Norman brings ITV debacle towards respectable end 18 Nov 2009 The turnaround maestro has been named chairman of the troubled UK broadcaster. The choice is a surprise, but a happy one. Norman faces a tough job, but investors should take comfort from his record at Asda and Energis and his ties to the Conservative party.
Bank of England still fears a Japan-like UK 18 Nov 2009 The central bank s Monetary Policy Committee was split earlier this month. The chief economist worries about bubbly asset prices. But for other members, postbubble deflation is the main fear. Japan s weak growth and spiralling debt shows the danger.
UK’s new fiscal rules are more fudge 18 Nov 2009 The government plans legislation to cut the deficit in half in five years. That s a worthy enough goal. But Brown probably won t be PM in five years and the law won t carry any sanctions if the target isn t met. There s a better way to provide fiscal credibility.
Only time can restore Goldman’s old aura 18 Nov 2009 Its $500m plan to support 10,000 US small businesses alongside Warren Buffett is praiseworthy. But $16.7bn in accrued pay and continuing rumblings of bailout favouritism risk making it look nothing but a PR gesture. Public opprobrium will fade; Goldman just has to tough it out.
Not everyone can do a Canon 17 Nov 2009 The Japanese group is offering a juicy 70% premium for the Dutch Océ. That makes bids for Cadbury and Dragon Oil look paltry. But merger arbs shouldn t get their hopes up. Canon has good reasons to be generous. Others needn t and won t rush to follow its example.
British Land’s merits look underplayed 17 Nov 2009 The UK commercial property group s results are the latest evidence of the realestate recovery. With the sector trading above book value, British Land s sticky rental contracts make it relatively attractive. If it spends its £1bn war chest wisely, that should be reflected.
Cable & Wireless demerger comes to life 17 Nov 2009 The UK telco has clarified management and the carveup of pension liabilities for its forthcoming separation. It is also launching a £200m convertible to smooth the transition to separate capital structures. At last, this longawaited demerger looks credible.
Threat to independent FASB is danger to investors 17 Nov 2009 A US congressman wants bank regulators in charge of accounting standards. That suits those bankers who blame marktomarket accounting for the 2008 meltdown. But accounting merely exposed mistakes banks had made. Investors need independent standards, not regulatory coverups.
UBS drinks from death well for new life 17 Nov 2009 The Swiss bank has been stabilised and new boss Oswald Grübel is now setting targets. He reckons UBS can get back to its 2006 profit levels in three to five years. But the rebound hinges on fixed income, which buckled the bank. No wonder investors are wary of pricing in success.
Can a poison pill be good for shareholders? 17 Nov 2009 Restrictions to thwart takeovers usually benefit managers, not shareholders. Mead Johnson may be an exception. The baby formula maker should make a tasty target. But the technicalities of Mead s ongoing splitoff from BristolMyers mean it may make sense to delay any auction.
Lazard opts for culture carrier to replace Wasserstein 17 Nov 2009 Ken Jacobs may not be as prolific a dealmaker as Bruce Wasserstein was or even as Gary Parr is today. But he has long been part of the glue that binds the historically fractious firm. Naming him as CEO is a sensible move to assure continuity.
Ousted GMAC boss should consider silver lining 17 Nov 2009 Al de Molina must feel aggrieved to lose his job. But his replacement, Michael Carpenter, oversaw Kidder Peabody s demise and helped build the monster that became Citigroup. If he can make a comeback, de Molina, whose main fault seems to be outspokenness, should have no trouble.
Central banks shouldn’t ignore asset prices 17 Nov 2009 A few years ago, monetary authorities claimed bubblepricking was not their job. Despite the worst recession in decades, the Fed s Kohn still believes that. He should think again. Rapidly rising asset prices are usually a reliable sign the financial system isn t working right.
China pot calls US kettle black on carry trade 16 Nov 2009 A top regulator called ultralow US rates a global risk. True, but China s own pegged exchange rate generates a flood of dollars, which helps keep US yields down. And a big domestic stimulus is pushing up Chinese asset prices. The US has no monopoly on inwardlooking policies.
Vivendi beats Telefónica in Brazil – at a price 16 Nov 2009 The French media group won control of Brazilian telecom upstart GVT. It will pay $4bn to enter the redhot market, having raised its offer by a third to beat out Spain s Telefónica. Brazil is an attractive market and Vivendi has telecom experience, but the price still looks high.
