Morgan Stanley’s FrontPoint deal looks good 31 Oct 2006 On the face of it, not binding in the hedge fund s two founders might seem like trouble. But that s not entirely fair. For a relatively good price, it gets $5.5bn of assets and, more importantly, an infrastructure on which to grow its hedge fund business. On the face of it, not binding in the hedge fund s two founders might seem like trouble. But for a relatively good price, it gets $5.5bn of assets and, more importantly, an infrastructure on which to grow its hedge fund business.
Brazil’s risks include a bad example next door 31 Oct 2006 If Lula pursues a sloppy fiscal policy and interest rates rise the country could get into trouble fast. Then the Argentine solution of defaultandbehappy may look attractive. But it could work less well for Brazil.
UBS makes a weak quarter worse 31 Oct 2006 The Swiss bank can blame only some of its Q3 profit fall on weak conditions. Rising costs and a bad interest rate bet were also at fault. UBS s expensive new hires may yet bring home the bacon. But until they do, the bank s premium to peers may be under threat.
Why it pays to go carbon neutral 31 Oct 2006 Billionaires and companies alike are falling over themselves to cut down carbon emissions and go carbon neutral. It s hard to see some of these gestures making a meaningful dent on climate change. But the publicity can t hurt.
Don’t count out Airbus and Sony yet 31 Oct 2006 Airplanes and videogame consoles seem to have little in common. But both require producers to make periodic bets of staggering magnitude. The market is gambling that Airbus A380 and Sony s PlayStation 3 will be flops. It s far too early to tell.
Warburg Pincus taps strong demand for property 30 Oct 2006 The US private equity group's $1.2bn global real estate fund is its first dedicated property fund,reflecting demand for alternative assets. Investors want exposure to fastgrowing Asia, which could make up 50% of the fund. But emerging markets carry higher risks.
Does climate change excuse bigger government? 30 Oct 2006 The UK s Stern Review says it does. New policy and taxes will be needed to meet the greatest market failure the world has ever seen . If the numbers can be trusted, the payoff is an excellent five toone. But there are some hidden risks to so big an economic shift.
Online gaming M&A talks bear whiff of desperation 30 Oct 2006 Since the US nixed online gambling, sector consolidation is no longer a case of empirebuilding, but of cutting costs to stay in the game. Take a mooted tieup between Partygaming and 888. A month ago such a deal would have created a £5bn giant. Now it s worth just £1.6bn.
Morgan Stanley dips toe in with Avenue Capital 30 Oct 2006 It s spending some $280m for a fifth of the distresseddebt trader, or about 12% of assets under management. That s not crazy. But it s only a minority. The expected takeover of FrontPoint will better indicate whether Morgan s overpaying in its hedge fund drive.
Yahoo vulnerable to takeover 30 Oct 2006 If the internet portal doesn't do a better job of turning traffic into profits, Rupert Murdoch or some other predator might do it for them. As a preemptive move, Yahoo might be tempted to buy AOL's online business for more than $10bn. But this seems unlikely.
Wal-Mart shouldn’t sell skinny jeans 30 Oct 2006 Several big box retailers like WalMart and Home Depot have simply grown larger than their customer base. Returns on investment are falling. Both are responding with risky moves into new markets. McDonalds offers a good example of diversifying without alienating customers.
Severstal’s low float range shows investors remain wary 30 Oct 2006 The Russian steelmaker has set its sights low. Even at the top of the range, its global offering gives it only a small premium to peers. It looks like Severstal hasn t convinced investors it deserves better. Until it sorts out its governance problems, they may remain wary.
Schneider’s $6.1bn APC acquisition pricey but worthy 30 Oct 2006 But APC is growing fast and Schneider is promising significant synergies. This could prove a gutsy deal. The French electrical equipment company values APC at 35 times earnings. This is expensive for a company with declining margins.
Suez and GdF concoct management fudge 30 Oct 2006 After weeks of feuding, the companies say their management will be equally split between Suez and GdF executives. This is unlikely to work. It will make delivering synergies more difficult. But it gives Suez shareholders a chance at better financial terms.
Treasury scandal rears its ugly head 30 Oct 2006 Credit Suisse and UBS are just the latest in a long line of investment banks to face probes of manipulating US government bonds. Trading rules in this commoditised market may be fuzzy at times. But the penalties for bending them aren t. Ask Citi or Goldman.
