O2 reaps benefits of clampdown on churn 27 Sep 2005 The mobile operator seems to have got to grips with a problem of customer defections. It's also fending off rivals in Germany. That means O2 has raised its fullyear guidance. And it's now a more attractive takeover target.
Katrina’s $62bn clean-up bill needs testing 27 Sep 2005 The potential for misappropriation of the funds equivalent to the GDP of Peru is huge if left unchecked. Legislators meet today to begin oversight hearings. It s late, but not too late, to account for where the billions are flowing.
New FDA head great news for biotechs 26 Sep 2005 Andrew von Eschenbach wants to speed up drug trials and ease approval for cancer drugs. This will disproportionately benefit the biotech industry it is heavily cancercentric.
Global imbalances beyond institutional control 26 Sep 2005 The G7 and IMF can watch and worry, but they have no remedies for high oil prices, low real interest rates or the high US trade deficit. The only available cures a sharp rise in US interest rates and a much lower dollar look almost as dangerous as the disease.
SEC investigates bullying of analysts 26 Sep 2005 Analysts being bullied seems like a problem, but it s probably not. Any analyst who will shrink from rudeness from the chief financial officer probably isn t much of an analyst anyway.
Aircraft industry booming despite airline woes 26 Sep 2005 While two more US airlines file for bankruptcy, aircraft makers Boeing and Airbus enjoy nearrecord order books. Why the disconnect? Rising aircraft prices and lease rates are luring financial investors into aircraft finance. But that can't last forever.
ABN turns tables on Italian enemies 26 Sep 2005 In buying Antonveneta, the Dutch bank inherits 7% of a holding company owned by an ally of its discredited rival, BPI. But ABN can't use the stake to make much mischief. Indeed, finding a buyer for the unlisted holding will be a headache.
Telewest ruse draws merger with NTL nearer 26 Sep 2005 The company s threat to sell Flextech seems to be working. NTL looks ready to seal a merger rather than lose the prized content business. Telewest s ploy will have strengthened its hand in any deal which is one reason why it has outperformed NTL.
Porsche to take 20% of Volkswagen 25 Sep 2005 The move, bearing the fingerprints of VW s supervisory chairman, is terrible for German capitalism. It s patently designed to coddle VW. The best defence for VW from unwanted suitors would have been a coherent, wellexecuted strategy, something Piech never allowed to form.
Spanish builder swoops on Union Fenosa 23 Sep 2005 ACS has bought a 22% stake in Fenosa for E2.2bn, reportedly as part of scheme to keep the power firm in Galician hands. Similar regional politicking explains Gas Natural s bid for Endesa except ACS is paying richly for its prize and Gas Natural isn t.
SEC considers soft dollar limits 23 Sep 2005 Apart from a few wellpublicized abuses, it is not clear there's a big problem here that can't be solved through better disclosure. Moreover, the softdollar pie appears to be shrinking in the US.
The UK should get used to lower growth 23 Sep 2005 The latest downward revisions to UK growth forecasts are troubling to Gordon Brown and his appointees to the Bank of England. But previous estimates of the UK's trend rate of growth were based on unrealistic and outdated assumptions of productivity growth.
Skandia board split in rejecting Old Mutual 23 Sep 2005 A majority say no, but a minority says yes. Meanwhile, an independent fairness opinion gives the bid the thumbs up. It feels as if the majority doesn't want the odium of selling a Swedish national institution. Old Mutual is rightly pressing on.
How should Pepsi respond to Danone? 23 Sep 2005 The French food group s boss blamed Pepsi s `deafening silence for fueling continued speculation of a takeover. Here is the conciliatory letter Pepsi boss Steve Reinemund should send to Danone chief Franck Riboud.
Tremonti gets second shot at Fazio 23 Sep 2005 Given his ouster a year ago, Tremonti s willingness to return as economy minister must mean he s confident Fazio s days are numbered. But Tremonti will need political skill to solve the next crisis. To pass a budget fast, he will face pressure to loosen the purse strings.
