Nordic merger underlines limits to postal freedom 7 Apr 2008 The Swedish and Danish post offices are responding to EU deregulation by joining forces. But politics rules out tough moves such as shutting sorting centres. And the liberal Scandinavians are ahead of the postal pack. Southern Europeans can only dream of being so lucky.
Microsoft calls time on Yahoo dithering 7 Apr 2008 Yahoo s board has yet to make a persuasive case for rejecting Microsoft s $44.6bn bid. Now, Microsoft threatens to lower its bid if it isn t accepted in three weeks. Both sides may be engaging in a bit of histrionics, but this ups the pressure on Yahoo.
Setanta’s £1bn price tag proves just too greedy 7 Apr 2008 The Irish statellite broadcaster's investors stood to double their money in two years if they found a buyer at the mooted £1bn asking price. It was a nice try. But with Setanta's lucrative UK football rights up for auction this year, no wonder bidders melted away.
UBS needs a strong new chairman 7 Apr 2008 Peter Kurer, the general counsel who is being put up to replace outgoing Marcel Ospel, isn't obviously the right man for the job. UBS needs to demonstrate that he is before this month's AGM.
Banks shouldn’t get taxpayers’ money 7 Apr 2008 The IMF boss s call for public money to rescue banks should be resisted. Such bailouts intensify moral hazard, lead to excessive political control of finance and represent redistribution from poor to rich. The odd bankruptcy is healthier for banks and the economy.
Mooted EDF-Centrica tie-up underlines EDF need for allies 4 Apr 2008 The French electricity giant has plans for foreign expansion but is afraid its stateowned status won t make it welcome in Europe. That s why it needs local allies like Centrica of the UK to take over British Energy, or ACS of Spain for a potential bid for Iberdrola.
Gala private equity recap shows co-investment pitfalls 4 Apr 2008 Private equity firms pitch coinvestment to clients as a privilege. But there s a catch. Look at Gala Coral, whose owners just had to inject £125m extra cash. Coinvestors aren t obliged to stump up too but if they don t, they could lose a disproportionate share of the spoils.
Lehman borrows tarnished structure to offload hung loans 4 Apr 2008 The firm s Freedom CLO uses the same technology that ignited the buyout debt boom. But now, it s being used to clean up the rubble. It may limit Lehman s losses and, if defaults in the portfolio are modest, it could give the firm a windfall.
CBS and Viacom should get back in bed 4 Apr 2008 CBS is getting into the cinematic territory of its former parent and the two are competing for assets. Sumner Redstone should just admit he goofed in breaking the two up. It would be better for shareholders of both firms if managed as one group without his erratic intervention.
Where are the missing iPhones? 4 Apr 2008 Apple sold 3.6m iPhones last year but its partners only registered 2.3m customers. Meanwhile, US retail stores are running short of the hit handsets. Apple could be running down stocks ready for a new model. But equally, free trade also known as smuggling could be to blame.
Crisis gives ex-bosses a new perspective on past 4 Apr 2008 When Luqman Arnold ran UBS and John Reed dominated Citigroup, they didn t focus on the difficulty of combining boring and exciting banking businesses. In hindsight, the pitfalls are painfully obvious. But such cultural messes are easier to get into than to resolve.
Liquidity risk can’t be regulated away 3 Apr 2008 The SEC s boss supports tweaking capital rules to cover liquidity risk. But Bear Stearns collapse shows how lightningfast a liquidity crisis can strike. It s unlikely a bank could act fast enough to raise capital when its counterparties are running for the exits.
ATA is toppled canary in low-cost airlines’ coalmine 3 Apr 2008 The carrier s bankruptcy highlights the big risks other discount airlines face. Record fuel prices, older, gasguzzling jets and a slowing economy weighs on the whole sector. If fuel prices continue to rise, ATA s competitors could soon be in trouble.
Gazprom’s North African push underlines production problem 3 Apr 2008 The Russian gas monopoly will get a stake in Libyan gas fields after swapping assets with ENI of Italy. More than just another power play, this is mostly a sign of Gazprom s need for new resources after failing to invest enough in research and production in the last few years.
Germany loses its way on Landesbank rescues 3 Apr 2008 WestLB and BayernLB are being let off too lightly for their combined E47bn of risky credit bets. The states are underwriting the ringfenced troubled assets, allowing the banks to remain predators. That may jeopardise a chance for a muchneeded banking shakeup.
