Harman’s compromise is better than nothing 22 Oct 2007 KKR and Goldman will buy $400m in converts instead of taking the stereomaker private. It's better than paying a $225m break fee. Harman gets an infusion of cash and the consolation prize of a vote of confidence in its shares. Sallie Mae might want to take note.
Poland moves firmly into post-Socialist era 22 Oct 2007 The losing Kaczynski government irritated much of the EU, but its economics were firmly promarket. The new Tusk administration won t change that. Poland threw out the incumbents, in standard postCommunist style. But in a regional first, it didn t bring back the Socialists.
Credit crunch may help some deals get done 22 Oct 2007 Look at Techem, the E1.9bn German metermaker in the midst of a yearlong tussle among management, hedge funds and wouldbe private buyers. The latest agreement with Macquarie might stick, if hedge fund shareholders decide tighter markets make a higher offer improbable.
Dubai makes two financial steps forward 22 Oct 2007 A swap between Borse Dubai and Qatar of their respective stakes in UK s LSE and Sweden s OMX could defuse a poisonous regional rivalry and allow Dubai to secure its Nasdaq deal. Add to that the first big listing on the Dubai international stock exchange ports operator DP World.
Oracle’s $6.7bn bid for BEA starts ticking 22 Oct 2007 The software group says it won t raise its offer for its rival and the bid expires on October 28. But there are reasons to suspect the offer won t detonate. Oracle has done the same thing before and then relented. And it may want BEA enough to pay more than its current offer.
Rock discovers limited taste for boardroom blood 19 Oct 2007 Replacing the UK bank s chairman, Matt Ridley, with Bryan Sanderson looks a step in the right direction. Sanderson should meet both City and political approval. But it s not clear why Ridley is the only casualty. Unlike other fallen banks, Rock is still being run by the executives who got it into trouble.
Do investors think the New York Times is worth a pittance? 19 Oct 2007 A breakup analysis of the US media group suggests they do. Strip out the value of other assets, and the core brand is worth a mere $700m or so just over three times operating profit. This would be insane if it weren t for management s clear lack of concern for shareholders.
What happens if the Super-SIV sinks? 19 Oct 2007 The $80bn Treasurybrokered fund designed to buy assets from stumbling SIVs is having a hard time attracting backers. Not everyone will be disappointed if it fails. But such a spectacle could be the death knell for troubled SIVs.
As China grows stronger, so does the Party 18 Oct 2007 China has been transformed from a communist laggard to a capitalist superpower. But the Communist Party remains stuck in the past. Both at home and abroad, it is deaf to entreaties. That intransigence sows the seeds of political and economic instability.
Nokia Q3 reaps rewards of good strategy 18 Oct 2007 In a stunning third quarter, it increased profit margins despite falling prices for phones and upped global market share to 39%. Even its troubled network business is making progress. The only catch is the share price, which reflects a lot of good news.
Inexperience shows in BoA’s investment bank 18 Oct 2007 Modest writedowns on leveraged loans suggest deft risk management from the US s secondlargest bank. But dismal trading results at its relatively young investment bank let the side down, underlining that many rivals' ibanks are older and perhaps wiser.
Minimalist EU treaty should help growth 18 Oct 2007 The 27 squabbling governments have now signed up. No one will be overjoyed by the result. But even an imperfect deal is better than bickering. At least the new arrangements should nudge deregulation forward and eventually allow further EU expansion. It s not a bad outcome for business.
Sovereign Wealth Funds 18 Oct 2007 Threat or menace? Or neither? These government funds with global ambitions account for more than $2tr. Breakingviews looks at the top players and examines how much fear they inspire.
Don’t blame the foreigners for India’s overheating 18 Oct 2007 India s attempt to prevent speculative capital inflows is understandable they have driven the rupee up 12%. But further restrictions are not the answer. Instead, India should cut its budget deficit, raise interest rates and allow its own residents to invest overseas.
Piech may sacrifice MAN in monster truck merger 18 Oct 2007 The Volkswagen chairman might let Swedish truckmaker Scania buy German rival MAN. VW is the biggest shareholder in both. Abandoning MAN might offend German sensibilities. But since Piech's own car empire is shaping up, he no longer needs to care very much.
