Italian and Spanish E22bn merger driven by tax advantage 24 Apr 2006 Sure, merging Autostrade and Abertis might give it the scale to compete for global infrastructure projects. But the juice is in the special Spanish tax break. To get it, the Italians have had to give up its headquarters and management control.
Markets complacent over risks to growth 24 Apr 2006 Not even a 6% rise in the oil price last week could dent investor confidence that global growth will continue to motor. Only the bond markets seem remotely worried. But the whole train could derail if inflation picks up.
Porsche consolidating power at Volkswagen 24 Apr 2006 Porsche boss Wiedeking is seen heading for Piech s job as VW chairman; he s apparently got union backing. That s bad news for shareholders. He ll arguably become the most powerful man at VW. Shareholders should rally against Wiedeking at VW s AGM in May. Porsche boss Wiedeking is seen heading for Piech s job as VW chairman; apparently with union backing. That s bad news for shareholders.
Blackstone’s E2.7bn DT purchase is extraordinary 24 Apr 2006 Private equity funds typically want control of companies. But Blackstone is only getting 4.5% despite writing an extremely large ticket. Buyout firms have a lot of cash on hand. Blackstone s purchase is either creative or desperate.
Will anyone run Alcatel and Lucent? 24 Apr 2006 The terms of their merger reportedly require twothirds board vote to remove the chairman or the chief executive. The transatlantic power sharing agreement between the telecom equipment makers is already a fudge. Institutionalising it is a poor idea.
Vodafone irritated with Goldman conflicts – exclusive 24 Apr 2006 The mobile giant is probably Goldman s best ever European client. The bank was used for iconic transactions like the hostile Mannesmann bid. Vodafone is annoyed because Goldman is advising rivals another sign of how the bank s franchise as a trusted adviser is being eroded.
Vodafone break-up could unlock £24bn of value 23 Apr 2006 Closing the mobile operator's discount to its fair value would prove a goldmine. That has reportedly whetted appetites of potential buyers. Vodafone looks protected by its huge size for now. But that should not stop it borrowing the breakup artists best ideas.
Debenhams bosses show timing is all in LBOs 23 Apr 2006 The UK retailer s managers made a packet when they ran Homebase. But GUS, its subsequent owner, hasn t done so well. No wonder potential investors in Debenhams are so keen for them to stick around and stay invested.
Goldman conflicts threaten corporate franchise 21 Apr 2006 The backlash over its aggressive approach to UK companies and its willingness to back multiple horses in the same industry is taking a toll. Paulson's edict to cool it may provide a reprieve. But Goldman will find it increasingly hard to pursue its own and clients' interests.
Italy should consider giant debt-to-equity swap 21 Apr 2006 With debt at 106% of GDP, a sluggish economy and a budget deficit, Italy is in a box. It needs creative solutions to get out of it. A E400bn asset disposal programme or even a debttoequity swap might do the trick. But it wouldn t be easy to pull off.
Thomson investors will be wary of management buyout 21 Apr 2006 Investors naturally distrust MBOs because insiders could underbid. And this one would carry several potential yellow flags. The French group is run by a politicallyconnected, exinvestment banker. And a private equity fund already has a say in the boardroom.
New York Times buyout not as likely as it looks 21 Apr 2006 A buyout by the Sulzbergers is superficially attractive as the stock tumbles and outside shareholders become increasingly pesky. But the family might conclude it s better to put up with sniping from powerless shareholders than paying heed to banks or private equity.
BSkyB sacks Goldman as broker – exclusive 21 Apr 2006 This may seem astonishing given the traditionally deep relationship between the Murdochs and Goldman. But given that Goldman just tried to buy ITV, one of Sky s biggest rivals, and is a close adviser to NTL, its other, you can see why.
Investors should be wary of KKR’s IPO 21 Apr 2006 KKR's plan to raise $1.5bn of public equity might seem to offer an easy, liquid way for smaller investors to play in private equity. But with deal prices and leverage rising, now might not be the best time for them to enter the fray.
