Drax mulls IPO, but it won’t be an easy sell 9 Jun 2005 Creditors that took over the UK power station when it failed in 2002 now want to sell out taking advantage of high power prices. The refinancing looks pretty sensible from almost every point of view except that of incoming shareholders.
Mediobanca up on bid hopes 9 Jun 2005 There s no easy value in a break up and there s a pact. But neither hurdle has stopped other entrepreneurs from raiding Italian companies. Nevertheless, when insiders such as Mediobanca chief executive Alberto Nagel are selling the stock, buyers should beware.
Northumbrian adds insult to buyout firm injury 8 Jun 2005 A bunch of institutions outbid private equity for the UK water company. They immediately turned around and floated it. In less than two years, they have more than doubled their investment.
Why is GM so timid on cost cuts? 8 Jun 2005 GM may be treading softly because it is gearing up for a tougher battle on healthcare costs which is financially much more crucial. 25,000 job cuts sounds like a lot. But it is in line with GM's shrink rate. The cost savings are smaller than many European carmakers'.
Subsidies the wrong way to cool energy prices 8 Jun 2005 The G8 is mulling plans to subsidise the construction of new refineries, and so ease energy bottlenecks that have kept oil prices high. Right problem, wrong solution. One snag is that this approach doesn t do anything about curbing gasoline demand especially in the US.
RBS steadied by global footprint in H1 8 Jun 2005 But the fly in the ointment is the UK, where credit card arrears have risen and income growth in retail banking has slowed. RBS is clearly an international business, but it would still feel the pain if its home market deteriorated badly.
Morrison provides unhelpful profit warning 8 Jun 2005 Not only is this the fifth warning by the UK supermarket group since it overgorged on Safeway. Morrison hasn't seen fit to give a proper explanation of why profits are going to be £100m£200m lower than the market was expecting.
EU airlines rush to sell shares 7 Jun 2005 Oil prices are skyhigh and consumer spending is under pressure. It seems an odd moment for airlines to tap the markets. Why are they doing so? The industry is finally dealing with the backlog of privatisations and IPOs that built up over the past four years.
Greenspan can’t explain low bond yields 7 Jun 2005 The Fed chief ruled out a coming recession, pension fund buying, demographics and foreign accumulation. That leaves only "new forces". But one of them is not so hard to find. The Fed s zero real rate policy has induced a quite rational exuberance among bond buyers.
Pernod strikes smart deal with Diageo 7 Jun 2005 The French drinks group is promising to sell Diageo a couple of Allied Domecq's nonstrategic brands at good prices if it takes over Allied. In return, Diageo will stop talking to the Constellation Brands consortium about making a rival bid. This should strengthen Pernod s hand.
France Telecom underwriters left with stock 7 Jun 2005 The banks seem to have overestimated hedge funds capacity to take on risk after recent turmoil in the markets. This could have knockon implications for how other large block trades are handled.
Unicredito mulls further concessions to HVB 7 Jun 2005 The Italian lender has offered its German counterpart the chairmanship. Now it may allow HVB virtual autonomy if it agrees to a deal. In addition, it could pay a premium. Perhaps Unicredito boss Alessandro Profumo feels that without a merger, his options are limited.
Siemens makes clean exit from mobiles 7 Jun 2005 The German conglomerate will take a much lower than expected E350m charge for Taiwan s BenQ to take the lossmaking unit off its hands. That s better than running it at a loss or closing it down. And it leaves BenQ the gruelling task of dealing with Siemens German workforce.
Is Blair really as Anglo-Saxon as France fears? 6 Jun 2005 The French think the UK government stands for rough and tough free markets. But look what Blair's friends at think tanks are churning out. One wants to break up Tesco for the sake of retail diversity. And another wants to triple maternity leave. It sounds ever so Continental.
BenQ may not get Siemens off the hook 6 Jun 2005 Most mobile handset alliances have failed in the past. And this tieup between the Taiwanese and German groups looks to be no mouldbreaker. Much depends on whether the deal will give Siemens investors a real exit from the lossmaking business.