China’s Hong Kong ‘through train’ looks derailed 3 Apr 2008 Despite Paulson s insistence, the crash in Shanghailisted stocks makes it hard for Beijing to move ahead with crucial reforms, such as the throughtrain of Chinese money to Hong Kong. Investors are already hurting adding more pain puts China s nascent equity culture at risk.
Stock picking may come back in fashion 3 Apr 2008 In a panicstricken market, there's little to be gained by looking at the fundamentals. But correlations among individual stocks appear to be falling from their peak levels. That's hardly a cure for the market's woes, but it's good news for stock pickers.
Kerviel mans the barricades for workers’ rights 3 Apr 2008 The SocGen trader, whose fake hedges lost his employer E5bn, says he is being fired illegally. The bank, he claims, didn t supervise him correctly. It sounds a bit rich, but the case will only help cement Kerviel s reputation as an anticapitalist antihero.
Even with $100 oil, Venezuela may be running low on money 3 Apr 2008 Venezuela's new windfall profits tax shows the government's cash crunch is intensifying. And while its plan to trade the bolivar openly will help the economy, it will make hiccups embarrassingly visible. With inflation rising, the oil goose may be running out of eggs.
Expedience jeopardises a simple housing fix 3 Apr 2008 Letting US bankruptcy courts adjust mortgages just like other loans would help hardesthit borrowers those braving personal bankruptcy. It would cost the government nothing, and could help lenders. But with Congress compromising in pursuit of speed, the idea has been shelved.
Berlusconi to blame for Alitalia fiasco 3 Apr 2008 Air France has walked away after unions torpedoed the deal. They had no incentive to accept job cuts, once the opposition leader in a naked bout of electioneering pledged to veto any deal and come up with an Italian solution. Realistically, that means bankruptcy.
Hedge fund woes will get worse 3 Apr 2008 Polygon, Plexus and Russell are the latest hedge funds to suffer mass redemptions but they won t be the last. Runs on funds are a rational response to poor performance, illiquidity, investor risk aversion and a fear of being last out the door. There will be more casualties.
Credit squeeze starts to bite UK 3 Apr 2008 The Bank of England s latest credit report is positively menacing. Banks have tightened credit and will tighten more. Consumers are being forced towards unsecured lending. The jaws are closing around the UK economy. Rate cuts seem certain, but not sure to stop the squeeze.
Tesco should come clean over US 2 Apr 2008 The UK retailer has pinned a lot on Fresh & Easy, its US venture, including boss Terry Leahy s bonus. If the stores are now underperforming, as detractors claim, it should say so since this smallish investment carries a big option value.
UBS should aim to give bad bank to shareholders 2 Apr 2008 The Swiss bank is looking to hive off toxic mortgagerelated assets. It s the right way to refocus and incentivise managers of the good and bad banks. A firesale will then be one option. But a spinoff would be better as aggrieved investors could share in any upside.
Lehman sounds off-key on short sellers 2 Apr 2008 The investment bank has done a deft job tackling its real and perceived weaknesses following the collapse of Bear Stearns. But a hint of paranoia about the activities of short sellers sounds a bit whiny and suggests the firm still feels somewhat insecure.
Bernanke’s Bear bailout backing reveals Fed’s bind 2 Apr 2008 Of course the Fed chairman doesn t see it as a bailout. But he says the investment bank s problem was liquidity, not capital, and that in less fragile markets the US central bank might have let Bear go under. Such nuances highlight the challenges faced by regulators.
Sacyr spared forced E8bn cash bid for Eiffage 2 Apr 2008 The Spanish group has avoided the worst. A court has ruled it won t have to pay cash for the rest of its French rival s shares. But Sacyr is still in a bind. The lawsuits may not be over, a full share bid would be difficult, and it won t find many buyers for its 33% stake.
Investment bank boss a winner amid UBS losses 2 Apr 2008 Mega writedowns, a rescue rights issue and the ejection of the chairman may not seem good news for anyone at the Swiss bank. But they all should make life easier for Jerker Johansson, who is just two weeks into one of the toughest jobs in banking.
Germans worth their pay raises, Italians aren’t 2 Apr 2008 Public sector workers in Germany have just won a big pay deal. They deserve it. They have helped propel German competitiveness. The bad news is in Italy and Spain, where labour costs have been soaring and devaluation no longer offers an easy escape.