J&J pays whopping $16.6bn for Pfizer unit 26 Jun 2006 The US group is paying an eyewatering 25 times operating profits for Pfizer's consumer drugs division more than recent sector deals. J&J reckons it can deliver up to $600m of synergies. Those could be worth about $5.5bn not enough to justify this premium. J&J reckons it can deliver up to $600m in synergies. These could be worth up to $4.2bn not enough to justify the premium.
For Buffett, the taxman cometh not 26 Jun 2006 By holding onto his investments longterm, Buffett has avoided capital gains taxes. By giving away his wealth to charitable foundations, he will additionally avoid paying estate and gift taxes.
Mittal victory huge boost for shareholder power 25 Jun 2006 Threatened with disenfranchisement, the Arcelor shareholders pushed their board into talks and now can accept an extremely attractive offer. In future, it will be harder for European boards to use poison pills to frustrate hostile bids and deny their shareholders wishes.
Partygaming first birthday a subdued affair 25 Jun 2006 Investors certainly won't be celebrating. The online gaming giant's stock has fizzled since its IPO a year ago. That's not because of anything in the prospectus' 27page risk section, though more the result of a series of management blunders.
Hot infrastructure funds may deliver paltry rewards 25 Jun 2006 Infrastructure companies like AB Ports and BAA are boring and stable. Pay top dollar for them and it will be hard to produce juicy returns. Some funds may end up generating returns on investments that are not much better than quoted stocks but without the liquidity.
Is Eads’ loss really Boeing’s gain? 23 Jun 2006 Shares of the European owner of Airbus have plummeted amid production delays of its new aircraft, while Boeing has lifted. But this doesn t look justified. Woes at Airbus haven t made Boeing a cent. And it faces possible delays on its own new airplane projects.
Agfa’s three-way split is right response to digitisation 23 Jun 2006 The Belgian imaging group faces a challenge common to all analogue businesses: how to migrate to digital without destroying value. Its solution to spin its analogue businesses into a separate unit makes sense and could close Agfa's 50% sumofthe parts discount.
Goldman, Macquarie empty pockets for ABP 23 Jun 2006 That should be enough to outdo its rival. But Macquarie says it is not out of the race yet. Goldman Sachs has raised its offer by 8% to £2.8bn a jawdropping and nonbargain valuation of 17 times ebitda.
Calls for hedge fund regulation wrong-headed 23 Jun 2006 The Connecticut attorney general claims a probe into insider trading at Pequot Capital reinforces the case for more hedge fund oversight. But securities laws should be directed at actions not actors. And insidertrading is already wellcovered by existing laws.
Has Anadarko put itself in play? 23 Jun 2006 It s long been seen as a target for a Total or Shell. And the $23.3bn takeovers of KerrMcGee and Western highlight its low valuation. But they also artfully insulate Anadarko from a takeover. A buyer would have to bid for all three firms.
Google dodges trick clicks 23 Jun 2006 The search juggernaut has launched a new system for ad sales to deal with socalled click fraud. This looks like a defensive gesture. But if it allows Google to charge substantially more for advertising, it could be a big revenue booster.
Mordashov’s proposal contains worrying loophole 23 Jun 2006 The Russian s merger scheme with Arcelor could allow him to cut a sweetheart deal with a biggish shareholder like Zaleski. That could leave other shareholders out in the cold. If Arcelor s board is minded to stick with Mordashov, it must plug the loophole.
Arcelor board must demonstrate independence 22 Jun 2006 As the battle over the steel giant s future draws to an end, directors must assess dispassionately what is in shareholders best interests. The onus is on international figures, like E.on s Hartmann, to ensure that shareholder value drives the choice between Mittal and Severstal.
BAA bondholders may skewer Ferrovial 22 Jun 2006 The Spanish group may have to buy back some of BAA's bonds at a fat premium because of the leverage it plans to load on the UK group. It is sometimes possible to negotiate around such clauses. But Ferrovial s highly geared bid makes bondholders likely to press for an exit.
DKW restructures, drops Wasserstein name 22 Jun 2006 The investment bank s boss, Stefan Jentzsch, has finally been allowed to make reforms one of his predecessors mulled over four years ago. The result is that DKW becomes more viable as an entity. But it s not clear whether it has the critical mass to flourish.
