Paul Allen gets the better of Hollywood 20 Oct 2006 The Microsoft billionaire is a big investor in DreamWorks Animation. The studio s stock is down sharply since its float. However, the further they fall the more shares Allen gets from founders Spielberg, Katzenberg and Geffen.
Tronchetti cedes ground to keep hand on TI’s reins 20 Oct 2006 The Pirelli boss s pact with Mediobanca and Generali may seem to have upped his grip on the telecoms group. But it s probably weaker now. Mediobanca and Generali aren t promising him much. But they appear to have got a big packet of goodies in return.
Hedge funds to face political pressure 20 Oct 2006 Despite the Amaranth fiasco, the amount of institutional money invested in hedge funds is set to triple by 2010. For hedgies, that will create a bonanza of fees. But as more pension funds get in the game, politicians will likely demand more regulation.
US population growth won’t solve savings crisis 20 Oct 2006 There are now more than 300m Americans. However, the increase comes from greater longevity and lowskilled immigration. That won t help the retiring babyboomers.
Time Warner wants a crack at Cablevision – exclusive 20 Oct 2006 The Dolans have offered to take Cablevision private for $27. Time Warner can pay up to 20% more but only if asked. An allstock deal, at a premium has many advantages for all shareholders. Cablevision's independent directors must explore this opportunity.
Coke needs fresh blood at the top 20 Oct 2006 Finding talent to run an iconic brand should be a snap. Yet Coke investors have suffered a constant reshuffling of managerial ranks. Its latest candidate for the number 2 job comes with the taint of insider trading allegations on his resume. Is Coke getting desperate?
Tata bags Corus with £5.1bn bid 20 Oct 2006 The Indian steel group is counting on about £200m of synergies to justify its acquisition of the AngloDutch steel group. On that basis, it doesn't look such a stretch. Whether similar cost savings would be enough to tempt rival steel groups remains to be seen.
Online gaming investors face more short-term pain 20 Oct 2006 Stocks like Partygaming were a punt on US legality. Now they re a bet on nonUS growth and eventual consolidation. That should mean more investors prepared to play. But valuations don t yet reflect the new reality of lower margins and likely tax bills.
The world’s largest IPO may be more expensive than it seems 20 Oct 2006 If ICBC produces bad debts as it has in the past, the deal s way overpriced. At 2.23 times book, it seems reasonably priced, yet bad debts make the bank s balance sheet questionable.
Invest for the future or buy back the stock? 20 Oct 2006 That s the key question facing US corporate chiefs. They re plumping for record levels of repurchases. Hedge funds are marking down companies with big capex plans. That provides CEOs with little incentive to invest in the future.
Informa’s mooted private equity takeover will stumble on price 19 Oct 2006 Informa is doing rather well. Private equity may find the deal can only get done by reversing into Informa s public listing instead. So many UK publictoprivate deals have failed ITV, HMV, the list goes on because investors in those struggling firms wanted big prices.
Larry Summers succumbs to hedge fund sirens 19 Oct 2006 How ironic. While at Harvard, he oversaw the implosion of one of the world s greatest hedge funds Harvard Management. Star fund managers fled as he failed to defend their compensation and offered up investment advice of questionable value.
Imminent Blackstone bid for Atos Origin unlikely 19 Oct 2006 The private equity firm has backed away from a bid for the troubled French IT group, according to someone familiar with the situation. It s hardly surprising the group has attracted LBO interest. But after recent profit warnings, wouldbe bidders will be wary of overpaying.
Citigroup gives investors little to celebrate 19 Oct 2006 The US megabank managed to beat estimates, but only by juicing up its earnings with several oneoff items. The topline figure conceals weaknesses in the investment bank and alternative asset management.
Icahn puts new spin on classic greenmail approach 19 Oct 2006 Companies used to pay Carl Icahn to go away. But now Lear is offering the exraider a discount on shares and a seat on the company s board. Lear needs capital and turnaround expertise. But the struggling autoparts maker will be tougher to fix than some of Icahn s recent targets.
