Legacy airline mergers are a bad move 9 Oct 2006 Continental s chief executive was wise to pass on a merger with United. A legacy matchup does little to create value. Legacy carries would do better to merge with a discount airline. They would feed the legacy s breadandbutter international routes.
MAN forced to back down over Scania 9 Oct 2006 The truckmaker's decision to drop its hostile offer was inevitable after it hit opposition from VW, the biggest shareholder in both groups. But VW will have to make concessions too if it is to engineer a friendly threeway deal.
Pernod’s pointless poison pill 9 Oct 2006 The French company s decision to opt for the Breton defence is puzzling. The group is familycontrolled, and not a likely takeover target. But even if useless, the new poison pill is wrong. It sends nonfamily shareholders the message they aren t welcome.
Opec can get its way for a while 9 Oct 2006 The oil producer s cartel wants to defend $60 per barrel oil. It s not impossible. Demand and supply are well balanced at that price. But not forever. The cost of new oil production is much lower. The lure of profits will eventually prove stronger than the will of Opec.
Cablevision is up for grabs 9 Oct 2006 Time Warner might be able to extract synergies and offer a hefty premium. It has already laid the groundwork to do a deal. The Dolans $7.9bn offer puts the firm in play. They don't want competing offers, but independent directors must seek them.
Mulally must reveal his plans for Ford 9 Oct 2006 The ailing car company s new boss cannot afford to spend much time mulling his options. The firm s burning through cash fast. A deal with Renault/Nissan, cuts and a realistic assessment of marketshare losses should be top of the list. But he needs to act quickly.
Corus is no bargain at these levels 8 Oct 2006 After a 22% rise last week, the AngloDutch steel group now trades at a premium to ArcelorMittal, despite making much lower margins. For a potential bidder, Corus s main attraction is its scarcity value. It s the last big opportunity to buy into the European market.
O’Leary takes on the Irish state 8 Oct 2006 He may be able to buy Aer Lingus cheaply, or trade it for regulatory concessions or financial gain. But it will take his eye off the ball. Ryanair s bid for Aer Lingus is not a reckless affront to the Irish government. The airline s maverick boss has considered most angles.
Vega illustrates perils of the macro style 6 Oct 2006 The Madridbased hedge fund group has shrunk from $12bn to $3bn of assets over two years. Its economic views may yet be vindicated. But bond markets are notoriously difficult to predict and leveraged bets in this field are perilous.
Europe’s record E4.5bn junk deal is a breeze 6 Oct 2006 Philips chipmaker division NXP managed to get this giant bond deal away despite worries about the size and health of the highyield market. But don't read too much into it. NXP benefited from a sensible structure and the market's lack of a future deal pipeline.
Morgan Stanley should consider Fortress bid 6 Oct 2006 The alternative asset manager would be an ideal platform for the bank to build up its private equity and hedge fund businesses. Both sides are still getting to know each other. With Fortress mulling an IPO, the time may be right to pounce.
Lachmann’s Euronext plan looks pie-in-the-sky 6 Oct 2006 The French industrialist has conceived a curious plan to merge Euronext with Deutsche Boerse s cash equity business before its NYSE merger. This would strengthen Europe s hand in any US deal, but it would also involve unpicking the NYSE merger. Why would NYSE agree to that?
York’s departure bad for GM 6 Oct 2006 Kirk Kerkorian s representative has resigned from the car company s board claiming fellow directors were resistant to outside ideas. York s influence waned as GM s performance improved. The dispute over the failed alliance talks with Renault/Nissan was the final straw.
Sovereign’s board wakes up from deep sleep 6 Oct 2006 It s almost a year since the bank s directors acquiesced as chief Jay Sidhu forced a valuedestructive double deal on investors. Now, spurred on by a poorly performing stock price and an activist shareholder on the board, they want to boot him out.
Google in talks to buy YouTube-report 6 Oct 2006 Combining Google s ad platform and computing infrastructure to YouTube s vast audience makes strategic sense. It also blocks competitors. The reported price tag of $1.6bn may be peanuts for Google. But even Google itself probably doesn t know if it is buying junk or a gem.
