Qatari fund parks its trolley in Sainsbury’s aisle 25 Apr 2007 Three Delta, a propertyfocused fund, has bought a 14% stake in the UK supermarket group. That intensifies the pressure on the board. If the result is a more valuable Sainsbury s, that s all for the good. But the risk is that Sainsbury s just ends up in even more turmoil.
Amazon’s valuation belongs in the fiction aisle 25 Apr 2007 The retailer's shares trade at a skyhigh multiple due to increasing revenues and optimism about future margin growth. But with steep marketing expenses pressurising margins, Amazon appears to be the most overvalued megabrand on the internet.
RBS consortium bid contains E28bn funding mystery 25 Apr 2007 E22bn of the E72bn for buying ABN will come from paying in shares. Another E22bn could come from trimming the banks capital ratios. But that still leaves a E28bn hole. RBS s own funding looks OK. But its partners Santander and Fortis probably need mega rights issues.
Oil price rally could endure 25 Apr 2007 The price of crude is up 30% since the January low. But higher prices are hardly slowing down demand, especially in Asia. Supply is held back by inefficient producers and bad politics. A global slowdown may be the fastest way for customers to regain control.
Madrid nobbled stock market regulator 25 Apr 2007 That's how it looks if the CNMV's exboss is to be believed. He wanted to punish Enel and Acciona for alleged abuses in stock market law. But he was overruled by political appointees on CNMV's board. If true, this is an outrage.
RBS’s E72bn bid puts ABN on the spot 25 Apr 2007 The Dutch bank must not now continue to recommend the offer from Barclays, given the RBS team is paying significantly more and mostly cash. Sticking with Barclays and a parallel deal to sell its US assets to BoA would be reprehensible.
Are ratings agencies out of the subprime woods? 25 Apr 2007 Could be. Its revenues from structured finance ratings skyrocketed in a quarter when subprime mortgage deals ground to a halt. But investors are right to remain wary. Subprime defaults aren t the structured finance world s only Achilles heel. Could be. Moody's revenues from structured finance ratings skyrocketed in a quarter when subprime mortgage deals ground to a halt.
Sacyr faces hefty bill if forced to all-cash Eiffage bid 25 Apr 2007 French courts could force the Spanish contractor to make a cash offer for it French rival. The E8bn price tag would be hard to swallow. The company is already highly leveraged amidst fears the Spanish real estate bubble is about to burst. Spanish banks might pull the rug.
Kleinfeld punished for Siemens’ good performance 25 Apr 2007 The German conglomerate tried to delay the contract renewal of chief executive Klaus Kleinfeld. So he decided to standdown. Siemens shares have risen 50% and operating margin doubled under Kleinfeld. His departure doesn t seem shareholderfriendly.
KKR knocks Terra Firma out of £12bn Boots battle 24 Apr 2007 By securing a 26% stake in the UK retailer and winning over an insider, KKR made it tough for the rival consortium to proceed. The lesson? Without some inside support, buyout firms need to be clearer about their strategies or settle for lower returns.
Carphone Warehouse makes good bet with Best Buy 24 Apr 2007 The UK telecom retailer is pushing forward in the US venture with electronics retailer Best Buy. It s keeping up broadband growth at home. UK retailers often wilt when they cross the ocean, but Carphone has a relatively lowrisk strategy. The shares don t discount much success.
Spanish property stocks in freefall 24 Apr 2007 All it took was jitters over minnow property stock Astroc, which has tanked over 60% in a week. Spanish property stocks were due a correction. But how big will it be?
BA holds the whip in Iberia auction 24 Apr 2007 Any private equity bidder wanting to take over the Spanish airline will have to talk to BA first. But while BA might be kingmaker, it will have to reign over a motley crew of investors. Is it worth the headache?
Drinks giants’ plans for S&N smack of bid froth 24 Apr 2007 A complex deal brewed up by advisors would have seen SABMiller and Diageo launch an £8.6bn offer for UKbased Scottish & Newcastle. Two things excite drinks companies: premium brands and emerging markets. S&N looks like an expensive way of getting not much of either.
Winner’s curse may put pressure on ABN Amro 24 Apr 2007 The Dutch bank s cunning plan to foil a consortium bid has made Barclays look the more likely winner of the bid battle. The snag for the Dutch is that this has dented the value of Barclays offer. And will increase the pressure on them to entertain a rival bid.
