Hedge fund cage-rattling doesn’t always work 26 Jan 2006 A handful of US companies, most recently McDonald's, have seen off campaigns by activist investors, who sometimes overstate their cases. But that isn't the same as not having any case. Even in the McDonald's case the hedge fund forced some changes, though not the full Big Mac.
Deutsche helps Linde attack existing client 26 Jan 2006 One can understand why the German bank chose to advise Linde in its £7.6bn bid for BOC, a corporate broking client. It's probably lucrative. But going against Deutsche's normal habit of not helping assaults on clients may undermine its corporate broking practice.
Repsol reserves cut is even worse than Shell’s 26 Jan 2006 Repsol replaces only a fifth of its reserves. Boosting them will require expensive M&A or huge investment. Neither bodes well for returns. The Spanish oil firm has cut its reserves by 25%; Shell cut by "only" 20%. And the Spanish oil firm is in a worse strategic position too.
Iraq bond exuberance is overdone 26 Jan 2006 Iraq s new sovereign issue traded higher than Argentina this week. That doesn t seem rational. Investors may think there is an implicit US government guarantee, but there are still plenty of risks in Iraq.
Investors expect more from bid battle over P&O 26 Jan 2006 PSA, owned by the Singapore government, has come through with a 470p per share offer for the UKlisted ports group, outbidding DPW. The Dubai group has rich backers, is thinking strategically and is unlikely to give up now. P&O s current 515p share price looks justified.
Perella super-boutique spans Atlantic 26 Jan 2006 The recruitment of Paulo Pereira, one of Morgan Stanley s top European bankers, is the latest addition to a formidable lineup. Perella s timing looks good: exploiting client unease about whether they can fully trust bulge bracket firms and Morgan Stanley s turmoil.
DT pays price for stuffing T-Online minorities 26 Jan 2006 Thanks to a court delay, the German telecom firm won't now complete a planned merger with its internet arm before the deadline next week. DT only has itself to blame. It should have offered minorities a premium rather than keep all the synergies for itself.
Congress mistakenly links CEO pay and pensions crises 26 Jan 2006 The problem of supplemental executive pension plans goes beyond companies with underfunded worker pension plans. There is no reason to link reform of executive pensions with the underfunding of worker pensions, which is a problem all its own.
Financial boom is deceptively beneficial 25 Jan 2006 Financial assets have grown at almost twice the rate of GDP for a decade. The easy money has smoothed over some economic cracks. But the benefits of this socalled financial depth are less convincing when set besides mounting economic risks.
Disney pays full price for quick fix 25 Jan 2006 Few question the strategic rationale behind Disney s $7.4bn bid for Pixar. But the hefty price tag makes the move risky. To justify the price, Disney needs to make sure the animation studio keeps up its remarkable winning streak.
Greenberg turns tables on Spitzer 25 Jan 2006 AIG s former boss wants to put the New York Attorney General on the witness stand as part of a novel defence against civil charges. He is upset that Spitzer used findings from an AIG probe to force him out of the insurer. But he will struggle to get Spitzer s testimony.
Speedy German recovery should drive up euro rates 25 Jan 2006 The latest survey of business conditions was a knockout. Even the longsuffering construction sector looks pretty healthy. The strength is fundamental, so it should endure. In this healthier world, euro rates look much too low.
Qinetiq targets speculative £1.3bn float price 25 Jan 2006 The UK governmentcontrolled defence group would be selling at 20% more than expected if it floats at the top of its price range. That may please critics who accused the government of shortchanging taxpayers. But it will be a tough sell for investors.
Private equity could call TDC bondholders’ bluff 25 Jan 2006 TDC s creditors have overplayed their hand by rejecting the company s new private equity owners offer to buy them out at par. The bondholders are overestimating their nuisance value. The private equity firms don t need to buy them out to get the deal done.
SAP growth justifies premium rating 25 Jan 2006 The German software maker is bullish about prospects for licence growth and margin expansion as it takes market share from rival Oracle. The shares trade at a 30% premium to other global software groups. But with this kind of performance, they could go higher still.
