Morrisons boardroom battle ends in fudge 25 May 2006 Sir Ken Morrison is to hang on as chairman until 2008, then become an honorary figurehead. That s a victory of diplomacy over common sense. His continued presence could clip the wings of the new chief executive. And making a big shareholder life president is a risky business.
Equity bull market isn’t about to end 25 May 2006 That s because there hasn t been a bull market at least not compared with debt, emerging markets, commodities and a host of other assets. True, stocks will get crushed if current high profitability ends. But that is only likely after a rout in other assets.
Italy should learn from Belgium 24 May 2006 But Italy's debt has only fallen from 125% to 106% and now its rising again. Why can't Italy get its house in order? Twelve years ago, Belgium and Italy were European fiscal basketcases. Since then, Belgium has cut it national debt from 136% to 93% of GDP.
OMV scraps ridiculous merger with Verbund 24 May 2006 The Austrian oil group s planned takeover of its compatriot utility was a clumsy attempt to create a national champion. Combining the two made little industrial or financial sense. The resulting fall in OMV s share price destroyed the political logic too.
Vonage IPO flops massively 24 May 2006 The cash burning US internet telecoms group with a questionable future fell as much as 15% in its first day of trading. Inviting retail investors into the float may have pumped up the offer price but it leaves underwriters with egg on their faces.
NYSE has ample firepower for Euronext battle 24 May 2006 The Big Board s debtfree balance sheet leaves it plenty of room to gear up if it needs to increase its offer for the FrancoDutch exchange. Doing so would hit returns from the deal. But offering more cash might soothe Euronext investors worried that NYSE s shares are overpriced.
China joins emerging-market mobile rush 24 May 2006 China Mobile s reported $5.5bn offer for Millicom is a rich price and an effective premium of nearly 100%. China s deep pockets mean it can afford to pay. That means trouble for mature operators struggling to buy emergingmarket assets.
Kingfisher investors nail their hopes on a bid 24 May 2006 The UK DIY retailer has been hammered by a consumer slowdown and stiff price cuts. So why the 30% premium to the sector? Partly it s because speculation a US rival will swoop is firmly baked into the share price. But investors may be waiting for a while.
UBS’s China strategy makes sense 24 May 2006 The Swiss bank may seem to have a bit of a me too strategy, taking small stakes in the Bank of China and a Beijing brokerage. But it s actually trying to build goodwill in Beijing so it can take advantage of the opening up of the Chinese wealth management market.
Myspace holds the cards in search negotiations 23 May 2006 The teen networking site may have rapidly become one of the web s most popular, but it hasn t figured out an effective way of cashing in. Teaming up with Google or Microsoft for search could do so and increasing competition between the two benefits Myspace.
Euronext deal would allow NYSE to skirt Sarb-Ox 23 May 2006 The Big Board s share of international listings has plummeted since SarbanesOxley passed into law in 2002. European exchanges have been the beneficiaries. Buying Euronext could give the NYSE a way back into the game.
Goldman group pries open ABP’s books 23 May 2006 The UK ports operator warmed to a £2.5bn pricetag an 11% improvement on the offer rejected in March. Goldman Sachs will be relieved. ABP is the only one of its four controversial, unsolicited UK LBO approaches that appears to be working.
Euronext vote gives Theodore another chance 23 May 2006 The exchange s CEO did well to drum up two suitors despite being under pressure to sell to Deutsche Boerse. But both bids were unattractive. Unfortunately, the Germans were so far off the pace that Theodore may face an uphill struggle to get NYSE s price up.
Mining sector sell-off is overdone 23 May 2006 Most mining stocks have underperformed the market this year. Yet even after the last week, metals prices are up massively. That s left mining stocks looking cheap. Xstrata understands this, which is why it is paying cash for Falcobridge.
Goldman promotes client guy 23 May 2006 The naming of Yoel Zaoui as sole head of investment banking in Europe comes just after Goldman's clients seemed to be taking the back seat. There may be no connection between the two events. But Zaoui looks like he'll be a strong advocate of corporate clients in internal debates.