Yahoo vulnerable to takeover 30 Oct 2006 If the internet portal doesn't do a better job of turning traffic into profits, Rupert Murdoch or some other predator might do it for them. As a preemptive move, Yahoo might be tempted to buy AOL's online business for more than $10bn. But this seems unlikely.
DBS merger tempting but tricky for StanChart 29 Oct 2006 A tieup between the UKbased bank and its Singaporean rival could make financial sense. It would create a $56bn emerging market giant. But there would be drawbacks. The deal might turn StanChart into a "Singaporean" bank. That could make it harder to expand further in Asia.
Aer Lingus bid turns into slanging match over O’Leary’s bounty 27 Oct 2006 The Ryanair boss had claimed Aer Lingus employees would get E60k each if they accepted his bid. The real figure may be almost half that. That s very embarrassing as O Leary needs employee support to win the bid battle. To make good his promise will cost him dear.
Peugeot needs new CEO – now 27 Oct 2006 The French car company can t seem to shake off the doldrums. It just issued another profit warning. The current CEO is a lame duck, and search for a new one is dragging on. But Peugeot can t afford to wait. The French car company can t seem to escape the doldrums. It just issued another profit warning.
Investors shower Latin blue chips with liquidity 27 Oct 2006 That s how the likes of Cemex, now buying Rinker, and CVRD are able to splash out billions to expand abroad with big cash bids. Oddly, investors seem unconcerned that they are trading emerging market risk for another variety, such as mining or US housing.
Time Warner should put flesh on its bones 27 Oct 2006 The media group s shares have rallied 25% since midAugust on hopes boss Parsons will unravel the conglomerate. That s kept the wolves at bay. To keep them there, Parsons should next week give details on cable and AOL spinoffs and succession.
ICBC float shows rise of Shanghai 27 Oct 2006 The Chinese bank which has launched a blockbuster $20bn offering is the first bank to float simultaneously in Hong Kong and Shanghai. Hong Kong has done hugely well out of the China boom, raising more IPO money even than London this year. But Shanghai may yet eclipse it.
Clear Channel should consider a recap 27 Oct 2006 A leveraged buyout isn t going to benefit the Mays family, who spent their lives building the radio company from scratch. Perhaps they should try a leveraged share buyback. That could boost their stake and the stock price, and avoid a buyout.
Dr. Z should jettison Chrysler 27 Oct 2006 Daimler s boss has a soft spot for the US car business. But shareholders have already given up on the German car company s empire building. Bought for $46bn, Chrysler s now worth nothing and is undermining parent Daimler s value. CEO Zetsche should drive away from this failure.
Citi’s Prince should step up dealmaking 27 Oct 2006 But that doesn t necessarily mean he should go on an acquisition spree to remedy the group s slow growth and lagging stock price. If rival banks are too expensive, the logical thing for Citi to do is not to keep buying but to sell assets to the market through spinoffs.
Goldman’s brand worth billions in China 27 Oct 2006 In six months, the firm s $2.6bn investment in Chinese lender ICBC, which debuted Friday, turned into $7.4bn. This sweetheart deal was only possible given Goldman s franchise. It may not be fair, but that s life.
Societe Generale-Unicredit merger might work 26 Oct 2006 PanEuropean deals generally don t stack up. But a FrancoItalian merger would make sense. There would be synergies in Central Europe. True a deal would risk provoking BNP Paribas into counterbidding for Soc Gen. But the chances of that happening are low right now.
Capgemini bids $1.2bn for Indian group 26 Oct 2006 The French IT services company is buying Nasdaqlisted Kanbay to increase its presence in the financial industry. The deal will aid Capgemini's lead among western companies in India's IT sector. But it must improve its record in integrating acquisitions.
Big Oil hits its peak 26 Oct 2006 Lower energy prices are not the only threat to the future profitability of large oil firms; costs are soaring too. That's taken its toll on sector valuations, but at least share prices are now cheap one reason to expect another wave of consolidation.
Hewlett Packard interested in Atos Origin – reports 26 Oct 2006 That the US group would be interested in the French IT group is no surprise. And HP is unlikely to be the only trade buyer. Strategic buyers should be able to pay more than buyout groups like Blackstone. But to maximise value Atos needs to get an auction going.