Anglo takes first step on road to value 26 Oct 2005 The UKlisted miner is rethinking the future of assets that currently deliver a quarter of its profits. The shift is overdue, but welcome. If Anglo American can actually live up to its potential, the initial positive share price reaction doesn t go far enough.
Eutelsat float hurt by triple blow 26 Oct 2005 The satellite operator timed its flotation poorly. It has been hurt by falling equity markets and falling confidence in IPOs. BSkyB s acquisition of a broadband operator has also raised doubts over satellite. That has allowed investors to press for a better deal.
Daimler’s solid Q3 clouded by tough US outlook 26 Oct 2005 Operating profits at the giant carmaker rose 38%, beating forecasts. Troubled Mercedes is on the road to recovery. But incoming CEO Zetsche faces a tough US market and deteriorating prospects for Chrysler.
RWE right to consider E15bn water spin-off 25 Oct 2005 A float would easily attract outside investors, and would give greater transparency to the value of the German utility s water assets. That would be a welcome strategic shift for RWE. But unless it can convince otherwise, it should return the proceeds to shareholders.
Merger arbitrageurs take a beating 25 Oct 2005 As several large deals fall through in the US, mergerdriven hedge funds are becoming the weak link of the industry. The fourthquarter losses threaten to push many hedge funds into negative territory during a nearrecord year for M&A.
Wal-Mart calls for a higher US minimum wage 25 Oct 2005 The retailer says higher wages would boost spending by its main lowermiddle class customer base. In fact, it is keen to raise labour costs for its competitors. But the higher minimum wage will backfire for WalMart, too.
VNU buyout would be a big stretch 25 Oct 2005 A group of four private equity groups has reportedly been circling the beleaguered Dutch publisher since March. But they may be too late. An LBO might have been feasible when the share price was at E21. But at E27, it looks all but impossible.
Can private equity make Compass taste good? 25 Oct 2005 It s not surprising private equity is reportedly eyeing up the UK contract caterer. Its shares just hit at a fiveyear low. But limited potential for gearing and underlying wobbles would make this a tricky one for buyout firms to swallow.
Marconi makes best of bad hand 25 Oct 2005 The UK telecoms equipment maker has sold off most of its business for £1.2bn, leaving its pension fund and a small IT services group. Marconi has fetched a good price. And it can still recover more value from selling the fund or its remaining business.
Marconi pension deal a wake-up call to UK plc 25 Oct 2005 The regulator made the UK telecoms group plug its FRS17 hole and put money into escrow. Otherwise it would have blocked the Ericsson deal. The implications for other UK companies with large pension deficits are stark.
Stock market too keen on Bernanke 25 Oct 2005 His proposed appointment was greeted by a 1.7% rally. Investors like the idea of the Bernanke put . Bernanke may not care about asset prices, but he thinks inflation is dangerous. If his measure of inflation rises, he could prove tough.
Judge Drain right to sink Flowers’ Refco bid 25 Oct 2005 Flowers may have thought he could snap the bust firm's assets up on the cheap by moving fast and using his connections. But with other bidders ready to act swiftly and seemingly pay more, the bankruptcy court was right to strike down Flowers' sweetheart deal.
Cablevision stymies $8bn Dolan buyout 25 Oct 2005 Good for the independent directors. It would have been disastrous to sell it cheaply to the controlling family and watch it make a fortune. Gearing up is the right next step. But it still leaves things a mess not surprising, given the mercurial way the Dolans conduct business.
La Caixa should be privatised 24 Oct 2005 Spain s biggest savings bank, or caja, is powerful, efficient, successful and profitable but also unaccountable. Gas Natural s hostile bid for Endesa has highlighted La Caixa s and other cajas political links. Privatisation is an obvious solution.
Investors too calm about Polish elections 24 Oct 2005 They are sure that the new government will not act irresponsibly. But after winning two elections, the PiS party can guide policy. And the party is not friendly to investors. Its nationalist slant is likely to favour big government over fiscal prudence.
Santander courts trouble with US deal 24 Oct 2005 A stake in Sovereign Bancorp might not be the bargain it appears. There are good reasons for Santander to hold fire. Minority investments are no longer as popular. And it will be supporting a board which is in part to blame for Sovereign s discount.
Canny Fidelity looks to steal a march on rivals 24 Oct 2005 Its deal with Lehman to separate research from trading commissions, and fund research out of its own pocket, looks statesmanlike. However, the fund manager is also beefing up its large inhouse research team to squeeze smaller competitors.
Cendant plans four-way split up 24 Oct 2005 Investors have tired of the complexity of the $21bn US services conglomerate. So it will split into its component businesses. The new companies will be easier to value, and to take over. Hotels, rental cars and real estate agents are all natural LBO businesses.
EDF float paves way for massive value destruction 24 Oct 2005 The French electricity giant could sell up to E8bn of stock on October 28, the largest European float in years. But the group s plan to invest E40bn over the next five years could also set a record for squandered riches.
Red October for hedge funds 24 Oct 2005 The recent collapse in energyrelated assets has caught out many equity and macro funds with geared exposure to the sector. It would be a good thing if this deterred fresh inflows into hedge funds. Less capacity would make it easier to achieve positive returns.
Bush names Bernanke as new Fed boss 24 Oct 2005 The new Fed chairman is best known for his antideflation credentials. He promised to use extraordinary measures to fight depression. Bernanke s response to an inevitable US housing bust will ensure that the easymoney policies of his successor will continue.
There’s still money in oil stocks 23 Oct 2005 Oil equities have taken a drubbing lately largely on fears that high oil prices will crimp demand and boost oil supplies. Yet there is little sign so far that high energy prices have caused either though it continues to do wonders for oil firms profits.
Rival challenges Flowers’ bid for Refco 22 Oct 2005 Interactive Brokers bid for Refco s futures business may set up a bidding war, which could give creditors a bit of extra cash. But only if a sale happens soon. Clients have withdrawn lots of money. The buyer must be confident Refco can keep what is left.
GM presents sad model for US economy 21 Oct 2005 In the good old days, what was good for GM was good for the nation. The correlation still stands, but now it s negative. Like the limping car giant, the US has combined industrial weakness with spiralling debt. Financial engineering won't rescue either of them.
Mandelson struggles in Doha talks 21 Oct 2005 The EU trade commissioner says he favours trade liberalisation. But he has failed to carry the other Europeans with him. That s because his negotiation tactics irritate rather than persuade. He risks letting the US appear virtuous.
Nextel Partners set to force Sprint buyout 21 Oct 2005 Sprint and Nextel Partners should move fast to settle the put option the latter has on the former. It is in both sides' interests to avoid a prolonged and expensive valuations fight.
Robinson plan ends with a whimper 21 Oct 2005 The entrepreneur was always on the back foot in his Rentokil approach, which was slow and unfunded. He also took time throwing in the towel. Yet Robinson's plan was to shake up Rentokil. No wonder investors were underwhelmed.
BSkyB overpays for broadband presence 21 Oct 2005 The broadcaster is offering an 80% premium for Easynet, the internet company, and a multiple of 18 times ebitda. That looks too much. BSkyB could more cheaply have built a broadband presence from scratch.
Top Compass executive linked to UN scandal 21 Oct 2005 Links between the UK contract caterer and a UN contractor at the centre of a corruption scandal may have been far closer than suspected. The scandal involves only a small part of Compass's activities. But it could be symptomatic of a wider malaise at the group.
Viacom’s split fizzles 21 Oct 2005 The media group s stock price suggests the real problem was not a conglomerate discount, but a Sumner Redstone one. The breakup still leaves two companies under the baronial control of the chairman and his daughter.