Peltz to Heinz: sell more ketchup 23 May 2006 Ok, that s not all the reformed raider asked for in his 21page white paper on the company. He wants $575m in cost cuts, too. The funny thing is Heinz s expenses aren t that out of line. By inference, it appears the food industry at large is Peltz s real target.
Private equity pays full price for Eircom 23 May 2006 Australia s Babcock & Brown Capital is paying a richer multiple for the Irish telecoms operator than Denmark s TDC went for. It has also given favourable terms to its buyout partner, Eircom s pension fund. No wonder B&BC trades at a discount to its net asset value. It has also given good terms to its buyout partner, Eircom s employee trust. No wonder B&BC trades at a discount to its net asset value.
Snap back in risky assets merited 23 May 2006 The sharp rise in volatility is not as much a cause for alarm as a reversal of excess. Risk premiums had been too credit had been too low. Some fall in risk premiums over the past decade may have been warranted but, as usual, markets got overexcited.
M&S suffers from great expectations 23 May 2006 Two years into its recovery plan, the UK retailer's share price has doubled. But the worry is that M&S has run out of positive surprises. Yet M&S still offers a compelling recovery story. Its rating relative to the sector looks pessimistic.
Stagflation worries lie behind market jitters 22 May 2006 The combination of high inflation and slow growth would be a monster threat to highly geared economies. But does it really loom? There are few signs as yet. But the US could be vulnerable, after so many years of easy money and huge trade deficits. There are few signs as yet. But the US could be vulnerable after so many years of easy money and huge trade deficits.
NYSE bid puts pressure on Deutsche to do better 22 May 2006 The US exchange may not be paying a premium, but its bid looks superior to Deutsche Boerse s merger of partners . But it won t be easy for Deutsche to improve its proposal. It has, after all, eschewed paying premiums for rivals.
BASF is closing in on Engelhard 22 May 2006 It upped its bid for the US catalyst maker to $39 a share and made it final. An extra $1 may not sound like much, but it may do the trick. Investors don t seem convinced by Engelhard s defence plan a $1.2bn share buyback. And there is no white knight to trump BASF s offer.
Arcelor seeks rival deal to thwart Mittal 22 May 2006 There s nothing wrong with exploring alternatives like buying Russia s Severstal. But shareholders must be given a say. What s more, the scheme being considered with the Russian group isn t likely to create as many synergies and raises thorny questions.
A&L looks pricey target for Credit Agricole 22 May 2006 Buying the UK mortgage bank would appear to offer few synergies. Without them, Credit Agricole would struggle to make the deal stack up. The French bank may be best awaiting better targets. Just because it has a takeover war chest does not mean it has to spend it all at once.
Herding hedge funds may cause more wobbles 22 May 2006 Last week's steep stock market falls had less to do with fundamentals and more with hedge funds placing the same bet on low volatility. Central bankers are warning that many market bets may be predicated on benign markets. There may be more shakeouts if volatility rises.
Rosneft investors should demand a big discount 21 May 2006 The Russian oil group s IPO will highlight how much money the Kremlin made from the seizure of Yukos s assets. Russia showed scant regard for international investors interests then. Who can be sure it won't happen again?
NYSE may be nil-premium white knight 21 May 2006 The US exchange has positioned itself smartly for exchange consolidation. While its rival, Nasdaq, is paying out heaps of cash for LSE, it may get Euronext without paying a premium.
New housing futures contract faces dim prospect 19 May 2006 With US property prices vulnerable to a downturn it might seem a good time to launch a housing futures contract. Yet previous efforts to offer housing futures have floundered due to lack of liquidity.
MasterCard’s $2.5bn share sale looks risky 19 May 2006 The card network s IPO is priced at about 14 times earnings. At a discount to rivals, that seems cheap. But MasterCard faces challenges. It s losing market share, and is being sued over the fees it charges. This is not an IPO for the faint of heart.
Holders push Euronext against a wall 19 May 2006 The exchange is trying to drum up a bid from NYSE. But investors will force it into a Deutsche Boerse deal unless NYSE bids by next week. That's clearly in the interest of those that have shares in both Euronext and Deutsche Boerse. But not in the broader shareholder interest.