VW pushes its luck over MAN-Scania 26 Sep 2006 The German auto group has set out a wishlist of what it wants from a combination between the two truck makers. But it will have to compromise. Otherwise, there won t be a deal at all. And that wouldn t be good for VW either.
Amaranth isn’t dead – yet 26 Sep 2006 Amaranth founder Nick Maounis says he plans to stay in business after his funds racked up $6bn in losses in naturalgas trades. If LongTerm Capital s history is any guide, it may not be as crazy as it sounds.
J&J wins by losing 26 Sep 2006 Boston Scientific beat J&J to the punch in the fight for Guidant. But it was no victory for Boston shareholders. And if J&J wins its $5.5bn suit against Boston, it might well be the most profitable deal that never happened.
Private equity gets stingy with IPOs 26 Sep 2006 US financialsponsor backed deals have performed poorly in the aftermarket. Warner Chilcott is the latest example. Private equity firms need to be more generous if they hope to exit the megabuyouts clogging up their pipelines.
Arcelor Mittal loses another round in E5bn Brazil fight 26 Sep 2006 The securities regulator has ruled that the steelmaker has to make a bid for the 33% minorities in Arcelor s Brazilian subsidiary. But the story is not yet over. Arcelor Mittal may yet wriggle out, and it could get away with a much lower offer.
Yahoo enforces Christmas cheer 26 Sep 2006 Just a week after disappointing investors, the internet conglomerate is requiring all employees to take a holiday in the last week of 2006 With this move it s hard to avoid the impression Yahoo is trying to kitchen sink what s already become its annus horribilis.
Tronchetti should quit Pirelli 26 Sep 2006 The Italian industrialist has already resigned as Telecom Italia s boss because of a fight with the government. Having lost E4.7bn for Pirelli investors on his disastrous TI adventure, Tronchetti doesn t belong there either.
No progress in China for Paulson 25 Sep 2006 The Treasury Secretary's trip to Beijing held the promise of economic reform. Atop the US wishlist list was flexible exchange rates. But Paulson came home emptyhanded, bearing only a promise for future talks. This won't stem protectionism at home.
UCB snaps up Schwarz in E4.4bn deal 25 Sep 2006 The race to consolidate is clearly on. The Belgian group is the third midsized European drugs group to buy a rival in the past week. What has unblocked the dam? It s that the sellers have all dropped their prices, perhaps because they are scared of being left on the shelf.
Hewlett-Packard magnifies its errors 25 Sep 2006 Patricia Dunn s exit is a good thing. Mark Hurd s ascension to the chairman s seat, though, creates undue business risk. Sure, Dunn screwed things up. But there was some sense in her hanging around to clear up the mess. Now Hurd has been sucked in too.
Icap pulls out of LSE talks 25 Sep 2006 The news makes it harder for the LSE to fight a Nasdaq bid. It s hard to argue for a standalone future when you ve been seeking suitors. Without an alternative partner, the LSE can only argue that Nasdaq is undervaluing it. But Icap has undermined that case too.
TI must act decisively over espionage scandal 25 Sep 2006 Allegations of a vast, illegal spying operation threaten to engulf the company, which has already been destabilised by a political battle. The CEO s position is tricky: either he knew what was up; or didn t and looks incompetent. The new chairman must clarify things rapidly.
Inverted yield curve’s signals look – back to front 25 Sep 2006 When US interest rates are higher for shortterm than longterm debt, a recession is usually in sight. This time it looks different. The Fed has paused. And low longterm rates could get the housing boom going again. That would postpone recession, not bring it on.
There’s no such thing as a free option 24 Sep 2006 Doughty Hanson is paying the E30m IPO fees for its new buyout fund. It hopes to stop the shares from declining in the aftermarket. That has happened to other listed buyout vehicles. However, Doughty is receiving a valuable option in exchange.
LSE needs an unconventional defence 24 Sep 2006 The UK exchange is unlikely to fend off Nasdaq by doing a buyout or a defensive merger two options it s reportedly looking at. One way would be for a strategic investor to take a big stake in the LSE. But that would be hard to pull off.