US regulators frown on strip clubs 24 Jan 2006 The NASD and NYSE are proposing a set of guidelines to prevent traders from using improper entertainment to woo deals from their clients. It s hard to fault wanting to cut back on these often inappropriate quid pro quos. But why can t the banks decide this for themselves?
Europe’s record junk bond bucks nervous trend 24 Jan 2006 Ineos record E3.1bn bond to partially fund the UK chemicals company s acquisition of Innovene should be popular. Although bond investors are starting to get nervous, they like Ineos and the arranging banks have used a savvy selling strategy.
Alitalia bankruptcy a pipe dream 24 Jan 2006 Italy s labour minister says bankruptcy may not be a disaster for Alitalia. He is right. In most industries, Alitalia would have been sold or shuttered years ago. But that won't happen while the government keeps writing cheques.
German companies show taste for hostility 24 Jan 2006 As BASF/Engelhard and Linde/BOC show, confident German executives are taking a muscular approach to building up foreign operations. Now they're playing the AngloSaxon game, it will be harder for German companies to put up the barricades the next time a foreigner attacks.
BASF should stand firm over Engelhard 24 Jan 2006 The German chemical group is under pressure to offer more, after Engelhard snubbed its $37ashare bid and put itself up for sale. BASF shouldn t need to pay much more than $40 for a recommendation. But it should resist the temptation. It's already offering a full price.
Vodafone uptick won’t end Sarin’s problems 24 Jan 2006 The mobile operator is growing revenues and customers fast. It is even showing signs of turning round Japan. Even so, Vodafone's CEO is likely to remain under a cloud until he can prove his US strategy, expensive deals and technology will pay off.
Pension funds can’t beat US endowment returns 24 Jan 2006 Stanford University s investments grew 23% last year, thanks to its venture capital portfolio. That may tempt pension funds to follow suit. But as history shows, they face big risks chasing alternative assets without the skills or connections to select the best managers.
ThyssenKrupp sensibly quits race for Dofasco 24 Jan 2006 The German conglomerate decided not to match Arcelor s latest C$71 per share bid for the Canadian steelmaker. It was a sensible retreat. Shares in both bidders rose on the news. But even at this price, Dofasco is hardly a bargain.
BOC rebuffs Linde’s generous £7.6bn bid 24 Jan 2006 The market has long thought a deal between the two industrial gas players makes sense. But why should Linde be on top? The German company is 25% smaller than its UK rival. BOC's best defence might be to launch a counterbid.
Deutsche hire could help defend its respectability 24 Jan 2006 Caio KochWeser's appointment as vicechairman means the outgoing chairman of Germany's financial regulator will soon be advising the board. If used effectively, he may help Deutsche avoid more embarrassments such as its links to Italy s banking crisis and an alleged rogue trader.
Bankrupt US bosses enjoy big paydays 24 Jan 2006 UAL's will share $480m when the airline exits Chapter 11. That appears repugnant yet bosses deserves a premium for staying put. The trouble is that it has to be paid on top of the already excessive levels of executive compensation at US companies.
US regulators frown on strip clubs 24 Jan 2006 The NASD and NYSE are proposing a set of guidelines to prevent traders from using improper entertainment to woo deals from their clients. It s hard to fault wanting to cut back on these often inappropriate quid pro quos. But why can t the banks decide this for themselves?
Iranian nuclear stand-off threatens new oil shock 23 Jan 2006 The Iraq war has left the US weaker. That makes a drawnout crisis more likely. The price of oil already has a $10 premium for political risk. It could easily go higher.
Albertson’s bows out for $17.4bn 23 Jan 2006 The retailer couldn t keep up with WalMart. Breaking Albertson's into pieces may allow its new owners to compete more effectively. Buyer Supervalu takes on the bulk of the risk, however, while CVS looks to have walked away with a bargain.
Financial markets less fragile than first appears 23 Jan 2006 Political and corporate woes knocked the US equity market last week. But even so, it is still up 7% since October. And bond markets seem immune to the issues making equity investors nervous. Overall, this does not look like a pandemic of financial fear.