Italy leads eurozone in pension finance 23 Mar 2005 Who would have thought it? But later retirements and lower pensions have pushed the country from the very bottom to the top of the league. France and Germany will have to follow Italy s path if they wish to avoid much higher tax burdens.
Ken Morrison loses a shield 23 Mar 2005 The FD of the eponymous UK supermarket is gone, after two profit warnings. The audacious acquisition of Safeway has not gone smoothly. Further bad surprises would make investors wonder whether septuagenarian Ken Morrison is past his sellby date.
Acquirers hold onto their cash in takeovers 22 Mar 2005 The end result on capital structures is the same. But why not just offer cash? Because this may be a way to pay lower premiums. Instead of using money to fund deals, some buyers, like Diller's IAC and P&G, are issuing new stock and then kicking off massive buybacks.
Casino chief executive quits abruptly 22 Mar 2005 The main shareholder and chairman is becoming CEO, following the French retailer's lacklustre performance. Naouri s plans are unclear. It could be harder execution, a tweak to strategy or even buying out the minority. But so far he is keeping his cards close to his chest.
Fallen angels outperform original junk bonds 22 Mar 2005 Bonds downgraded from investment grade are nearly twice as likely to default within three years as original high yield issues. But they also have a far greater capacity to bounce back. And this is what drives investment returns.
Metro growth strategy pays off 22 Mar 2005 The German retailer s focus on Eastern Europe and consumer electronics has allowed it to flourish while other German retailers struggle. The share price has followed. But Metro will need to deal with its underperforming units to give the shares an extra boost.
Rossignol bid the exception to the French exception 22 Mar 2005 But exceptions to the French exception are always easier to make when the President of the acquiring firm is French too. The controlling shareholder of the totemic French skimaker has agreed to a takeover offer from US surf and snowboard firm Quiksilver.
Should US investment banks own retail brokerages? 21 Mar 2005 Morgan Stanley shareholders have gnawed on this question lately. But it s one that could be lobbed at Merrill Lynch, Citigroup and UBS. Morgan Stanley may only want to nix brokerage because of its poor performance. But there are good reasons to question owning a brokerage.
Stability pact deal shows eurozone’s weak base 21 Mar 2005 The agreement is little more than a surrender to German and French demands. It will make almost no contribution to fiscal responsibility. The euro s stability now depends largely on a hawkish ECB. But that institution s political support has not yet been tested.
Fazio may lose in fight with foreigners 21 Mar 2005 The conventional wisdom was that banks wouldn t force their way into foreign markets, because to do so would open a can of worms. But the Bank of Italy chief has himself to blame if ABN and BBVA have torn up the rule book. It's Fazio who may have opened a can of worms. The conventional wisdom was that foreign banks wouldn t force their way into Italy, because to do so would open a can of worms.
Schering loses high-risk cancer bet 21 Mar 2005 The German drug maker tried to prove its drug worked in tougher conditions than rival drugs. It didn t. This setback may have caused E1.5bn in market capitalisation to be wiped out, but the group s risky approach should be applauded.
Spain’s Union Fenosa soars on bid rumours. 21 Mar 2005 Draw up a checklist for what might make a company a hot M&A candidate in Spain, and the midsized utility has it all. Fenosa may not be sold today and its biggest investor has said as much. But with its credentials, Fenosa will sell at some point.
Permira’s bid to woo private investors 21 Mar 2005 The private equity group has struck a deal with investment trust SVG. It is structured to ease private investors' way into the asset class. This marks a new phase in the fightback by private equity against further encroachment on its territory by hedge funds.
Vodafone break-up mutterings are premature 20 Mar 2005 Yes, the costs of the mobile group maintaining a global empire are currently outweighing the benefits. But Vodafone deserves more time to prove its strategy. Synergies are starting to poke though. And this is no time to sell the US or Japan.
Apax gets foot in door with higher Woolworths bid 20 Mar 2005 The retailer has been shrewd. By rebuffing Apax s first bid, it has traded a squint at the books for a raise of between 6% and 16%. But this is not yet a done deal. Given the bleak news coming from the high street and the postGM credit wobbles, Apax could yet walk away.
