Phelps Dodge could turn from white knight to target 31 Jul 2006 The US copper miner s double bid for two Canadian nickel miners always looked ambitious. Last week it lost the race for Falconbridge. Now rival Teck Cominco has topped its bid for Inco. With a Mexican miner reportedly stalking, Phelps is looking more like a target.
Pearson still has bags of potential 31 Jul 2006 But Pearson can do a lot more. It has plenty of fat to cut and it might think about selling noncore assets like IDC. Everimproving results at the publishing group may reduce the pressure for the newish chairman, Glen Moreno, to crack the whip.
Share your housing gains with the bank 31 Jul 2006 That's not something the UK's bullish domestic property investors have been keen on doing in the past. But Morgan Stanley is trying again. Its shared appreciation mortgages are supposed to fight against expensive housing. But they exacerbate, not solve, the problem.
HSBC’s investment bank hasn’t proved itself yet 31 Jul 2006 The division had a solid first half with revenues up 25%. But it s far too early for the global bank to take its foot off the pedal. The improvement is patchy and is heavily dependent on trading. HSBC is still a fair weather investment bank.
ABN fails to exorcise its efficiency demons 31 Jul 2006 Rationalisation would make sense. ABN boss Groenink seems to be edging that way, with his comments about focusing on Italy. He should act. The Q2 results gave more fire to sceptics who see the Dutch bank as a group of subscale banks scattered round the globe. Costs remain high.
Second battle looms for Inco 28 Jul 2006 The Canadian miner withdrew gracefully from the battle for Falconbridge after investors rejected its bid. Now Inco faces another battle cementing a contentious merger with Phelps Dodge while facing a potential new hostile bid from Teck Cominco.
Aetna pummelled by fears of spiralling costs 28 Jul 2006 The US health insurer beat secondquarter estimates. Yet shareholders sent the stock crashing. Aetna s healthcare bills rose faster than premiums again. Investors are concerned healthcare inflation will rise out of control.
General Electric should let NBC Universal spread its wings 28 Jul 2006 Diversification has long been one of General Electric s greatest strengths. But NBC Universal, its television and film business, is an especially odd fit and a prime candidate for a spinoff.
Now everyone can play in credit derivatives 28 Jul 2006 A new product from JP Morgan has opened up the world of credit derivatives to all fund managers, even if they re not credit specialists. But the exoticallynamed iTraxx Total Return Swaps is no capitalprotected investment. It has big risks. Investors need to be careful.
Nymex rushes to cash out 28 Jul 2006 The largest US energy exchange says it wants to go public, making it the last of the major markets to do so. But Nymex's internal valuation suggests it will sell stock at a higher premium than it deserves given burgeoning competition.
Wal-Mart admits defeat in German trolley wars 28 Jul 2006 The retail giant failed to make the grade in Germany, thanks in part to savage competition and an inability to exploit its buying power. But the real killer? Its lowprice strategy wasn't a differentiating factor in a country already stuffed with lowcost stores.
HCA illustrates LBO land’s maturity 28 Jul 2006 While it may look like a record deal, in so many respects this is a sober one compared to KKR s 1989 buyout of RJR. The firms are committing double the equity, and the size of the bets relative to their funds is fractional compared to RJR.
Under Cox, SEC shows restraint 28 Jul 2006 New pay rules unveiled this week confirm the new SEC chairman favours disclosure over directives. Although Cox faces political pressure to do so, he has thus far avoided excessive regulation.
Ghosn may have over-reached with GM 28 Jul 2006 The Brazilianborn boss of Renault and Nissan was clearly tempted by the idea of adding another steering wheel to his collection. But with GM's boss unkeen, and both Renault and Nissan needing work, this was probably a dream too far.
Jabre’s gamble goes spectacularly wrong 28 Jul 2006 The star hedge fund manager hoped that appealing his fine for market abuse would pave the way for a deal with Financial Services Authority. But this was a dangerous game of double or quits. Unfortunately for Jabre, the fine remains and he s now unlikely to work in the City again.
