Mittal is trying to grab Arcelor on the cheap 17 Feb 2006 Its offer effectively values its own paper at a 34% premium to Arcelor s. Some premium is justified, but not that big a one. That said, to get a better price, Arcelor will have to produce a proper defence.
Digital convergence creates more losers than winners 17 Feb 2006 The barriers between fixedline and mobile telecoms, internet, entertainment and cable firms are being eroded by technology. These five industries resemble a pack of fighting dogs. Each assaults another whilst being under attack itself.
Time Warner shoos away pesky Icahn – report 17 Feb 2006 With only a 3.3% holding and an unimpressive turnaround plan, Icahn was always more gadfly than convincing conqueror. The US activist investor is now seeking only a minority of board seats and settlement talks with the media conglomerate.
LSE gears up to fend off Macquarie 17 Feb 2006 Could it could go further? Possibly. But Macquarie s bid is now so off the pace that it doesn t need to bust a gut. It is wisely doubling its capital return to £510m. The exchange can sustain higher gearing and the move jacks up earnings sharply
Intesa/Monte Paschi merger has risks 17 Feb 2006 Otherwise, Intesa shareholders would be better off with the status quo where there s a chance of a bid premium from Credit Agricole. It would only make sense if the charitable foundation that controls Monte Paschi was substantially diluted.
Bond investors ignore LBO risk 17 Feb 2006 Wall Street tip sheets of potential LBO targets now contain some sizeable names, such as KimberleyClark. With so much private equity money looking for a home, bondholders must wake up to the threat.
Diageo reassures market with strong H1 results 16 Feb 2006 The UK drinks group calmed fears of a tougher spirits market with a strong first half, led by impressive growth from developing markets. Diageo's investment proposition of strong cashflow and high returns remains compelling. But questions surround its strategy on beer.
French cultural exception lives on in pay-TV deal 16 Feb 2006 But the beefedup Canal+ firm, in which Lagardere has now taken a stake, remains an oddity and very much a work in progress. Growing competition and rising costs have finally prodded France s two payTV platforms to merge years after most European counterparts.
Merrill’s Blackrock deal unlikely to be widely imitated 16 Feb 2006 Apart from Morgan Stanley, no other investment bank s fundmanagement units face the same conflicts. But as competition from index and hedge funds increases, these captive asset managers risk becoming wasting assets.
Bankers hold Credit Suisse to ransom 15 Feb 2006 The Swiss bank achieved okay revenue gains in investment banking in the fourth quarter. But staff and other expenses spun out of control. Credit Suisse has long battled with an addiction to excess costs. The M&A boom has tempted it fall to off the wagon again.
Merrill unlocks value with Blackrock deal 15 Feb 2006 At first blush it looks like Merrill is accepting a low price to hitch onto a market leading highvalue bond manager without control. But the deal values its asset management business at a big premium to Merrill s overall multiple. That creates value for its shareholders.
Weak Mittal results won’t damage Arcelor bid 15 Feb 2006 Mittal s shares look cheap at seven times trailing earnings. Arcelor shareholders are not likely to shun this paper. The Londonbased steelmaker reported a 58% fall in quarterly profits. But an 18% ROE in a bad period is a sign of strength.
Investors need to wise up about stock lending 15 Feb 2006 Hong Kong hedge funds have succeeded where US funds failed using borrowed stock to scupper a deal where they already had a short position. That was hardly in the interests of the stock's underlying owners, who should remember that voting rights have value too.
BNP Paribas falters in shift abroad 15 Feb 2006 Foreign retail businesses contributed more than domestic ones to BNPP's revenues last year. With Italy's BNL on board, that lead will grow. BNPP is escaping its sluggish home market, but at a price. Investors are fretting it will be tempted into more acquisitions.
The reason smart money doesn’t short Apple 15 Feb 2006 The US computer firm has sold about 1bn songs at cutrate prices over the past three years to subsidise iPod music player sales. Apple is locking these customers into its music standard. It looks well on its way to collecting digital rents.