Was the energy trading market manipulated? 22 Sep 2006 It s not clear. But a curious and consistent trading pattern has been evident in the US natural gas futures market in recent months. This could have provided an opportunity for traders to profit. However, the pattern changed suddenly before Amaranth s collapse.
Stock options incentivise the dead 22 Sep 2006 Things only get exciting when we depart this life. There are so many opportunities. You can win medals, or get elected to the US Senate. You can even get married (in France). Cablevision has added to the fun. It s given backdated stock options to a dead man.
FSA rightly cracks down on hedge funds side-deals 22 Sep 2006 The UK regulator is to force hedge funds to disclose any preferential treatment given to certain clients to all their investors. That s a no brainer. Giving some investors rights that will be detrimental to others is bad enough. Hiding it is even worse.
Poland joins the club of failing coalitions 22 Sep 2006 The fragile government has fallen, because the extremist party couldn t be kept in line. That could be good for the country eventually. But the European pattern is disturbing. Recent events in Hungary and Italy highlight the growing problem of weak governments.
Metrovacesa bid battle turns into Mexican standoff 22 Sep 2006 Neither side gained the decisive victory it wanted. The result is an impasse and, oddly, a rocketing share price. The gains seem built on hopes one bidder will eventually launch a full takeover offer. Perhaps. But the stock is already very expensive.
Dutch government offloads KPN stake for E1.7bn 22 Sep 2006 Goldman Sachs and Citigroup picked up the Dutch telecom operator's shares in an auction last night at or near to yesterday's closing price. But that's not quite as big a gamble as it looks since KPN itself will buy half of the 8% stake.
Leveraged buyouts get less leverage 22 Sep 2006 This is a consequence of private equity chasing assets with less dependable cash flows. Lenders are understandably balking. The $17.6bn Freescale LBO highlights the point. But as equity cheques expand in LBOs, returns are likely to suffer.
The brakes are off in internet M&A 22 Sep 2006 It used to be that the surest way for a chief executive to lose his job was to do a lousy acquisition or two. Viacom s sacking of its boss for not acquiring dodgy internet companies has shifted the paradigm. Facebook is the evidence.
Branson gains fantastic publicity from $3bn green investment 22 Sep 2006 One has to pinch oneself to remember that the Virgin boss is the same man who runs airlines and only last year wanted to build refineries. But, if the world is to stop global warming, new industries like biofuels will form. The entrepreneurs backing them may make lots of money.
Amaranth embarrasses funds-of-funds 22 Sep 2006 Several bigname funds offunds were invested in the stricken hedge fund. However, it s not their lack of due diligence which is to blame. Rather, lockups and poor disclosure appear to be the root of the problem. Managedaccounts offer an alternative.
Bristol-Myers investors must wait for saviour 22 Sep 2006 Investors in the US drug group have spent the last ten years wandering in a desert of poor returns. Now a takeover bid beckons. However, a lingering patent dispute and continuing government supervision of Bristol mean any bid is unlikely to emerge before June.
Merck will struggle to excite with E11bn Serono buy 21 Sep 2006 The German drugs and chemicals firm tried but failed to buy Schering this year. Its second choice, Serono, looks second rate. The Swiss firm relies on a handful of drugs and has been on the market for almost a year after other firms walked away.
Aircraft leasers hit the eject button 21 Sep 2006 The airline leasing business is booming. One operator, Q Aviation, has put itself up for sale and another has floated on the stock market. Q Aviation s owners, who bought at the bottom of the cycle, have done well. But the good times can t last forever.
Yahoo and Facebook are a perfect match 21 Sep 2006 Yet, as the best strategic fit, Yahoo can afford to pay more for Facebook than its competitors. The portal may buy Facebook after its own social networking effort failed. The question of valuation, however, remains to be determined.
Hedge funds to tap wisdom of crowds 21 Sep 2006 Are 40m internet users smarter than the best financial minds? That s the idea behind a new trawl product for hedge funds. But the journey from brilliance to madness can be short. If too many managers follow the trend, crowd wisdom could become the next bubble.