Macquarie has a credibility problem 4 Jun 2007 The Australian bank s stock fell by 10% after its valuation models were criticised by shortseller Jim Chanos. These models justify high acquisition prices and debtfunded dividends. To dispel criticism, Macquarie should publish its models.
Palm jumps through hoops for expertise 4 Jun 2007 The PDA maker couldn t find a strategic buyer. So it sold a minority stake to Bono s private equity shop, Elevation Partners. Palm gets some managerial expertise. And it s returning cash to investors. But the deal appears more complicated than transformational. Palm gets managerial expertise. And it s returning cash to investors. Indeed, perhaps the transaction is best viewed as two deals in one.
Interest in Tarmac shows Lafarge is back in shape 4 Jun 2007 The cement giant is on a roll after 18 months of restructuring led by a new CEO backed by Albert Frere, its dominant shareholder. The stock is up 70% and the company is on the lookout for acquisitions. And Frere may be raising money to up his stake in the company.
JPMorgan finds clever way back into buyouts 4 Jun 2007 After ditching JPMorgan Partners last year, the bank s hedge fund Highbridge has hired Goldman s Scott Kapnick to start a LBO fund. This may allow Highbridge to pursue delicious investment opportunities without having to worry about JPMorgan s bankers whingeing.
Loony shareholder proposals hold a lesson 4 Jun 2007 Corporate gadflies often put daft proposals to shareholder vote and are swatted down. But even sensible proposals rarely succeed. The fear that shareholder democracy initiatives will result in the capture of corporations by special interests is overblown.
Terra Firma’s bet on waste yields outsized returns 4 Jun 2007 The buyout group's £700m waste disposal bet has paid off. After last year's WRG sale, it now hopes to float the rump, Infinis, for £1.2bn. At that price, Terra Firma would make an 80% return and without huge leverage or assetstripping.
KKR may have First Data bondholders over a barrel 1 Jun 2007 The buyout bigwigs left the market agape when they unveiled an unprecedented $16bn covenant lite loan for the acquisition. But how KKR deals with First Data s existing bondholders later this year may turn out to be this deal s really memorable feature.
PT’s Brazil plans would tick a lot of boxes 1 Jun 2007 The Portuguese group is proposing to switch out of mobile group Vivo into rival Telemar. That could solve two big problems. It could get Spain s Telefonica out of PT s hair and give it control of a Brazilian asset. The trouble may be delivering the deal.
US economy may have finally hit the brakes 1 Jun 2007 Employment is up, but firstquarter GDP increased less than the pace of population growth. Productivity is also down and it may have been overstated. The economy s imbalances will start to matter soon, even to the stock market.
Wal-Mart rightly rolls back capex 1 Jun 2007 The retail giant has finally realised its future lies outside America. It is slowing US store openings and returning capital. This is smart. Shareholders get some cash. Return on investment should rise. And it may lessen political heat being placed on the retailer.
Directors have gotten lucky in bad buyouts 1 Jun 2007 In several deals Clear Channel, EGL, Caremark directors signed off too hastily on bids. So far, that s not greatly damaged shareholders. But that s only because activists and rival bidders have done their jobs. In less heady times, directors deficiencies will become clearer.
Lehman picks the right time to list its buyout fund 1 Jun 2007 Lehman s $500m vehicle also looks investor friendly. It will be fully committed at the start and the shares have voting rights. A similar fund floated by Partners Group trades at a 7% premium. The discount to NAV has narrowed for both the KKR and Apollo buyout funds.
Dow’s Bancrofts rightly agree to talk 1 Jun 2007 Their decision at long last to meet with Rupert Murdoch and consider options for Dow Jones is a good one. The family is in a great position to bargain for a bright and somewhat independent future for the Wall Street Journal.