Indian tribe threatened with scalping 7 Dec 2006 The Seminoles still technically at war with the US are paying Rank $965m, or 14 times ebitda, for Hard Rock. That s a 40% premium to the sector. To avoid a pillaging, it will need to exploit the brand like pioneers.
Could 666 be the mark of the top? 7 Dec 2006 That s the number of the Fifth Avenue building which has sold for a recordbreaking $1.8bn. It s a reminder that US commercial property is soaring ahead, fuelled by the remarkable growth in securitized lending.
European telecoms could be next infrastructure play 7 Dec 2006 The threat of tighter network regulation could allow them to raise cheap funding or sell out at a premium to infrastructure funds. BT, which is considering such schemes, could add up to £3bn of value. Its main European peers could add E18bn.
Diversification won’t bail out hedge fund-of-funds 6 Dec 2006 Notable firms, including Morgan Stanley and Goldman, invested in Amaranth. Yet due to diversification, their clients haven t lost too much. The cost of protecting capital, however, has a price. They may be safer, but the larger funds aren t returning much more than cash.
Was Greenspan right to ignore irrational exuberance? 6 Dec 2006 A decade on, some commentators think the Fed chairman was. Despite the bubble s collapse, 10year equity returns haven't been so bad. However, in order to deal with the stock market implosion the Fed inflated first a housing bubble and then a leveraged buyout boom.
Gallaher bid kicks off tobacco M&A 6 Dec 2006 Japan Tobacco can pay a smoking premium. But other suitors may like Gallaher s position in the UK, emerging markets and cheap smokes. Altria or BAT might also want to unite the Benson & Hedges brand. Whoever loses out will no doubt look to Altadis as a consolation prize.
Fixed income markets contradict themselves 6 Dec 2006 Falling US bond yields and an inverted yield curve suggest recession, but narrow credit spreads suggest healthy expansion. Inflation could resolve the conflict. There are signs of rising price pressures. If so, the only soft landing may be 30 feet underwater.
Obermann puts his mark on Deutsche Telekom 6 Dec 2006 The German telecoms operator s new boss has made his opening move. He s promoted two key lieutenants and batted away a union stooge. That alone won t get DT back on the rails. The proof of the pudding will be the revival plan he comes up with next year.
Steel becomes less cyclical 6 Dec 2006 Look at how Arcelor Mittal has been talking up prices and has now snapped up a E17bn credit facility on good terms. Mittal would be positive, but it does look less volatile. Owners are more profithungry, and demand growth has been unexpectedly strong.
JP Morgan fumbles legal settlements 6 Dec 2006 The bank agreed to pay $425m in April to preemptively settle a classaction IPO lawsuit. The catch: there won t be a suit after all. It may not get the money back, either. The bank had the opposite issue with WorldCom, when it paid $700m more than if it swiftly settled.
Bond and credit markets could both be wrong 6 Dec 2006 Low US bond yields suggest recession while narrow credit spreads suggest healthy expansion. But neither side is worrying about inflation. That could be wishful thinking. Protectionist pressure is rising and productivity gains are slowing. The great disinflation may have ended.
ITV episode leaves NTL with tail between legs 6 Dec 2006 True, it s not all bad. The cable group avoids gearing its balance sheet to the limit, and it can focus on integrating recent acquisitions. But it s been outmanoeuvred by Sky. And worse, the failed bid suggests that NTL feels it needs a deal to make its model work.
Yahoo kicks off much-needed revamp 6 Dec 2006 The internet group is breaking into three operating divisions. In theory, this should increase accountability and focus. But the divisions are still illdefined. The risk is that they duplicate efforts or, worse, squabble over the spoils.
Google turns eye to healthcare 5 Dec 2006 One of its executives, on the company blog, hinted at the internet giant's desire to wade into the industry by digitising medical records. Doctors and hospitals lack the incentive to change. But Google may use its advertising prowess to entice cooperation and empower patients.
Indian property fever keeps burning 5 Dec 2006 The central bank has warned of overheating. But $4bn of real estate IPOs in the pipeline suggests few are listening. True, demographics are favourable. But not enough to justify 300% price increases in three years. It looks like another financial bubble.
