Aviva looks to US for growth 7 Jul 2006 Since its failed bid for Prudential, it has been clear Aviva needed a deal to spur growth. But its $3bn approach for AmerUs is uninspiring. It looks like an itsybitsy deal not a transforming move. And it could be costly if competition emerges.
Goldman’s private equity boss retires hurt 7 Jul 2006 Sharp s decision to stand down is understandable, given his reluctance to commit to a new fund for another five years. But he was also the main target of the recent spank from Hank and may not have enjoyed having his wings clipped.
Amazon grocery drive won’t fatten margins 7 Jul 2006 The internet giant has fed the minds of its customers with books. This month it began filling their stomachs by selling food items in bulk. But becoming an internet Costco is a recipe for pain unless it mimics Costco s success with membership fees. There's no sign of that yet.
Altria’s easy money already made 7 Jul 2006 The benefits of a breakup of the tobacco group following the resolution of litigation are mostly reflected in the stock price. Returns now depend on the individual parts Kraft, Philip Morris and international getting their acts together.
GM’s directors should oversee alliance talks 7 Jul 2006 They ve rightly agreed to explore a tieup with NissanRenault and put CEO Rick Wagoner in charge of the discussions. He may feel threatened by Carlos Ghosn. To safeguard shareholder interests, the board should appoint one of its own to oversee proceedings.
Mexico’s prospects won’t improve with conservative victory. 7 Jul 2006 The markets clearly prefer centreright candidate Felipe Calderon. But he s sticking to Fox s failed policies and productivityimproving privatizations are not on the agenda.
Europe goes green on aviation taxes 7 Jul 2006 International treaties have defeated past attempts to tax airlines. The EU may have found a way round. But don t expect airlines to give up without a fight.
LCH.Clearnet victim of hopeless governance 6 Jul 2006 In terms of botched and dysfunctional corporate governance, the clearinghouse takes some beating. It s CEO and Chairman have now been forced out by executive directors. This just underlies the importance of independent directors.
Turkey not out of the woods yet 6 Jul 2006 Higher interest rates have helped the currency and the stock market recover some ground after their recent 30% falls. But that still leaves the economy vulnerable to higher inflation and slower growth. Turkey should have gone further when it could.
Renault alliance with GM doesn’t add much value 6 Jul 2006 Renault CEO, Carlos Ghosn, might be the best person to turn around GM. And folding GM into a NissanRenault alliance would release savings. But these are not enough to justify a big investment in GM. This would turn Renault into more of an investment trust than it already is.
Insiders keep selling at Partygaming 6 Jul 2006 The list of excuses from the online gaming group portfolio diversification, tax bills, not wanting to move to Gibraltar lengthens. The shares are supposedly undervalued and certainly below where they were at the IPO. This can only widen Partygaming s discount.
Sudden death seals Enron founder’s legacy 5 Jul 2006 With no chance of appeal or future redemptive acts of charity, his reputation as the tech bubble s bad boy seems assured. Ken Lay has died from a suspected heart attack only weeks after his conviction for fraud.
Hedge fund poachers recommend fewer gamekeepers 5 Jul 2006 That s the best summary of an EU expert group report on the sector. It dismisses all fears and accepts all industry propaganda. That s not surprising, considering it s a report from the industry. But it s not a helpful starting point for regulation.
Credit Agricole withdrawal leaves A&L on the shelf 5 Jul 2006 The French bank is right to scrap plans to buy the UK mortgage lender. It would have paid a rich price for a weak bank in a fierce market. This should help Credit Agricole get investors onside. But without an obvious suitor, A&L may struggle to hold on to much of its premium.
Money no object for Middle Eastern mobile bidders 5 Jul 2006 Etisalat, the UAE mobile operator, is paying an eyewatering $2.9bn for Egypt s third mobile licence that s five times fair value. The deal is near impossible to justify on economic grounds. But it s by accepting low returns that Middle Eastern bidders have won auctions.
Permira joins buyout majors with E10bn mega-fund 4 Jul 2006 What's the advantage of size? You get to go after bigger deals for sure. But it also reduces the need to join consortiums. That may be an advantage both tactically and for investors.
Standard Life needs to kick mutual habit 4 Jul 2006 The Edinburghbased insurer has become more rational about how it allocates its capital. But its cost base is still too high. This has cost its policyholders. That leaves some upside for incoming investors, if they can persuade management to change.
Jilted Millicom is a victim of emerging markets shake-out 4 Jul 2006 China Mobile s $5.5bn bid for the emerging market telecom group looked rich even before the recent falls in emerging markets. But its decision to pull out leaves Millicom isolated and reinforces the view that Chinese companies are flaky when it comes to deals.
German recovery saps appetite for reform 4 Jul 2006 Growth is up and unemployment is down. Add in a good World Cup performance, and the country s economic crisis seems almost over. That may be true for corporate profits. But the government is not doing its part. The grand coalition is moving forward at a snail s pace.
Why is it so hard to make stub equity work? 4 Jul 2006 BAA investors have rejected stub equity offered by the Ferrovial consortium, even though they had asked for it in the first place. Why? The answer is that this odd, hybrid paper isn t particularly attractive.
Wellcome Trust taps exuberant credit markets 3 Jul 2006 The £12bn UK charity is borrowing £500m at ultralow rates for 30 years and using the proceeds for investment. Loose credit markets make this a smart bit of arbitrage. Unfortunately, few other European charities are likely to follow.
Pirelli Tyre IPO latest to get run off the road 3 Jul 2006 The IPO market is tough and the tyre sector is tougher. That made the company s E2.1bn valuation a huge stretch. Even with E1.5bn of financial commitments to cover, there was a point below which owner Tronchetti wasn t prepared to go.
Airbus valuation inexplicably low 3 Jul 2006 An independent valuation of BAE s stake in the aircraft group has come in at least 20% lower than anyone expected. That raises questions about Airbus longterm profitability.
Forgeard’s departure doesn’t go far enough 3 Jul 2006 With Eads s controversial coboss out of the headlines, at least the aerospace giant can get back to business. But it s a shame that the Eads didn t go the whole hog and appoint just one chief executive.
BSkyB to enter broadband with a bang 2 Jul 2006 The UK payTV group s landgrab strategy looks right not least because otherwise rivals might find a way of invading its core market. But with so many other companies offering broadband at uneconomic prices, it is unclear whether Sky will be able to make money.