Shell companies attract the attention of Wall Street 14 Feb 2006 Special purpose acquisition vehicles are becoming a popular way to raise acquisition finance for smaller companies. However, their increasing size and rising leverage indicate speculative excess.
VNU risks another big clash with investors 14 Feb 2006 Some shareholders believe the Dutch media group could fetch far more via a breakup than a sale to private equity. The real issue is one of trust. The board should follow Hollinger s lead and appoint a credible interim chief executive to manage the sale.
France Telecom’s 17,000 job cuts look modest 14 Feb 2006 Spread over three years, this target should be a cinch. The French telecoms operator has been ditching staff at a far faster rate. But when FT has got into such trouble for breaking its promises, it is not surprising it wants to set the bar low.
Fed is losing its grip on credit system 14 Feb 2006 Securitisation and foreign inflows have undermined the Fed s ability to control credit creation. This explains why liquidity conditions in the US remain loose despite 14 rate hikes.
UBS strikes gold in M&A boom 14 Feb 2006 The Swiss bank saw advisory revenues climb 43% yearonyear in the fourth quarter. Its wealth management franchise also thrived. Cost pressures are mounting, and plans to return capital are sadly modest. But UBS's ability to generate stellar returns is not in doubt.
Italian companies queue to IPO 14 Feb 2006 Investors everywhere are more interested in IPOs and that s true even for equity sceptic Italy. But buyers beware. Many wouldbe issuers are domesticallyfocused companies and the Italian economy is weak.
Buffett’s exit provides Coke with fizz 14 Feb 2006 The great investor s departure from the Coke board has added $1.5bn in market value. This suggests that investors frustrated by Coke s poor performance want change. Buffett's presence hindered change.
Hutch tries to save face with 3 Italia deal 14 Feb 2006 Having pulled the IPO of 3 Italia, Hutch has tried to demonstrate the mobile unit's value by issuing a convertible. But it doesn't look as if anyone believes in the valuation, and the convertible has cost Hutch a packet. Not a good use of money.
VW restructuring doesn’t look very radical 13 Feb 2006 The carmaker is trying to squeeze concessions from workers. But these won t allow VW to catch up with its rivals, let alone overtake them. VW isn t a normal company though. Taking small steps may be the only way to overcome union opposition at least initially.
Ferrovial could gear BAA to the hilt 13 Feb 2006 Given BAA's utilitystyle cashflows, Ferrovial could borrow £12bn against it close to the £14.6bn they'd need for a 900p a share offer. True, BAA's costly expansion plans could be a problem. But Ferrovial's seasoned financial engineers could park these offbalance sheet.
BOC Linde merger may not pass Brussels’ muster 13 Feb 2006 At first glance, regulators shouldn't be too bothered about a merger of the two industrial gas firms. There's hardly any overlap But history suggests Brussels will scrutinise further consolidation of this highlyconcentrated market and could demand large disposals. At first glance, regulators shouldn't be too bothered about a merger of the two industrial gas firms. There's hardly any overlap.
Merrill pips Morgan in $8bn Blackrock deal 13 Feb 2006 Having lost out once already on finding a home for its asset management arm, Merrill is pouncing on the opening Morgan Stanley left wide. This reflects a greater evolution in Stan O Neal s strategic thinking than John Mack s, provided he doesn t squander value for stockholders.
More gilts no answer to UK pension problems 13 Feb 2006 Pension funds want more longdated debt to match their liabilities more precisely. And the government could save money by increasing supply. A winwin solution then? Not if too many lowyielding bonds overwhelm. A winwin solution then? Not if too many lowyielding bonds overwhelm pensions funds.
Fox-Pitt is a serious threat under Flowers 13 Feb 2006 The research boutique s franchise may be damaged. But its specialisation in financial institutions is still a huge advantage. With exGoldman whiz Chris Flowers backing its MBO, FoxPitt could yet poach clients from other boutiques if not bulgebracket firms.
Will Prodi stop Italy’s decline? 13 Feb 2006 The man who may be Italy's next PM is alive to the need to fix its finances but hasn't spelt out how he'll do it. That, and a partial reversal of Berlusconi's labour reform, are the weaknesses in an otherwise promising manifesto.