Lloyds’ £30bn demand shouldn’t have killed Rock deal 17 Oct 2007 The Bank of England has indicated that Lloyds TSB wanted to borrow £30bn of public money at a subsidised rate to finance a takeover of Northern Rock before the run on the bank. There was an easy counter: pay us a proper interest rate but cut 80% off the price you're offering Rock shareholders.
Massive transport strike to test Sarko reform drive 17 Oct 2007 France could be paralysed on Thursday by the biggest strike in 12 years, called to protest against the president s pension reform plans. Sarko should stick to his guns and follow up by privatising the transport system.
Cablevision governance should make investors stubborn 17 Oct 2007 Shareholders look set to vote down the Dolan family s $36.26 a share offer. The holdouts think it s worth $47. That may be a stretch. Still investors are right to vote no. The Dolan s voting lock due to the company s dualshare structure has deprived them of a proper auction.
MySpace deal shows where Skype belongs 17 Oct 2007 Murdoch s social networking giant inked a deal to offer its users the internet phone service. This makes sense social networking is all about communication. And the deal shows how Skype can be put to better use than as an addon to an online auctioneer like Ebay.
Fed’s decision-making pain may be increasing 17 Oct 2007 Inflation ticked up in September and foreign investors have become unreliable, suggesting the Fed should raise rates. Housing is still weakening and could have some way to go, suggesting rates should fall further. The Fed is on the horns of an eversharpening dilemma.
Stale male City whistleblowers make mockery of law 17 Oct 2007 Firms are being hit by a tide of claims from exemployees masquerading as whistleblowers in the hope of extracting inflated unfair dismissal payouts. Nomura has just fought off two such claims. But most banks settle, rather than risk damage to their reputation. Longterm, that could prove more expensive.
Heineken and Carlsberg prepare to binge on S&N 17 Oct 2007 Bagging the £9bn UK brewer won t be easy, nor will it be cheap. Bid speculation has long made S&N s share price frothy. While there is strategic sense in buying S&N, a deal doesn't look financially attractive.
JPMorgan trumps Citi again 17 Oct 2007 The US bank took its own black eye in credit and relied on some oneoffs to top earnings estimates. But most of JPMorgan s other businesses did well. And with a much stronger balance sheet than its crosstown rival, it s better placed to take advantage of troubled markets.
Crude benchmark distorts economic reality 17 Oct 2007 Oil market bulls say $90 oil is due to tight supplies. But the only place that has seen a big drop lately is the futures market s delivery point. This has driven the price of oil futures to record levels. But oil tanks worldwide are overflowing. The price of oil should be a lot lower.
Critic’s retreat a Pyrrhic victory for Sulzbergers 17 Oct 2007 Morgan Stanley, the most vocal shareholder critic of their stewardship of the New York Times, just threw in the towel. But that doesn t solve their problems. The family is still stuck with a declining asset. And if other investors follow suit, the stock could suffer more.
What the G7 should do about the credit crunch 17 Oct 2007 There are two main lessons: ignore asset price inflation at your peril, and make sure banks have enough liquidity. There are also two things the G7 shouldn t do: regulate hedge funds or ratings agencies.
Ousted BAE chief wins battles, loses war 16 Oct 2007 Mike Turner managed to rebuild the UK defence group s tattered relations with customers, and grow in the US. BAE s shares have quadrupled in five years. That may have won over shareholders but not the board. They may hope that ousting Turner will help distance the company from the alleged bribery that has dogged it in recent years.
SEI’s hybrid asset management model offers stability 16 Oct 2007 So far, asset management stocks have weathered the credit crunch rather well. Shares of SEI Investments have lagged the group. But with its mix of asset management and fund services revenue, SEI may prove a relatively safe haven if troubles return.
Sonepar signals readiness to pay more for Hagemeyer 16 Oct 2007 The secretive French electrical parts group has been buying shares in the market at a premium to its E4.25 a share indicative offer. Its Dutch target may be right in saying the offer substantially undervalues the group.
Staples shouldn’t suffer from US housing woes 16 Oct 2007 Investor worries over housing and consumer spending appear to have spread to purveyors of pens and paper. This looks a bit extreme. Office suppliers like Staples will suffer if the economy weakens, but not as much as some fear. And the bad news appears to be priced in already.