Central banks fear instability more than inflation 27 Jul 2006 If Bernanke, Trichet and Co. were most worried about inflation, they d be squeezing harder. Growth is strong and prices are rising. But higher rates could threaten financial stability in a world that is risky and highly geared. No one wants another LTCM.
Options scandals could spur tech M&A 27 Jul 2006 There s solid financial logic for mergers among enterprise software companies. The ongoing options mess could put more into play. Look at HP s successful $4.5bn bid for Mercury Interactive. It was a sitting duck after scandal cost the group its CEO and stock premium.
Why firms should be wary of hedging 27 Jul 2006 It s tough being the loser in a zerosum game. Ask Phelps Dodge. The US miner has had to take a $1.1bn charge on a copper hedging programme. For a producer like Phelps, it s only lost profits not cash losses. But there s a serious lesson: risk reduction is a risky business.
Halliburton stock looks cheap 27 Jul 2006 The $33bn US oil services giant last week scuttled IPO plans for its beleaguered construction group, KBR, citing weak demand. Spinning off KBR could help Halliburton shed its image problems and free KBR to transform its business. There's 25% upside to be had.
Credit Agricole made to pay up for Emporiki 27 Jul 2006 The French bank s raised bid has earned it the backing of the Greek government, putting it in on course to scoop the E3bn deal. But the sweetened terms leave Credit Agricole looking generous. That may haunt the bank next time it opens its cheque book.
Tronchetti holds banks to Pirelli Tyre IPO price 27 Jul 2006 In selling 39% of the tyre subsidiary for E1.9bn, Pirelli s boss has negotiated a price at the bottom of the range of its pulled flotation. The banks look generous, given falls in other tyre companies. Investors may question what the banks are getting in return.
Kingfisher needs more than a paint job 27 Jul 2006 Sure, the UK DIY group's Q2 trading statement shows the business stabilising, with sales up, gross margins flat, and Asia growing at speed. But don't be fooled. The UK business faces real structural challenges and it's not clear Kingfisher has the answer.
Phelps’ Inco bid looks worse without Falconbridge 26 Jul 2006 The US copper firm's double whammy bid for the nickel miners needed the synergies between the two Canadians to make the numbers work. But Xstrata now looks set to win Falconbridge. That leaves Phelps' Incoonly offer underwater.
How Ferrovial squared the circle 26 Jul 2006 The answer is an unusual financing technique used by UK water companies. But for this to work, existing BAA bondholders must buy in. The mystery was always how Ferrovial could borrow £12bn equivalent to three times leverage and keep BAA's credit rating.
World still awash with money 26 Jul 2006 Central banks have tightened, but not enough to slow down lending. Credit is growing faster than GDP, and the gap is widening. That helps explain high asset prices. But a real liquidity squeeze would be painful. Will central banks have the courage to act?
Special items flatter General Motors’ results 26 Jul 2006 The US car company s $1.2bn of net operating income in the second quarter was a rare pleasant surprise for shareholders. True, GM is showing progress on cutting costs. But the company had to rely on some accounting tricks to prop up earnings.
The biggest risk in HCA deal is political 25 Jul 2006 Government intervention in healthcare could play havoc with the fine financial calculations underlying the hospital group's buyout. HCA's close to ties to the Senate's majority leader Bill Frist have helped in the past. But they could turn counterproductive.
Amazon disappoints investors in 2Q 25 Jul 2006 Sales at Amazon continued to grow at a doubledigit pace, propelled by free shipping and further diversification in the products it sells. But profits plunged, sending its stock price down more than 12% in afterhours trading. The model Jeff Bezos built looks broken.
3G switch could hit Qualcomm 25 Jul 2006 Investors in the $60bn mobile phone company are betting it can collect substantial royalty payments on 3G phones. Problem is, the group may not be able to collect as much as investors seem to think.
E.on to get a rough ride in Spain 25 Jul 2006 The speculation in Madrid is deafening. It seems the German power group is going to have tough time getting its bid for Endesa through. It's hard to see how the regulator could justify imposing tough conditions. But it leaves E.on with a difficult dilemma.