Ford’s dual-class share scheme stymies recovery 30 Jun 2006 The Ford family controls 40% of the votes yet owns just 4% of the stock. This insulates management from shareholder pressure. General Motors boss has no such shield, and has been more aggressive with its cutbacks. Ford s structure may hamper its turnaround.
BP mulls buying Rosneft stake – exclusive 30 Jun 2006 At first glance it doesn t make sense. Why would the UK firm use its capital to buy a minority stake in an overpriced and controversial IPO? The answer is simple. It would be buying an insurance policy for its existing Russian assets.
Arcelor’s Severstal merger voted down by slim margin 30 Jun 2006 96% of EGM attendees voted against the deal. But that only amounted to 58% of total capital not that much above the 50% minimum required. This was only achieved after a shareholder rebellion and change in the board's recommendation. That shows how undemocratic the process was.
Blackstone gets bargain in $4.3bn Travelport deal 30 Jun 2006 The private equity firm is acquiring Cendant s travel business for just under 8 times forecast ebitda. This may be inline with expectations. But it looks cheap when compared to the prices Cendant paid over the years to create Travelport through acquisitions.
Will commodities M&A boom end like dotcom one? 30 Jun 2006 Companies like Phelps and Anadarko are making huge bets by financing takeovers with heaps of debt at the commodities peak. The buyers are hedging their bets. And they are buying real assets with synergies to reap. But it still looks like boomtime behaviour.
What’s the best way to beat an activist? 30 Jun 2006 Time Warner management took the high ground against Carl Icahn and ultimately won, though shareholders might beg to differ. Heinz is taking a different approach and going for the jugular in its battle with Nelson Peltz. These tactics could backfire.
Google payments plan carries new risk 30 Jun 2006 But the arrangement could spark antitrust scrutiny if Google is accused by competitors of unfair business practices. By linking payment processing to ad spending, Google Checkout gives merchants enticing incentives to hawk their wares on the search engine.
General Motors-Renault deal would be risky 30 Jun 2006 Attempts to replicate the RenaultNissan partnership of 1999 have failed. Just look at GMFiat or DaimlerMitsubishi. Carlos Ghosn's success with Nissan should give him an edge in making a GM alliance possible, but it won't be easy.
Bank of England has hiring problems 30 Jun 2006 The Monetary Policy Committee is two members short, and its latest recruit isn t exactly top drawer. The UK chancellor makes the appointments. Brown may not be doing all he could. But the job isn t all that attractive.
Siemens/Bayer embody new spirit of German reform 30 Jun 2006 It s not just the German football team that is enthusiastically embracing reform. So too are some of Germany s stodgiest companies. The E4.2bn sale of Bayer s diagnostics unit to Siemens brings focus to both sides and helps them to play to their strengths. It s a winwin.
BP trips up in the US – again 29 Jun 2006 The Texas refinery explosion, leaks from BP s Alaska pipeline and now charges that the oil giant manipulated the propane market. There is no simple reason for BP s long list of US problems. But the appointment of a new boss there shows BP is serious about fixing it.
3G patent fight could kill off smaller handset makers 29 Jun 2006 A multibillion dollar row over 3G phones has broken out. Nokia s withdrawal from making CDMA phones show the patent battle is intensifying. While it is unclear who will win, those handset makers with small patent estates look like clear losers.
Pirelli Tyre IPO shows beggars can’t be choosers 29 Jun 2006 Owner Marco Tronchetti Provera needs E1.6bn to pay off banks and investors who helped him out after his splurge on Telecom Italia. Pirelli Tyre won t raise anywhere near that on its own. Besides, it only starts to look cheap a full 10% below the bottom of the range. Owner Marco Tronchetti Provera needs E1.5bn to pay off banks and investors who helped him out after his splurge on Telecom Italia.
EMI rightly rejects Warner pacman 28 Jun 2006 Warner's offer for EMI is less generous than EMI's offer for Warner. What's debatable is if shareholders are better off buying or selling. Ultimately, some deal is likely to emerge from this complex tangle. What about exploring again a mix of cash and shares?
Univision sets new leverage record 28 Jun 2006 Not only are the winning bidders writing one of the largest LBO equity cheques. They're also piling on debt at a whopping 12.3 times ebitda. That was too high for some other privateequity firms. The $13.7bn Univision sale may signal the high water mark for this LBO cycle.
