Achenbach’s exit at Karstadt a mixed blessing 8 Apr 2005 The German retailer's boss was only ever a standin and not a very effective one at that. So noone will rue seeing the back of Achenbach. But Karstadt has turned to another standin: its finance chief. He isn't a retailer, and his appointment may presage more financial trouble.
Fraud may slow the growth of internet search 8 Apr 2005 About half of Google s growth comes from outsourcing advertising to other web sites. This model invites fraud. Search companies may have to cut back on an area that has provided supercharged growth.
M&S tax ruling not as federalist as it looks 8 Apr 2005 Allowing companies to offset losses anywhere in the EU against their taxes sounds like a case of vanishing borders. But the ruling, which still needs ECJ approval, is in practice much narrower. National tax rules will still predominate.
Nothing left of MG Rover 8 Apr 2005 The carmaker s equity was worth just £10 in 2000. But its assets are now worth far less than its liabilities. Much value has been destroyed. Rover might have been saved had it opted for the niche sportscar option proposed by Alchemy five years ago. Now there s little to resurrect.
Compass Group’s board deserves closer scrutiny 8 Apr 2005 Two profit warnings have highlighted the unorthodox corporate governance structure at the world's largest catering company. While Compass was on track, investors overlooked the unusually cosy setup. But if the rough patch continues, they should demand action.
EDF faces Italian dilemma 8 Apr 2005 The French group is at a crossroads. It can either sell all of its Edison unit to Endesa, or share control with an Italian utility. EDF may prefer a partnership, to avoid a retreat from Italy. That could give the Italians an edge, even if they offered a lower price.
Buying pushes Antonveneta above ABN’s bid 7 Apr 2005 It s unclear what s going on. But one theory is that it s customers and other locals who want to retain influence over Antonveneta. This clearly makes ABN s life more difficult. But it doesn t mean the Dutch are certain to be thwarted.
ISS bondholders may get a reprieve 7 Apr 2005 The Danish group s bond prices plunged after it received a leveraged buyout approach. But LBO lending banks may not want ISS s shorterdated bonds to remain outstanding. The company may have to tender for them.
Pfizer’s drug withdrawal hurts Merck 7 Apr 2005 The drugs company's forced withdrawal of Bextra worsens rival Merck s legal position over its closely related painkiller Vioxx. On the basis of the cost of settlements for other pulled drugs, Merck could be facing a final bill of at least $16bn.
Inditex has room to narrow the gap with H&M 7 Apr 2005 The Swedish retailer s business model does give it an edge, especially since it seems to have cracked the US. But that doesn t mean its shares are set to outperform. Inditex's discount of over 20% actually looks too wide.
Boots warns on profits again, puts BHI on the block 7 Apr 2005 The retailer has sugared the pill by promising to sell its subscale healthcare business and return most of the proceeds to shareholders. But this can't conceal the bitter taste underneath. Profits are still falling at the core chemists chain.
Ratings agencies risk regulatory quagmire 7 Apr 2005 The EU has decided not regulate them for now. But the issue will come back when bank balance sheets start to depend on rating agency calls. The agencies should move in the opposite direction cut their quasiregulatory ties and stress their role as independent outsiders.
Will Enel’s fourth tranche deliver gains? 6 Apr 2005 The sale of a fourth chunk of the Italian utility will raise lots of interest given the cracking returns investors made on the last tranche. But now that Enel s restructuring is largely complete, future returns are likely to be more modest.
GLG poaches Goldman prime broking chief 6 Apr 2005 But Europe s largest hedge fund isn t hiring Manny Roman to run money. His role will be entirely managerial. GLG seems to want to tidy itself up. Maybe it envisages a flotation rather than a successful conclusion to its sale talks with Lehman Bros.
Research independence has its own problems 6 Apr 2005 Chinese walls between bankers and analysts are holding firm. Goldman cut client Allied Domecq a day before it went public with bid talks. Philosophically this is a good thing, but it could hasten the death of research in the securities industry.