FrontPoint looks like a good fit for Morgan Stanley 6 Oct 2006 Morgan Stanley is keen to develop a bigger presence in hedge funds. That will be tough to pull off without an acquisition. Buying FrontPoint would give the firm a platform to build its hedge fund business, while bringing some lost talent back home to roost.
Taking private out of private equity 6 Oct 2006 Before it was hedge funds that were titillating readers with tales of running off with their clients loot. Now it s private equity. Private equity has largely avoided the regulators spotlight. But it may only take a few buyout scandals for this to change.
Morgan Stanley economist pays price of independence 5 Oct 2006 Andy Xie has resigned from the bank after an email that said Singapore is trying to attract corrupt money from China . Sellside economists have the same problem with conflicts as analysts do, only on a national scale. They can t be too pessimistic.
Pension buyouts: where are the customers? 5 Oct 2006 Edmund Truell has joined a crowded field of insurers looking to buy up corporate pension liabilities. But so far, there are few takers. That s not surprising, because the cost remains really high. The bet is that regulatory pressure will force companies to insure themselves.
Doughty Hanson disses IPO advisers 5 Oct 2006 The private equity firm blamed the failure of its E1bn IPO on the poor performance of two recently listed private equity funds. The firms that listed those two deals? None other than Goldman Sachs and Citigroup the firms that also acted for Doughty.
Ryanair launches shock hostile bid for Aer Lingus 5 Oct 2006 O'Leary's budget airline is offering a budget cost price for its domestic rival just an 8% premium to the Irish carrier s fair value. This is a big Uturn. It takes Ryanair into the unfamiliar long haul market. And competition issues mean there's plenty of execution risk.
Corus looks big mouthful for Tata to swallow 5 Oct 2006 Just because one Indian steel magnate has landed a European deal doesn t mean Tata will too. Corus looks a large and expensive target. Until Tata can show it s doing more than playing copycat, investors should treat its approach with caution.
Answer to Bernanke’s puzzle is close at hand 5 Oct 2006 The Fed chief says that no one knows how to get US consumers to save more. Well, rewards often encourage virtuous behaviour. That s partly under Bernanke s control. Higher rates might not work perfectly. But they are probably worth a try.
Ghosn should celebrate failure of GM talks 4 Oct 2006 Forging an alliance with the reluctant US carmaker never looked easy for the CEO of Renault/Nissan. But his affections were misplaced. For roughly the same price as a tieup with GM, it might be possible to win control of Ford s European luxury brands.
Tronchetti’s control of TI under further threat 4 Oct 2006 Having lost billions for coinvestors and botched a fight with the government, he may not even be able to profit from his erstwhile control. Italy is swirling with rumours of moves that could curb Tronchetti's power at two key links in his chain of control: Pirelli or Olimpia.
Airbus promises radical restructuring 4 Oct 2006 Some thought it would take a major crisis to force the European aircraft manufacturer into serious reform. Now it has one. New boss Christian Streiff has grasped the nettle. But it's a big task, cutting costs in a politicised group and keeping the A380 on track.
Gas Natural goes speed-dating 4 Oct 2006 The Spanish utility is rumoured to have its eye on EDP, the Portuguese electricity champion, in case it can t get a Spanish mate. But a deal with EDP would probably be the leastpreferred option. It could also run into all sorts of tricky political and control issues.
Wall Street’s brain drain reversing course 4 Oct 2006 Hedge funds have had no trouble luring Wall Street hotshots. But the tide may be turning amid disappointing investment returns. Morgan Stanley has snatched back Stuart Hendel from Eton Park to head up prime brokerage just two years after losing him to hedge funds.
Doughty Hanson pulls E1bn IPO 4 Oct 2006 The buyout firm was always going to find it tough to raise cash with other recent private equity fund offerings trading at discounts. It offered concessions but these weren't enticing. And it didn t have the brand name to pull off such a big deal.
VW changes rules in MAN/Scania takeover game 4 Oct 2006 The German automaker has bought a 15% stake in MAN, the German group just two weeks after rejecting MAN's hostile E9.6bn bid for Scania. This makes some sort of MANScania deal more likely. The question is how it takes shape and whether VW has further compromises to make.