Iberia tries to bounce British Airways into a deal 30 Nov 2006 European consolidation is finally taking off, and Iberia wants to join in before competition savages its home market. But BA is playing it cool. So the Spanish airline is flashing its eyes at other carriers to try and pique the ardour of its usual ally.
US market reforms benefit Wall Street over shareholders 30 Nov 2006 The Treasurybacked panel s suggestions might make US capital markets more competitive. But they also roll back investor protections. Their big recommendations to improve shareholder rights are already being adopted by the market. This looks like a securities industry sop.
Nasdaq only needs 50% to close LSE bid 30 Nov 2006 Although the US exchange's bid looks like a buyout, its bankers think the cashflows are secure enough to let it close with a bare majority. Only needing another 21% could help Nasdaq in its battle to force LSE into talks.
Infrastructure bubble may not be wholly irrational 30 Nov 2006 At least as far as the fund managers who are sucking in money, pushing up valuations and piling on leverage are concerned. S&P warns of a dotcomstyle bubble. But heads I win, tails you lose incentives mean the behaviour could, in a narrow sense, be rational. At least so far as the fund managers who are sucking in money, pushing up valuations and piling on leverage are concerned.
Romanians throw Cold War book at Credit Suisse 30 Nov 2006 A banker has been swept up into Bucharest's probe into privatisation deals, and spookily charged with espionage. That has a period feel. But while the tone may be pure Cold War, this doesn t look like the prelude to a nationalistic backlash against Western investors.
Sarkozy tones down rhetoric of change 30 Nov 2006 The French interior minister's official entry into the presidential fray plays to the centre. He says he will move quietly on reform. Those expecting an agenda of dramatic change are likely to be disappointed. And business should be wary of a Sarko presidency.
Bolivia shows why Latin growth is so slow 30 Nov 2006 Land reform signed by president Evo Morales on Tuesday promises to redistribute a fifth of the country s property. Like so many Latin American ''reforms'' it disregards property rights. No wonder the region lacks long term investment and economic growth
Livingstone wades into LSE fight 30 Nov 2006 London s mayor, also known as Red Ken, wants to keep this bastion of UK capitalism out of the hands of tootough US regulators. His plea for antitrust scrutiny scores a point against the UK government. And he ll win something that he craves: publicity.
Will Citadel doom the prime broker boom? 29 Nov 2006 The Chicago hedge fund may borrow some $2bn through a landmark bond issue, reducing its dependence on Wall Street brokers for leverage. This is a costeffective way to hoard rainyday funds and a smart move given the convergence of hedge funds and investment banks.
Novartis should jump on selling Gerber 29 Nov 2006 It makes little strategic sense for the Swiss pharma group to sell mushy baby food. Yet it has held onto the brand for more than a decade. With Nestle and private equity groups eying Gerber, Novartis couldn't pick a better time to start an auction.
Why has BofA overtaken Citi in value? 29 Nov 2006 This seems odd. Citi is more diversified, global and has earned more money for shareholders over the past four years. The reason appears to be pretty simple: investors don t have much confidence in Citi s management.
Sweet-talking can’t stop dollar slide 29 Nov 2006 Breton, Paulson and Bernanke all agree the greenback shouldn t fall too fast. They may be right, but it s the market s call. They d do better to plan for a much weaker dollar, sooner or later. That means higher US inflation and tougher times for eurozone exporters.
Lafarge break-up bid for Saint-Gobain could be a winner 29 Nov 2006 The E33bn conglomerate looks ripe for a breakup. But private equity would find it hard given management hostility and political opposition. But Lafarge, which has a better track record than its French rival, might be able to pull off the trick in alliance with other investors.
Corporate governance: is the Higgs Code past it? 29 Nov 2006 Probably not. But, as ITV and Standard Chartered have shown, many UK companies are finding ways to govern as they want. Shareholders don t seem worried. But that may change the markets turn down. Then they could look for scapegoats.
Corporate execs think like buyout barons 29 Nov 2006 No, GE isn t going private. But the Houghton Mifflin deal, and pending Harrah s takeover, by tinier rivals hint at changing behaviour. Some bosses are willing to take on lashings of debt and bring in odd new investors to compete with private equity.
