Directors can squeeze more out of Computacenter MBO 4 Dec 2005 Investors naturally distrust management buyouts. After all, the insiders could be underbidding. A look at the economics of the UK computer seller suggests the independent directors can make the bidders pay more.
LBO market reaches for new records 4 Dec 2005 Following last week's $15bn buyout of TDC, bankers are talking about $20bn or even $25bn deals. Even KKR's record $31bn RJR Nabisco buyout in 1988 doesn't look impregnable.
Investment bankers don’t gobble up all the profits 2 Dec 2005 It s a widely held belief that employees of investment banks pay themselves generously, leaving few scraps for their shareholders. But based on accrued compensation this year, that s not the case for Wall Street s leaders Goldman and Lehman. It s only true for laggards.
NYSE’s Thain has much still to prove 2 Dec 2005 The NYSE boss didn t show a deft political touch in putting together what otherwise looks like a smart transaction the Archipelago merger. To deal with its Goldmanrelated outcry, he made many promises to constituents. The implied share price is now very high.
Commodity boom shows need for higher rates 2 Dec 2005 From lead to sugar, prices are rising at a dizzying pace. It s a clear sign of too much money chasing too few assets. Interest rates are now going up in most of the world s economies. But they are still much too low to calm down this speculative fever.
EU should accept Blair’s grubby compromise 2 Dec 2005 The UK prime minister's offer to surrender Britain's EU rebate in return for cuts to regional aid is hardly satisfactory. It leaves the scandalous CAP intact. But there is too much at stake to delay a budget deal again. EU leaders should sign up.
Blackstone’s hedge fund push looks hazardous 2 Dec 2005 The private equity group is reportedly mulling an equity longshort fund. That s already an overcrowded hedge fund strategy. And Blackstone will have to manage the conflicts with its existing buyout funds.
Gold at $500 no longer an inflation hedge 2 Dec 2005 Many investors hold the precious metal to protect themselves against rising inflation. However, the recent spike has driven the gold price above its longterm relationship to the inflationadjusted dollar.
French finally get tough on mobile oligopoly 1 Dec 2005 The E530m fine for price collusion shows regulators mean business about rooting out anticompetitive practices. That s good for rivals trying to break into the market.
Spirit deal creates lots of winners 1 Dec 2005 Punch Taverns' £2.7bn purchase of the UK pub group should enhance earnings and generate returns above its cost of capital in year one. But the real winners are Spirit's private equity owners, who have made a sizeable return on their original investment.
Flatter yield curve could boost equity volatility 1 Dec 2005 Volatility has been unnaturally low. But that could change, thanks to the shift in the bond market. If so, one of the most popular type of hedge fund trades could blow up.
Janus is too pricey for a buyout 1 Dec 2005 The growthstock fund manager has reportedly considered a management buyout. But at the mooted MBO price of $17 a share below the current $19 stock price the deal would be a financial stretch for private equity.
Blackberry maker may have to pay up or shut down 1 Dec 2005 RIM, the phone maker, could have ended its patent dispute with NTP for a negligible sum years ago. Instead, it has gratuitously and repeatedly insulted NTP. A $1bn bill for its behaviour may be on the way.
DP World hits on neat petrodollar arbitrage 1 Dec 2005 The Dubai ports operator has come up with an innovative $2.8bn convertible bond to finance its acquisition of P&O. It is exploiting a valuation discrepancy between the redhot Abu Dhabi stock market and relative tepid Western ones.