Traders should keep stock if going to hedge funds 18 Mar 2005 But banks should tread carefully. Hedge funds aren t outandout rivals, and destroying goodwill may deter them from being future clients. This may be understandable because banks have been losing lots of good traders. But banks will probably tread carefully.
Fed tells Citigroup to stop buying 18 Mar 2005 The regulator is worried that a big acquisition would distract the giant bank s management from improving the corporate culture. Investors should be grateful for the mandatory pause. The company is probably not ready for the next big adventure.
Spanish M&A delirium infects cable firms 18 Mar 2005 The bidding game has turned hallucinatory. Almost everyone is trying to buy almost everyone else. The result has been an impasse. But ONO s E2.5bn offer for Auna s cable assets may break the logjam. Its bid is the simplest permutation so far.
These may be attractive at a time of low yields. But they may hurt investors that buy them in future years. 18 Mar 2005 These offer a big and certain upfront coupon but very uncertain returns thereafter. And the upside is capped but the downside isn't.
RAB Capital hails bumper start to 2005 18 Mar 2005 The Londonlisted hedge fund manager has grown assets under management strongly during January and February. But RAB investors have had a bumpy ride over the last year. They ll value steady and reliable growth as much as huge lurches forward.
Bonds race from conundrum to contagion 18 Mar 2005 Last month the Fed was worried that yields were too low. Now credit spreads have ballooned in response to GM s profit warning. This shows how hard it is to manage an overleveraged financial system and to predict whether credit will crunch or recover again.
Corus reports leap in profits 17 Mar 2005 The AngloDutch steel group may resume paying a dividend this year after benefiting from soaring steel prices and sweeping cost reductions. But with iron ore prices escalating and steel demand expected to slow later this year, Corus days in the sun may prove shortlived.
Goldman, Morgan Stanley rock Q1 17 Mar 2005 Goldman did even better than Morgan Stanley in beating forecasts. But curiously, Goldman now trades at a discount to its chief rival. This reflects concern about the sustainability of Goldman's results and, more likely, anticipation Morgan Stanley is vulnerable to a deal.
JPMorgan chooses to run rather than fight 17 Mar 2005 The bank has paid $2bn to settle its WorldCom liability. That is 50% more than it would have had to pay last year. But the judge suggested that its maximum liability was $10bn. And in a postEbbers world, counting on a sympathetic jury would be reckless.
German unemployment turns the corner 17 Mar 2005 The German government will today unveil a package of measure to tackle the country's persistent high unemployment. But the worst of the crisis could already be past. Unit labour costs have fallen to a level where German companies are competitive again.
Big media embraces new fashion – splitting up 17 Mar 2005 First Liberty, and now Viacom, plan to split themselves in two. AOL Time Warner is another candidate ripe for similar treatment. But the breakup of these conglomerates doesn t herald a new world where small is beautiful. They are simply preludes to further deals.
Bronfman set to double his money with Warner Music IPO 17 Mar 2005 It takes pluck, skill and a fair amount of luck for anyone in today s music industry to more than double their money in just one year. But that is what Edgar Bronfman Jnr and his private equity partners hope to do when they float Warner Music later this year.
Wm Morrison hit by more Safeway hiccups 17 Mar 2005 Integrating an acquisition is never easy. But having two profit warnings on similar accounting issues suggests Morrison hasn't got a grip. Investors used to find Morrisons' backoftheenvelope style charming. That may not last if Safeway keeps throwing up glitches. Investors used to find Morrison's backoftheenvelope style charming. But the Safeway deal may have overstretched its top brass.
ABN bid for Antonveneta would be hard to justify 17 Mar 2005 It s hard to see how the Dutch bank could extract enough synergies from the Italian tiddler to cover the necessary bid premium. Hopefully ABN is floating the idea of an offer only to smoke out a rival bidder, enabling it to liquidate its current 13% stake in the bank.
Casino manages to hold its own 16 Mar 2005 The French retailer s margins are holding up remarkably well in the face of rampant price deflation. But as competitors like Carrefour continue to cut prices it is going to become harder for Casino to keep its margins steady.