Scottish Power sells its US business for $5.1bn 24 May 2005 The UK utility has done the right thing and extricated itself from its illthoughtout foray into the US. It plans to return $4.5bn to shareholders when the deal closes. Better yet, the sale tarts up the group for a possible merger.
LBO bid for National Hockey League may not be nuts 24 May 2005 Spending $4bn to buy the lossmaking NHL may look like another example of a buyout fund with too much money and not enough opportunities. But there may be hard logic to Bain s deal. It eliminates competition for talent something Wall Street would envy.
Clarke orders extradition of NatWest Three 24 May 2005 The UK Home Secretary has approved the extradition of three British investment bankers accused of Enronrelated offences. Under the UK Extradition Act, the US didn't have to present evidence to support its case. The implications for UK business are profound.
Shared equity schemes are unwelcome 23 May 2005 The UK government s plan to help firsttime buyers onto the housing ladder could be selfdefeating. The scheme risks adding hot air to the house price bubble and saddling taxpayers with negative equity. Better to let the market do its work.
Europe shows rejectionist streak 23 May 2005 Germany's biggest state has turned out its government. And it looks like France and the Netherlands will reject the EU constitution. Voters are hostile to regional unity, reform and globalisation, wanting to protect what they have. This climate is unfriendly to investors.
UK growth statistics are too flattering 23 May 2005 When it comes to cars, computers and other stuff, the Germans are doing as well as the British. The UK excels in services. But half of the service growth has come from the state. And the value of many of the new jobs is questionable.
Hester stamps his authority on British Land 23 May 2005 The British Land boss is buying Pillar Property not just for its retail parks and fund management business but also its management team. He hopes they will spearhead a cultural change at British Land, but he will have to sweat to make the £811m deal work.
German authorities pursue Deutsche Boerse dissidents 23 May 2005 They want to punish someone for the ouster of the stock exchange's bosses. Proving rebel investors acted in concert would do nicely. Thanks to lax German laws, and some silly comments from one of the hedge funds, they might have a case.
Carry trade unwinding pushes growth stocks 23 May 2005 Lust for yield has pushed up defensive stocks to multidecade highs relative to growth stocks. The unwinding of carry trades in the past two weeks may be reversing this trend. Tech stocks are flying.
Emerging market bonds escape high yield woes 23 May 2005 Strong fundamentals have helped save the asset class usually the first to get hammered in times of financial stress. Emerging markets also have very low exposure to complex derivative products the CDOs that have caused such havoc of late.
At least some investors hopeful about US airlines 23 May 2005 First, United dumped its pension liabilities. Now America West and US Air plan to merge, with private equity coinvesting in the deal. That s a rare dose of optimism in the industry. But the investment may have been made because there is little downside.
Sir Ken Morrison needs a change of heart 23 May 2005 Wm Morrison's chairman may say he wants to bring nonexecs on to his board. But it's not clear he really means it. Investors don't want to lose the benefit of Sir Ken's vast experience. But if he stands in the way of reform, they may change their mind.
Spirit holds key to pubs consolidation 22 May 2005 The UK pubs group will this week try to persuade investors it is still a viable IPO candidate, despite disappointing first half results. But Spirit's private equity owners would make more money breaking up the business.
Reclassification undermines rationale for PFI 20 May 2005 The UK private finance initiative was a clever ruse to keep large increases in public spending off the government balance sheet. The Office for National Statistics has belatedly woken up to the trick. This means Brown is even more likely to miss his fiscal targets.
Market cools to healthcare IPOs 20 May 2005 This was supposed to be the year European companies would raise boatloads of money. It isn t. Prostrakan is the latest and largest group to try its luck. It may be a better bet than most, but the window is closing.
Bailey Coates cuts back as assets fall below $1bn 20 May 2005 The received wisdom of the boom years was that a hedge fund needed at least $1bn to be viable. On that basis, this one has no future. Managing a declining asset base is tricky. Maybe the real lesson is not to raise more money than you can earn a superior return on.
CDO prices swing wildly 20 May 2005 The risky tranches of CDOs may look cheap after recent losses. But distressed investors don t have the confidence in valuations to wade in. This is a recipe for price volatility. And that means hedge funds losses on complex derivatives are yoyoing up and down.
Goldman didn’t serve Deutsche Boerse well 19 May 2005 Being a good adviser means being prepared to deliver unpleasant messages. The Boerse was hellbent on buying the LSE without giving investors a say. Goldman should have advised a vote, and walked if it was ignored.
European IT service problems are structural 19 May 2005 Rising sales at the top three firms LogicaCMG, Atos Origin and Capgemini point to a welcome cyclical upturn for the beleaguered sector. But the industry still faces longterm structural challenges from new technology and third world programmers.
Hedge funds slip up on oil 19 May 2005 Credit markets are not the only place where financial investors have been squeezed. They ve also been caught out by an unusual contango in oil markets.
LSE hikes final dividend 46% 19 May 2005 The UK stock exchange seems to want to emphasise its organic growth prospects since Germany's Deutsche Boerse withdrew from takeover talks. But fullyear results bear the scars of higher capex and pressure on fees. That won t do much to boost perceptions of its standalone value.
Private equity-backed IPOs take a beating 19 May 2005 But the headlines are deceiving. Though many deals like Boise Cascade are pricing below expectations, their valuations are still high. Indeed, it almost looks like private equity firms are deliberately overpricing at the outset so that institutions can save face.
German anti-market talk is mainly hot air 19 May 2005 Even Schroeder has joined the chorus in a bid to win back voters in a key state election and keep control of his own party. But he doesn t really want to bring back the old system of managed capitalism. At worst, Germany risks succumbing to protectionist rhetoric.
BT loosens its belt 19 May 2005 The UK telecoms operator is raising the dividend and its debt target and it's even talking about making more acquisitions. The tone is certainly upbeat. But that shouldn't disguise the scale of the challenges ahead.
O2 faces hard year 18 May 2005 The mobile operator has delivered its first dividend, significant profits growth and cemented its positions in the UK and German market. But O2 is now having to make longdelayed investments in 3G at a time when rivals may already have an edge.
Wannabe Russian oligarchs scupper Gazprom merger 18 May 2005 Putin himself wanted to merge the gas giant with oil company Rosneft. But Rosneft s Kremlininsider bosses opposed the idea. Their success at thwarting Putin s plans may now have given birth to a new class of oligarchs, every bit as powerful as the old ones.
Investors too quick to pounce on good US news 18 May 2005 A few weeks ago slow growth looked like a sure thing. It took only a few scraps of data for sentiment to improve sharply. The mood swings reflect the US's dependency on unstable financing to fill its deficits. That doesn't bode well for the dollar.
Toro’s E2bn IPO won’t make De Agostini rich 18 May 2005 The publishing group would have almost done better had it just told its broker to buy a portfolio of insurance stocks. That's partly because it hasn't turned Toro round. And partly because Fiat extracted too fat a premium when it sold.
China should be bold in revaluation 18 May 2005 The expected 510% would only attract more hot money. If the government loses control of the renminbi, it could easily rise by over 30%. A 20% move would calm both speculators and US critics.
Compass quiet on strategic revamp 18 May 2005 The troubled caterer has thrown a sop to shareholders with a modest dividend rise, but hasn't spelt out its plans to turn itself around. If Bailey, the CEO, needs a little more time to produce a clear plan, so be it. But when it comes, it had better be good.