Bond investors claw back some power 22 Jun 2006 Judging by recent bond issues by Saint Gobain and Bayer, bond investors are becoming more risk averse and more demanding. That said, issuers still have the whip hand. There s still a lot of liquidity sloshing around and pricing remains tight for now.
Eads shareholder pact should be scrapped 22 Jun 2006 The shareholder pact that controls Eads is an anomaly that serves nobody s interests. The French government is right to demand reform. But the reform that s needed is not the sort France has in mind. The key is greater shareholder democracy not more French influence.
Eads needs to rethink structure 21 Jun 2006 The aerospace giant s intensely political codecision making process didn t necessarily cause the problems with the A380. But the crisis has exposed its shortcomings. Talk of changing the shareholder and management structure is right on the money.
Ford Motor hit by rising funding costs 21 Jun 2006 First, Ford s finance unit paid a coupon of more than 10% for an unsecured bond. Now it's giving investors in an ABS deal extra protection. Such costs drove GM to sell GMAC. Ford insists it won t follow its rival s lead. For the time being at least, it can afford not to.
Morgan Stanley’s gap to Goldman widens 21 Jun 2006 While it improved its position in advisory and equities, Goldman s stunning fixedincome trading machine has kept it leaps ahead. The firm s core investment banking business made strides in the Q2 to narrow the revenue gap with its chief rival.
Ahold split would unlock value 21 Jun 2006 The sprawling retailer s performance is patchy, and its strategy unconvincing. No wonder hedge funds are starting to move in. With its 25% sumoftheparts discount, Ahold is a prime candidate for a breakup. Trouble is, its management seems not to agree.
Clayton Dubilier’s beauty deal uglier than it looks 20 Jun 2006 The LBO firm s purchase of US retailer Sally Beauty at first blush looks out of character for the turnaround specialist. It s taking a minority of a public firm and keeping management. Nothing novel about that. But to make money, Sally needs a makeover.
KKR forced to cut German crane IPO price 20 Jun 2006 The private equity group has slashed the offer price of Demag Cranes by about 30% to E22 per share and cut the size of the deal. The flotation is the latest victim of the recent market volatility. But at this price, KKR should have little trouble getting it away.
Arcelor retreat raises hopes of a fair fight 20 Jun 2006 With the board talking to both sides, a shareholderfriendly outcome is now possible. But investors mustn't drop their guard. The French steelmaker had to cancel its share buyback vote or face a heavy defeat. That suggests shareholders are now calling the shots.
Are zombie equities a new asset class? 20 Jun 2006 Traders disappointed by the measly returns on distressed debt have started snatching up bankrupt companies shares instead. The returns can be phenomenal. But the risks are much higher. Shareholders in bankrupt firms usually walk away with nothing.
NYSE makes an odd case for buying Euronext 20 Jun 2006 The US exchanges's top brass are supposed to be selling the deal. But recent comments suggest they aren't sure what the benefits really are. Maybe there's some Machiavellian scheme behind it. But the message for NYSE shareholders seems to be lots of risk with little compensation.
Matalan LBO would be hard to swing 20 Jun 2006 A private equity bid for the UK value retailer would be difficult to square. Trading is dire, and there s little room for gearing. The best chance is for chairman John Hargreaves to launch a solo bid. But he might find it tough to offer a decent premium.
Veolia’s Vinci approach misconceived from start to finish 19 Jun 2006 An "acquisition risk" discount may now be baked into the price. As for Vinci, the construction and tollroad operator looks more vulnerable. Investors are left wondering whether the French water utility needs to do a deal and if the next one will be as unappealing as the last.
Goldman chooses right structure at the top 19 Jun 2006 The naming of Jon Winkelried and Gary Cohn as copresidents may cause some collateral damage among other pretenders to the throne. But the alternative, creating an executive committee, would have created a succession and authority fudge when Goldman most needs clarity.
Energy giants place different bets on oil’s future 19 Jun 2006 The investment decisions of the oil majors vary with their judgement on the outcome of the energy boom. BP has taken a bearish view while ConocoPhillips believes high prices are here to stay.