RCS pact fights back 6 Jun 2005 The publisher s shareholder pact, besieged by raider Ricucci, wants weaklink investors to sell to fellow pact members in case of a bid. It isn t clear how legally effective the agreement will be. But even so, it is likely to make Ricucci s life harder.
Fazio shouldn’t let Lodi bet the bank 6 Jun 2005 The debtfunded deal the small regional bank has lined up to buy larger rival Antonveneta is not prudent and smacks of moral hazard. The central bank should force Lodi to shore up its capital ratios ahead of any bid.
France Telecom stock offered at tight discount 6 Jun 2005 The E4bn block trade is being marketed at less than 2% below Friday s close, suggesting banks have bid handsomely for the business. The deal lifts the pressure on the Treasury to sell a chunk of gas company GDF. But that could actually encourage it to do so.
Google’s valuation soars past $75bn 6 Jun 2005 This is absurd. The internet search group is now worth 50% more than the combined value of every major US newspaper group. True, Google is growing fast, but competitors face few barriers to entry. The New York Times will be around in 50 years time. Will Google?
Big flotations return to London 5 Jun 2005 It has been 18 months since the last £1bnplus company floated in the UK. Now PartyGaming, Inmarsat and possibly RHM will join the club. Institutional investors should be receptive. But that s mainly because they are keen to wrangle price discounts from sellers.
Sell-side analysts drift towards irrelevance 5 Jun 2005 Institutions have voted in record numbers in the Extel survey, but only because it helps them carve up a shrinking commission pool. The brokerage industry has failed to demonstrate the value of its research. What s needed is for analysts to produce a smarter product.
BHP Billiton gets WMC 3 Jun 2005 There was no last minute counterbid, so the Australian miner s shareholders rushed to accept the A$9.2bn ($6.9bn) offer. BHP paid a high price, but the mining giant can afford it. And if this metal upcycle proves strongerforlonger, the deal will look clever.
PartyGaming goes for the jackpot 3 Jun 2005 The online poker site is seeking a $10bn for its IPO, based on a similar rating to rival Sportingbet. But that may be too ambitious. Given the regulatory issues that dog the issue and the doubts about the durability of the poker craze, that will be a challenge.
Tate & Lyle’s sugar high may be short-lived 3 Jun 2005 The UK food ingredients producer's stock has soared 50% in the last year, driven by explosive growth from its miracle sweetener, Splenda. But reforms to the EU sugar subsidy regime are likely to call a halt to the share price for now.
Lehman takes conflict flak in L-3 deal 3 Jun 2005 The investment bank advised Titan on its sale to L3, which Lehman is also financing and on whose board two of its bankers sit. Like Goldman s role in the NYSEArchipelago deal, this has tongues wagging. But like that deal, it smells a lot worse than it tastes.
Braggiotti threatens to quit Lazard 3 Jun 2005 The investment bank s partners seem to be going back to what they do best feuding. Investors in the recent IPO must be wondering what they have bought into.
Dutch no rekindles euro doubts 2 Jun 2005 Two strong no votes on the EU constitution have hit the currency. But talk of breaking up the currency is excessive. The euro may end eventually, but the EU will fight hard to protect it.
Calyon makes an unconvincing recovery 2 Jun 2005 Credit Agricole's investment bank has struggled since the Credit Lyonnais takeover. Does its strong Q1 mean it has turned the corner? Not necessarily. Earnings are up 48% mainly because of oneoffs. The underlying business still looks weak.
Whose side is Goldman on? 2 Jun 2005 That's the question private equity firms will be asking after the investment bank trumped them in the auction for Pirelli's cable assets. The rationale for the $9bn fund was that Goldman would facilitate client business, not compete with clients. That notion has taken a knock.
Veolia to offer inflation-linked bond 2 Jun 2005 The French utility hopes to tap into rising demand for such debt. And it would provide a natural hedge for the regulated business. But the time to issue such bonds is when inflationary expectations are high. That is hardly the case right now.