Why hedge fund managers do well despite paltry returns 23 Sep 2005 It's because of the magic 2 and 20 incentive system. Even if average returns fell to zero, some managers would be as rich as Croesus. No wonder people are piling into the industry. That will depress investor returns even further but not necessarily rewards for managers.
What is the cost of capital? 23 Sep 2005 Many firms are still stuck on about 10%. In fact, in a lowreturn world, the number is more like 67%. So long as they use the wrong number, public companies will be at a disadvantage to private equity.
Citadel accused of hedge fund poaching 22 Sep 2005 In a widely circulated email, rival US fund Third Point has called Citadel's headhunting "an act of war". Hedge funds are starting to look like sports teams in their bitter rivalry and overgenerous payrolls.
Oil industry faces huge generational shift 22 Sep 2005 Many of the old oil chieftains at firms like BP, Exxon, Shell, Repsol and ENI are about to leave their posts or already gone. They ruled during the costcutting megamergers of the 80s and 90s, when oil prices were low. The new guard faces different challenges.
Deutsche gets punchy return from Fitness First 22 Sep 2005 The fund manager kept a 10% stake when Cinven took the UK gym chain private in 2003. Now it will make a roughly 80% return. That s a tidy victory. But being a minority in an unlisted company is risky. For private equity, holdouts are more a nuisance that a threat.
Dex sale will be private equity bonanza 22 Sep 2005 With Dex Media's pending sale to Donnelley, the buyouts of phone directory companies after the telecom bust are now coming full circle. And the results for private equity look brilliant. A tweak in Dex s results along with generous multiple expansion may yield a $2bn profit.
Italy’s economy minister resigns over Fazio 22 Sep 2005 Siniscalco s exit means that the Bank of Italy s governor has cost Italy two economy ministers in little over a year. This farce is immensely damaging. Without technocrat Siniscalco, Italy s already weak economic situation could well deteriorate.
Endesa short changed by Gas Natural side deal 22 Sep 2005 Gas Natural plans to partfinance its bid for Endesa by selling on a chunk of assets to fellow Spanish utility Iberdrola. It looks like Gas Natural is giving a big freebie away to Iberdrola. That cuts into the premium it is paying Endesa.
What happened to conservative economics? 22 Sep 2005 The principles of sound money and smaller government are in retreat for the first time since the 1970s. Just look at President Bush's blank cheque to rebuild New Orleans. People have grown complacent about inflation. They may come to regret it.
Bankers squeeze mega fees from Rentokil 21 Sep 2005 Gerry Robinson wants £58m to chair the support services group. Rentokil is spending almost half that to see him off. The fees look absurdly high. They suggest that Rentokil sees Robinson as a bigger threat than it has so far let on.
Bond conundrum stretches ever further 21 Sep 2005 The UK s new 50year inflation linked bond will yield a feeble 1.2%. Compare that to the 3.3% yield on inflationprotected equities. But demand for the issue has been strong. This is a triumph of regulation and a strange bond market over common sense.
Discounted rights issues lose their stigma 21 Sep 2005 Nowadays, it s rare to find a rights issue offered at less than a 30% discount. In the past, such discounts were rare. Cheaper underwriting costs and the 1987 stock market crash explain why they are becoming more common.
Hedge fund takes Versatel bid fight to court 21 Sep 2005 It failed to talk Tele2 into paying more for the Dutch cable company, so Centaurus Capital has opened a legal battle. That looks a tough line to take. But both Centaurus and Tele2 have their reputations, as well as money, at stake.
A quarter of London bankers see bonuses doubling 21 Sep 2005 And another half reckon they ll do better than last year, according to one survey. Meanwhile, the gap between job vacancies and job seekers is narrowing. That will surely crimp the profitability of the ongoing M&A boom.
Morgan Stanley brings up the rear 21 Sep 2005 In a vacuum, the bank s results before exceptionals would be nothing to scoff at. But compared to its rivals, they look rather weak. Revenue growth lagged chief rival Goldman, as it pulled back on risk. Investors will hope it s just the last of the Purcell effect.