Pernod Ricard considers bid for Allied 5 Apr 2005 The French drinks group is teaming up with Fortune Brands for a possible bid for its British rival that could value Allied at over £9bn. But a deal will be hard to structure and even more difficult to make work financially.
Berlusconi suffers crushing setback 5 Apr 2005 In the regional elections, the opposition appears to have wrested six regions from the Berlusconi government and won more votes overall. This defeat will likely make Berlusconi s coalition even more fractious, and doesn t bode well for the elections in 2006.
Too early to call upturn in chip industry 5 Apr 2005 Global chip sales rose in February by 16% compared to last year. The industry association says sales forecasts may need to rise. But this would be one of the shortest downturns ever. History, and a slowing underlying rate of growth of the industry suggest against it.
Morgan Stanley puts Discover on the block 5 Apr 2005 What looks like a climbdown for CEO Purcell is really just a shrewd defence taken on the good advice of his own bankers. Jettisoning the card unit is a nobrainer and focuses investors on Morgan Stanley's potential value.
Barclays saddled with acquisition speculation 5 Apr 2005 First the UK bank is rumoured to be bidding for Standard Chartered. Then it s said to be eyeing up Unicredito. New chief John Varley is ambitious and not afraid of M&A. But it s hard to reconcile the market talk with his pronouncements on strategy.
UK Tories lack policies to match popularity 5 Apr 2005 They are doing better in the polls as the May 5 election approaches. But the gains mostly reflect hostility towards incumbent Blair. Conservative leader Michael Howard s heart might be with small government. But he thinks it would lose the election. So he is being vague.
MG Rover saga a lesson in cynicism 5 Apr 2005 The only real political imperative is that Rover shouldn't collapse just before the election. Pity the taxpayer. Cynical managers sucked millions out of the British carmaker without fixing it. Politicians may pour in millions without fixing it either.
How will private equity exit mobile? 4 Apr 2005 Buyout firms are keen to snap up second and thirdtier European operators, such as Wind, Amena and TIM Hellas. Normally they exit deals by selling either to the stock market or trade buyers. But these routes may not be easy with smaller mobile groups.
Fuel subsidies are a problem but not a solution 4 Apr 2005 The IEA wants to eliminate the distortions caused by belowmarket energy prices in developing countries. That makes sense. But the effect of subsidies is too small for cuts to make much difference to oil demand. Higher taxes are likely to be more effective.
RZB to cash in on eastern European euphoria 4 Apr 2005 The Austrian bank s planned IPO of its international unit gives it heady valuations compared with European banks. While an eastern European premium is justified, this one goes too far.
Orthopaedic stock sell-off overdone 4 Apr 2005 A regulatory probe by US authorities into orthopaedic implant makers set off investor panic. The sector s high valuations may make investors jumpy, but the investigation won t reduce the sector s redhot growth.
Glaxo’s manufacturing probe signals big problem 4 Apr 2005 US regulators could fine the UK drug maker up to $850m and stop the sales of two of its important drugs. That's a hefty blow. And what's worse, the drug maker's manufacturing problems may be symptomatic of deeper ills.
Small oil stocks are overvalued 3 Apr 2005 Soaring oil prices and one or two lucky finds has put a gusher under smallcap oil exploration and production companies. It s not just cash shells or tiddler companies that are soaring. Shares of relatively large firms have also hit the roof.
Little to choose between two Wind suitors 1 Apr 2005 Both the Blackstoneled consortium and the Weather Fund have come up with similar prices for the Italian mobile group. Much depends on how worried Wind s owner Enel is about deliverability and whether it believes the Blackstone group can turn Wind around.
Telefonica makes opportunistic bid for Cesky 1 Apr 2005 The deal stacks up financially. But there s no industrial logic, and it dents Telefonica s reputation for strategic discipline. If Telefonica carries on spending its money this way, investors may punish the shares.