bn. The market had rejected the first bid, despite lacking any alternative. WMC shareholders are still hoping for more. But the shadowboxing is probably over. From this level, a counterbid is unlikely.
Fiat and GM fail to find deal on put option 2 Feb 2005 Both sides are now free to strike. Fiat can try to exercise its put, and GM can try to get it declared invalid. But even if Fiat wins the first battle, it will be a long way from winning the war. Meanwhile, its business will continue to suffer.
BBA is a prime target for a break-up 2 Feb 2005 Keeping private jets high and babies dry have nothing in common. Value could probably be created by selling the nonwoven fabrics business. Speculation has already narrowed BBA s discount to the sum of its parts. But if a deal materialised, there s still some upside.
Will foreign banks finally invade Italy? 1 Feb 2005 Investors are betting ABN and BBVA are sufficiently desperate that they might bid for Antonveneta and BNL. But flying in the face of the Bank of Italy looks easier said than done. And without a bid, shares in both banks could fall.
Citi bond trade brings back eerie memories 1 Feb 2005 A memo from just before last year's controversial trade spoke about turning the European market into something more like the US bond market. This has echoes of the 1991 cornering of the US Treasury note market. The guilty party then was Salomon Brothers now part of Citi.
Telecom Italia shares look well up with events 1 Feb 2005 Investors are giving TI plenty of credit for the benefits of releveraging, without applying much of a discount for the risks. TI chairman Tronchetti Provera must keep hitting his debt and earnings goals if he is to keep the stock levitated.