Liverpool bid whips up froth in UK football market 5 Dec 2006 Dubai International s reported price for the Premiership club is less than Man United went for. But that is just the upfront payment. It will also have to help pay for a new stadium. The price for topflight clubs is still high. Only the very rich need apply.
John Mack’s not on trial – the SEC is 5 Dec 2006 Last week, regulators said they closed the insider trading case involving the Morgan Stanley boss and Pequot Capital. So why is Congress still debating the matter? Because valid questions linger about the SEC's impartiality in handling the case. So why is Congress still debating the matter? Because valid questions linger about the SEC's handling of the case.
Goldman brings hedge fund trackers step closer 5 Dec 2006 With viable benchmarks to track and too many funds posting average performance, the hedge fund industry is ripe for lowcost passive funds. Sure, Goldman s planned ART fund won t be a perfect tracker. But its arrival may herald an end to the days of huge fees for soso returns.
How ugly are automakers’ finances? 5 Dec 2006 Two celebrated Wall Street hired guns, Steve Girsky and Ken Leet, recently jumped ship from US car companies to join distressed debt funds. That s a coup for Cerberus and Centerbridge, the firms where they are headed. But it looks like yet another warning sign for Ford and GM.
UBS at crossroads on Wall Street 4 Dec 2006 The Swiss bank s impressive march on the US bulge bracket has wobbled. Its conservative approach to buyouts has been partly to blame. But should UBS rev up the risk as LBOs look increasingly nuts or patiently endure what may be a temporary slide down the league tables?
Will Chavez turn decline into disaster? 4 Dec 2006 Poor Venezuelan economic performance isn t just his fault; it dates back 35 years. While oil revenues stay high, Venezuela may grow. Though with declining productivity, if oil prices drop or Chavez really guns for socialism, decline could become disaster.
Will Carlyle build a bridge over the Red Sea? 4 Dec 2006 Opening a private equity shop in Dubai seems nuts given the surfeit of petrodollars that have kept asset prices in cloud cuckoo land there. But don't count on Carlyle financing another indoor ski resort. The real goal will probably be to gather up more petrodollars to manage.
Amazon rally looks overdone 4 Dec 2006 The internet retailer's shares soared some 60% since the summer on its plans to grow sales and repurchase stock. Yet in an uncharacteristic twist, Wall Street analysts are more bearish on Amazon than their clients. Who's right?
Alitalia stake sale a step in the right direction 4 Dec 2006 It's about time the Italian state sold down its controlling stake. Its influence has hindered rather than promoted reform at the carrier. Finding a buyer for 20% looks hard. Perhaps the best bet is the Asian option: a cashrich, statecontrolled carrier looking for traffic.
Bank of NY-Mellon deal is a winner 4 Dec 2006 By structuring the deal to take advantage of Mellon s higher rating, Bank of NY avoids paying much of a premium for its smaller $17bn rival. That means the substantial savings with a net present value of more than $4bn flow to the shareholders of both Mellon and Bank of NY.
Prada heads up queue for luxury IPO runway 4 Dec 2006 Prada, Armani, and Versace are all reportedly planning flotations in 2008 partly to cash in on luxury s doubledigit growth story. But sustaining that growth will bring these fashion brands new risks. And Prada for one has yet to prove its financial discipline.
Premier Foods puts RHM out of its misery 4 Dec 2006 Doughty Hanson tripled its money on RHM. Despite a 30% premium, the UK food group's £1bn sale to Premier will leave investors out of pocket. That may not be the buyout firm's fault, but it won t help sentiment towards private equity.
EMI bear hug would be tough to pull off 4 Dec 2006 Permira is reportedly considering a bear hug. To win, private equity would need to compensate EMI holders for giving up on a Warner deal. The rumoured 310p a share price gives EMI little for this option. A higher price would be needed to break the UK music company s defences.
Station Casinos MBO is a bit of theatre 4 Dec 2006 The company s directors are making the right sounds by setting up a special committee and entertaining other offers. But when insiders own more than a quarter of shares, the best outcome for minority investors is a slightly sweeter bid from managers.
Pfizer catastrophe is good news for biotech 4 Dec 2006 Scrapping torcetrapib, a drug with $15bn in potential annual sales, has badly wounded the drug giant. Cutting Pfizer s sales force and other stopgap measures won t cut it. The cash rich group is likely to start buying biotechs left and right.