EBay tries to restore balance of power in cyberspace 21 Apr 2006 The current battles between internet giants resemble those of the Great European Powers in the 18th century. The web auctioneer now fears the rising power of Google, just as France fretted over the growing might of Prussia.
Kleinfeld should push telecoms out of Siemens nest 21 Apr 2006 The German conglomerate's boss set performance targets for all divisions when he came in last year. Perform or be sold was the message. The telecoms firm is almost certain to miss them. So it's no surprise he's trying to take advantage of ongoing sector consolidation to exit.
Lehman snaps up Morgan Stanley’s European diaspora 20 Apr 2006 It s easy to see why. Lehman is doing lots of hiring, and is paying up to get talent. Morgan Stanley is going through a bloodletting. Defectors also think Lehman is like the old Morgan Stanley. That suggests Morgan Stanley boss John Mack should get with his reforms.
Gazprom’s bullyboy rhetoric is counterproductive 20 Apr 2006 The Russian gas giant should be trying to reassure European countries that it won't use its quasimonopoly power to hold them to ransom. Threatening to switch future supplies elsewhere unless it gets to own distribution networks will make governments less willing to let it in.
Handset boom in emerging markets can’t go much further 20 Apr 2006 More than twothirds of volume growth in handsets now comes from emerging markets. Nokia thinks half the world, or 3bn people, will have mobiles by 2008. Trouble is, the other half can t afford a phone.
Greenhill’s huge premium rating undeserved 20 Apr 2006 The boutique is not so pure a play on the M&A markets anymore. Half of Q1 revenues came from merchant banking. Moreover, M&A fees are growing slower than rivals like Goldman. Its p/e rating of 31 looks too high.
Debenhams backers try on ambitious £1.8bn valuation 20 Apr 2006 At that price, the UK department store would trade at a 15% discount to the retail sector. At first blush, that might seem fair. But with no property and breakneck expansion planned, investors are being asked to swallow huge risk, which may not be fully priced in.
Arcelor shareholders should reject board 20 Apr 2006 The steelmaker isn t letting its owners vote directly on its defence plan. The best they can do is not to reelect the directors. It s ironic that Arcelor has thrown away its best competitive advantage in the fight with Mittal its corporate governance.
Buyout funding costs could spike 20 Apr 2006 TDC and ISS may have to pay up for the E3bn in highyield bonds earmarked to partially fund their private equity buyouts. They will want to avoid the embarrassment Ineos went through when its expensive bonds traded poorly in the aftermarket.
Eiffage battle a victory for French minority shareholders 20 Apr 2006 But in stopping Sacyr from gaining a large measure of control without paying a premium to shareholders, Eiffage has defended itself well. Often French resistance to foreign predators is wrongheaded. Think of Danone or Suez.
Bayer should break itself up 19 Apr 2006 The German conglomerate should use its E16.5bn Schering bid as an opportunity to sell off its chemicals business, among other units. This would erase a 20% conglomerate discount and reduce the need for a big dilutive capital hike to fund Schering.
Fed stance misguided 19 Apr 2006 The US central bank seems to think overnight rates are almost high enough. That would make sense if the economy were slowing. But jobs are tight and growth is high. Not to mention high inflation and the huge trade deficit.
What should Russia do with its petrodollars? 19 Apr 2006 The World Bank thinks Russia should spend them on foreign assets including equities. Russia does need to invest outside its energy sector. But its petrodollars would be better spent at home in building up a broader economy.
Italian financier Ricucci arrested 19 Apr 2006 While many of the lynchpins of last summer s financial scandals have been marginalised, the cleanup is not yet complete. The hope is that, under the new Prodi government, it may become slightly easier to crack down on financial crime.
Oil price still doesn’t reflect Iran crisis 18 Apr 2006 At $70 a barrel, the price is up by 25% over the last year. That makes it a laggard among commodities. The oil price would rocket with even mild Middle Eastern chaos. But the standoff over Iran s nuclear plans makes chaos much more likely.
Standard Life shares are a speculative bet 18 Apr 2006 The UK insurer aims to float at a sizeable discount to European peers. Even so, it may not be the bargain it looks. Its recovery remains a work in progress. And a takeover at a meaningful premium may prove elusive.