GM’s loan repayments are a PR stunt 16 Nov 2009 But they are still welcome. Sure, the carmaker is still losing money. But it s a much healthierlooking company with a surfeit of cash and paying back the US, Canadian and German governments will cut costs. Returning all taxpayer aid, though, remains a pipedream.
Calpers could turn PE fee talk into action 16 Nov 2009 The largest US pension fund is bothered by the fees it has paid Apollo. It has already endorsed calls for lower fees and giving investors in private equity more say. If Calpers does put the screws on Apollo, other big investors and other buyout firms won't be far behind.
Eurozone looks for a tow from stronger world 16 Nov 2009 The eurozone has emerged from recession, but largely thanks to German exports. The region has contracted twice as much as the US and still appears reliant on faraway consumers to fuel its growth. Germany s finance minister is probably right to see tax cuts as a way forward.
Greek banks need exit plan from ECB life support 16 Nov 2009 The country s bonds and bank stocks are under pressure again. The fear is that Greek lenders, loaded with highyielding government debt, have become too reliant on cheap ECB funding. Europe needs to work with Greece to plan an orderly exit from the situation.
Gold price could go much higher 16 Nov 2009 Cheap money strengthens the case for gold, and reduces the cost of holding it. Gold miners won t slow the rally. A jump in hedge fund or central bank interest would swamp annual production, worth $88bn and falling. The 20% increase since August could be only the beginning.
UK’s latest bonus attack looks heavy-handed 16 Nov 2009 The government plans to introduce legislation allowing the regulator to rip up employment contracts if they encourage excessive risk or involve multiyear guarantees. Bankers haven t earned themselves any friends. But meddling with their contracts is a worrying way to go.
Japan’s megabanks threaten capital crunch 16 Nov 2009 Mitsubishi UFJ may raise $11bn ahead of onerous new global rules on bank capital. If its two big rivals follow, some $46bn could be drained from the market, depriving others of capital. Yet it is not clear that Japanese banks really need the cash.
Citi’s EMI burden may not be so painful 16 Nov 2009 The US bank has understandably rebuffed proposals from EMI s privateequity owners to restructure its £2.7bn debt. Backing the music group just as the credit boom was ending was a bad call by Citi. But the loan may prove more harmful to the bank s reputation than its finances.
Bristol-Myers finds clever way to shrink 16 Nov 2009 The US drugs maker is offering its stockholders the chance to swap at a discount into shares of its publicly traded subsidiary Mead Johnson. That would improve Bristol s earnings per share which should come in handy with as much as 30% of its sales at risk as patents expire.
JPMorgan needs creative thinking to fold in Caz 16 Nov 2009 The US bank is to pay £1bn to buy out Cazenove, its UK investment banking partner. Caz s employee shareholders have good reason to sell out after a bumper year. But JPMorgan needs to proceed with care. A mishandled integration could make an expensive deal even more costly.
Lonmin valuation leaves little margin for error 16 Nov 2009 Investors have cheered CEO Ian Farmer, who took charge of the troubled platinum miner over a year ago amidst takeover interest from rival Xstrata. Fullyear results were greeted by a 9% share price rise. But a turnaround is now baked into Lonmin's valuation.
Return of growth doesn’t erase recession’s pain 13 Nov 2009 The eurozone has joined the US and Japan in saying farewell to quarterly GDP declines. That's an improvement on the freefall which looked possible in early 2009. But even if this still tentative recovery proves durable, the economic damage will not be reversed quickly.
Does SAC smoke mean there’s fire? 13 Nov 2009 Exemployees of Steven Cohen s $12bn hedge fund outfit are cropping up in the Galleon insider trading scandal. Cohen s firm isn t implicated. However, his aggressive style helps make him a target.
Liberty’s E4bn cable buy is peep of M&A normality 13 Nov 2009 Apollo and BC Partners ditched plans to float German cable business Unitymedia when trade buyer Liberty Global surfaced with an opportunistic bid. The private equity firms get a clean exit and Liberty buys growth without paying a fat premium. It's classic downturn dealmaking.
BA/Iberia structure is an unappealing fudge 13 Nov 2009 Like Air France/KLM before them, the UK and Spanish flag carriers have devised a convoluted structure to circumvent regulatory hurdles. The snag is that neither party has real control. Extracting the claimed E400m of synergies will be tough. This deal is off to a bad start.