CSN could find financing a £5bn Corus bid tricky 29 Nov 2006 The Brazilian steelmaker can t simply pile on debt. The Corus pension fund stands in the way. Besides, steel is a cyclical industry. Dutch corporate governance is another obstacle. An equity offer would help, but CSN s major shareholder might be reluctant.
Hedge funds should brace for political meddling 29 Nov 2006 The Democrats have yet to take the reins of Congress, but hedge funds don t need to wait to see what may be in store in the year ahead. Republican Senator Arlen Specter is again fanning the fire for hedge fund regulation. It s a smart political move, but has little substance.
Merging US market regulators was long overdue 29 Nov 2006 Separating the market regulators of the NYSE and Nasdaq held brokerage houses to differing standards of capital and conduct. The SEC's decision to merge the two eases the regulatory burden without compromising investor protection.
Scania lines up pac-MAN financing – exclusive 29 Nov 2006 It s a bold move. But a E12bn counterbid by the Swedish truck group for its German rival could be the best way to scrunch the two together. VW, the biggest shareholder in both groups, would need to be won over. But an allcash bid by Scania might just pass muster.
ServiceMaster unlikely buyout candidate 28 Nov 2006 But the experience of the group s doppelganger, UK firm Rentokil, shows a deal is unlikely. Previous buyout speculation has come to nothing. The $3.4bn extermination to lawncare conglomerate seemingly answered investors prayers by putting itself on the block.
Icap is a bit like an exchange 28 Nov 2006 The interdealer broker has a fastgrowing electronic platform and dominant market shares in trading a number of financial instruments. But it s still hard to get to an exchangestyle multiple, given the spread of Icap s business.
EMI buyout idea problematic 28 Nov 2006 The best way of private equity making a killing from buying the £2.1bn music group would be by eventually merging it with Warner Music. But if that deal can get through the antitrust authorities, EMI's existing shareholders may be better off keeping the upside for themselves.
Russia regresses into command-style economy 28 Nov 2006 Rampant renationalisation of key industrial assets and Gazprom s dominance may threaten the Russian economy, the OCED has warned. European politicians and businessmen should read the report before they make further trips to Moscow.
Grade may not answer all ITV’s problems 28 Nov 2006 The broadcaster appears on the front foot by pinching the BBC head. Having a big name on board will steady the ship at a difficult time. Investors shouldn t get carried away. Grade s record is mixed. But even if he fails at ITV, he ll be richer than if he stayed at the BBC.
Nasdaq’s LSE financing not as stretched as it looks 28 Nov 2006 The exchange looks to have bust a gut to issue $775m in preference shares and a $1.75bn bridge loan. The borrowing costs escalate rapidly. But, if Nasdaq wanted to improve its hostile offer, it could probably issue ordinary shares. Their price has, after all, been rising.
Iberdrola’s £11.6bn Scottish Power bid lacks logic 28 Nov 2006 The deal requires approval by Iberdrola's shareholders. It will be interesting what ACS, which wanted a merger with Union Fenosa, says. The promised £88m synergies are piddling compared to the transaction's size. The argument for merging seems little more than big is better.
Eurotunnel will test new French bankruptcy law 28 Nov 2006 Two investors think they have been crammed down by Eurotunnel and the courts. They may have a point. It seems unfair that creditors with different economic interests should be forced to vote together. The law could use a tweak.
SEC should get onto front foot 27 Nov 2006 The SEC is so preoccupied with past scandals like backdating that it may miss new threats in hedge funds, private equity and derivatives. The agency must now choose its battles carefully. Britain s proactive approach may offer a useful lesson.
Wal-Mart’s India deal no great loss for Tesco 27 Nov 2006 The UK retail giant may have lost out on a contract with mooted partner Bharti to step into India s £120bn retail sector. But in retail, being first isn t always best. And India has plenty more rich familyowned conglomerates to go around. The UK retail giant may have lost out on a contract with mooted partner Bharti to get a foothold in India s $210bn retail sector. But in retail, being first isn t always best. And India has plenty more rich familyowned conglomerates to go around.
Suez back in play if GdF merger fails 27 Nov 2006 As its merger with GdF is in jeopardy due to further delays, the French utility company could consider other options. Italy s Enel and Germany s RWE are two potential suitors. They wouldn t necessarily have to go hostile if the GdF merger doesn t go through.