Yell’s 20% fall could entice private equity 24 Apr 2007 The Yellow Pages publisher says the US growth slowdown is temporary. But in a mature and competitive business, investors fear the worst. The panic looks overdone. The business has high profit margins and low cash needs. It was once owned by private equity. It could be again.
NY Times holders deal blow to Sulzbergers 24 Apr 2007 How can that be? After all, 58% of the newspaper publisher s shareholders voted in favour of directors at Tuesday s annual meeting. But cut the numbers differently to reveal how nonfamily shareholders voted. A majority of them gave the thumbsdown to directors.
Japan starts to flex global investment muscles 24 Apr 2007 The government is slowly moving towards a more aggressive approach to its $3.8tn portfolio. The model is Singapore s Temasek. Japan won t easily match Temasek's 18% annual return. Its fund is too big and it is starting too late. But active management is a good idea.
Buyout shops must learn to live with Goldman 24 Apr 2007 The bank closed a $20bn buyout fund, the biggest ever. That has peeved some of its buyout clients who worry Goldman will compete. But many sponsors will find it a useful pool of coinvestment capital. And by one measure, Goldman may be their best source of future deals.
Enel gets easy ride on Endesa financing 23 Apr 2007 The Italian utility is borrowing heavily to finance a noncontrolling stake in the Spanish group. That means it ll be dependent on dividends to repay that debt even though it won t be able to control Endesa s dividend policy.
Could demand for buyout loans exceed supply? 23 Apr 2007 Issuance of LBO loans could top $600bn this year. That s more than the market can handle, says Barclays credit strategists. That might have been true a few years ago. But now the supply of credit seems infinitely responsive to demand.
Russia’s flawed reformer dies 23 Apr 2007 The best thing about Yeltsin was his belief in freedom. But he was a chaotic organiser, handing much of industry over to robber barons. The tragedy is that his failings made Russians suspicious of open systems. That made it easier for Putin to mount a statist countercoup.
ABN needs to explain its LaSalle deal 23 Apr 2007 Sure, the Dutch bank got a good price. But the deal stokes suspicions it was a spoiling tactic to head off a higher offer for ABN from RBOS. To dispel these worries, ABN must disclose the terms under which the $21bn sale to BofA can be terminated.
Coach’s valuation looks a bit stretched 23 Apr 2007 The leather goodsmaker has shed its once stuffy image and reinvented itself as a fashion brand. The transformation has won applause from both customers and investors. But it has also stretched Coach's valuation out of shape.
Spanish slowdown shows urgency of Sacyr bid 23 Apr 2007 You certainly can t fault the Spanish builder for the audacity of its hostile E9.5bn allshare offer for France s Eiffage. Yet the bid may be driven as much by fear as by bravura. Spain s construction boom is showing signs of slowing sharply.
French election turns to battle for the centre 23 Apr 2007 Nicolas Sarkozy and Segolene Royal have come through to the final round of the presidential contest. The centrist vote will be decisive. With the left in her pocket, Sego might abandon some old Socialist plans. But Sarko could also further tone down his calls for reforms.
Equity bridge stretches from US to Europe 23 Apr 2007 Banks will provide temporary equity to KKR and Pessina to help make the numbers work on their £12bn agreed bid for Alliance Boots. The bullmarket financing tool is new to Europe. It s great for KKR, which doesn t round up equity partners now. But the banks take risks. The bullmarket financing tool is new to Europe. It s great for KKR, which doesn't need to find equity partners. But the banks take risks.
Employee options trading systems may reveal deals 23 Apr 2007 Google may have to suspend trading on its new platform if it holds talks on a big takeover. But that could tip off the market. Wall Street is now flogging these systems to smaller companies, which might have to shut them down when pursuing relatively small deals.
AstraZeneca’s bets $15.6bn on biotech 23 Apr 2007 The UK pharma paid 25% more than the market expected to win the auction for the US biotech MedImmune. That s the price of potential growth. Astrazeneca is paying 12 times revenues, but sees huge synergies. And biotech could help solve its own growth problem.
ACS chairman brandishes unloaded MBO offer 23 Apr 2007 Darwin Deason, founder and chairman of the IT services company, warned his new, higher buyout bid is his best and final. His promise to give up multiple voting rights if the deal comes to a poll is the right thing to do. But his offer still looks too low.