Are Greenhill’s shareholders confused? 19 Oct 2006 The boutique lost 10% in value after its merchant bankers caused a small earnings miss, despite a bumper quarter from its M&A bankers. That s because investors keep valuing private equity s lumpy earnings like the advisory business.
What’s the right way round for MAN-Scania? 19 Oct 2006 Scania countered a bid from its German truck rival by suggesting it should be the buyer. It says it s better run and has better governance. Management worries look overdone, but Scania has a point on governance. And its number two investor seems to agree. MAN will have to pay up.
Arnault and Frere play the private equity game 19 Oct 2006 The LVMH owner and the Belgian financier know a lot about investing. But do they really need each other to play at buyouts? Probably not. But they may like the idea of being in the private equity swim. If something really exciting comes up, they can grab it for themselves.
Russia gives US dose of capitalist medicine 19 Oct 2006 Rumours are flying about Russians snapping up stakes in old rustbelt giants like US Steel and GM. The basic idea makes some sense. The oligarchs have heaps of cash and Putin s national dignity agenda gives a motivation. But US politicians are unlikely to stand for it.
Corus can’t let bidders slip away 19 Oct 2006 Even though Tata's indicated bid is below the share price, Corus isn't trying to nudge it up by pursuing alternative bids, despite interest. That's sensible. The first task is to hook Tata. A rival bid isn t a sure thing. If Tata gets scared away, Corus could end up emptyhanded.
Is Mike Bloomberg missing the boat? 19 Oct 2006 The New York Mayor says he s had recent approaches but won t sell the financial information giant he founded anytime soon. Given the hedge fund gusts that have filled his sails, and the private equity boom that promises him a clean exit, this could be a mistake.
New eyes at Bank of England see inflation risk 18 Oct 2006 The two latest additions to the Monetary Policy Committee voted for an immediate rate increase to 5%. The rest are willing to wait a month. The minority case is strong, with the RPI price index the inflation that consumers see running at 3.6%.
Carry trade is alive and well 18 Oct 2006 Net foreign purchases of US securities surged to $117bn in August. The majority of this money came from the private sector. These inflows are lubricating the US credit system. But the carry trade remains vulnerable.
Who’s the clubbiest in private equity? 18 Oct 2006 Wall Street can t stop talking about club deals. That s because the feds are investigating anticompetitive practices. Bain is the most promiscuous and Apollo the least. But drawing inferences from clubdeal dance cards is risky.
Intesa mulls creation of E700bn fund giant 18 Oct 2006 That may sound very ambitious. But if Passera could pull it off, it could set off a wave of transnational consolidation in fund management. Italian bank boss Corrado Passera is not satisfied with pushing together Intesa and Sanpaolo s fund arms. He wants Credit Agricole's too.
White squireen buys into Aer Lingus 18 Oct 2006 It s not clear what mobile phone bigshot Denis O Brien is up to. But he may be looking to block Ryanair s bid for patriotic reasons. Whatever his motives, his emergence is another hassle for Ryanair boss Michael O Leary.
The decade of Chinese deflation is ending 18 Oct 2006 The shift in manufacturing to China in recent years has suppressed inflation. But manufacturing costs are now soaring in coastal China. That will make further outsourcing less attractive and push up prices.
Yahoo shareholders are myopic 18 Oct 2006 Investors have marked down Yahoo shares after disappointing results. But a new advertising system in 2007 is likely to boost the internet company s prospects.
Investment bank bails out JP Morgan 18 Oct 2006 M&A fees and fixedincome trading both put in a strong performance in the bank s third quarter. That should please chief Jamie Dimon. But profits in the bank s other businesses fell across the board. Worsening credit conditions may be Dimon s new headache.
Natixis looks an uninspiring animal 18 Oct 2006 This corporate banking merger betrays its mutual banking origins. Few costs will go, Natixis is relying on synergies to make the deal work. That requires strong management. And a convoluted governance structure makes it harder for Natixis boss Dominique Ferrero to push forward.