Eurotunnel uses questionable tactic 28 Jun 2006 The company has asked regulators to examine the actions of junior creditors who have come up with a rival restructuring plan. Eurotunnel may hope this will pressurise bondholders into negotiations. But it doesn t seem like the creditors have done anything wrong.
Buyout firms hit jackpot with $1bn Hertz dividend deal 28 Jun 2006 In little more than six months privateequity sponsors have taken out almost half their investment in the $14bn buyout. Dividend deals like this encourage LBO firms to keep on bidding high right up to the end of the game.
Suez/GdF merger comes back from the dead 28 Jun 2006 The French cabinet s confirmation it will push ahead with the privatisation of GdF after the summer makes the deal much more likely. But two big obstacles remain: EU clearance and a renegotiation of the terms. Suez may yet be able to swing both in its favour.
Colaninno braves bumpy market with Piaggio float 28 Jun 2006 The Italian financier is floating his scooter and motorbike maker for E1bn, just when the capital markets are at their toughest. The price range looks racy. But Colaninno won t mind at the midpoint, his E243m investment has turned into almost E600m of value.
Goldman’s Eurotunnel plan isn’t greedy 28 Jun 2006 The investment bank and its partners are paying a reasonable price for the tunnel owner. It won t be easy to get a good return. Some investors are unhappy. But they would have more credibility if they explained their plan and said if they would put up more cash.
Barr’s $2.2bn purchase of Pliva makes sense 27 Jun 2006 The US generic drug maker fought off several competitors to buy the Eastern European firm. Contested auctions are normally bad news for bidders. But Pliva s expertise in making generic biotech drugs may mean Barr got a bargain.
GM still hasn’t escaped bankruptcy 27 Jun 2006 The carmaker is chipping away at its problems and credit default markets judge the US carmaker no more likely than Ford to go belly up. Convincing 35,000 workers to buyouts is a huge feat. But even with all this good news, there s still a $19bn hole in its balance sheet.
Stalled IPO market points to upswing in M&A 27 Jun 2006 The IPO markets may be effectively closed to anything risky, with record numbers of deals being pulled. But the M&A market remains buoyant. This situation looks likely to persist at least until after the summer. In the meantime, expect more dual track processes to end in a sale.
Rosneft pushes investor appetite for risk to the limit 27 Jun 2006 Investors beware. The Russian oil company s prospectus has 25 pages of reasons not to buy the company. Some are more worrying than others. But at the heart is whether investors are willing to take a punt on the Russian state.
Buffett won’t let go of his baby 27 Jun 2006 The renowned investor has structured the world s largest charitable gift so as not to change the status quo at Berkshire Hathaway. But that may not be in the best interest of the Gates foundation nor of Berkshire s shareholders.
Buffett pledges biggest philanthropic gift ever 26 Jun 2006 The world s secondrichest man will hand over some $37bn of Berkshire Hathaway stock the bulk of it to Bill Gates foundation. At a time when so many pigs have their snouts in the corporate trough, it is heartening to see US capitalism s gods give it all away.
Kraft cleans house ahead of spin-off 26 Jun 2006 The food group ousted its CEO, signaling its impending spinoff from parent Altria could be just around the corner. By luring back Irene Rosenfeld Altria hopes to bring in a little Pepsi fizz. That won t be easy to accomplish, however.
European hybrids could be past their sell-by date 26 Jun 2006 Riskaverse investors have been dumping the once popular hybrid bonds, causing prices to fall off a cliff. That doesn't bode well for companies planning to use them for financing. It is also a sign that leverage levels in M&A may have peaked.
Rosneft plays hardball with $60bn IPO 26 Jun 2006 The Russian oil company isn t bending the knee to Western investors by offering its stock at a discount. In fact, it's asking for a premium. The reason? It has Asian strategic partners who it thinks will buy shares. That strengthens Rosneft s hand. But institutions should be wary.
Phelps Dodge’s $40bn Inco pounce looks risky 26 Jun 2006 On paper, acting as the white knight for Inco and Falconbridge adds up. The present value of synergies is some $1bn above the premiums. But the risks are legion: execution, financial and competitive. No wonder Phelps shareholders are panicking.