Get ready for EBITDAPO 28 Jun 2010 That s how bankers are valuing General Motors planned share sale. The metric is usually used for distressed firms PO stands for pensions and other obligations like healthcare. Wheeling it out for GM s IPO is a reminder that last year s bankruptcy was not a cureall.
Goldman still rules the roost on giving M&A advice 25 Jun 2010 Despite SEC accusations and plenty of bad press, dealmakers at the much maligned firm are thriving. Goldman topped Q2 worldwide M&A league tables. But it's the business the firm is, or is not, winning right now that will determine whether it remains at the top of the heap.
UK banks should sacrifice margins for safe funding 25 Jun 2010 The industry needs to refinance almost 800 bln pounds of wholesale financing by the end of 2012. At the current run rate, a squeeze looms. Lenders can't count on the Bank of England to extend its liquidity support. They would be better off paying up for longterm funding.
U.S. financial reformers hang tough to bitter end 25 Jun 2010 Even at the final hour, big banks hoped Congress would pull its best punches. But the regulatory reform bill agreed early on Friday by House and Senate negotiators lands solid blows. Though no knockout, it looks set to constrain Wall Street banks' risktaking and profit.
G20 will not fracture despite many divisions 25 Jun 2010 The nations represented in Toronto are split in many ways: fiscal policy, level of wealth, demographics, as exporters and importers of resources. But all the leaders crave peace and prosperity above everything else.
G20’s regulatory revamp needs a shot in the arm 25 Jun 2010 Countries are increasingly acting alone on issues like tax, proprietary trading and shortselling while coordinated rules are at risk of being delayed. As the G20 gathers in Toronto, Peter Thal Larsen assesses the state of global reform.
E-book market will be hot, flat and crowded 25 Jun 2010 A price war has broken out among producers of digital ereaders thanks to Apple's success with its iPad. Companies like Amazon hope selling tomes across multiple devices will fill the profit gap. But competition in ebook distribution could pressure margins there, too.
Telefonica shows PT it means business 24 Jun 2010 The Spanish operator's sale of an 8 pct stake in Portugal Telecom via equity swaps was driven by the fear it wouldn't be allowed to vote the shares in a ballot on its 6.5 bln euro bid to buy out PT's of the Brazilian mobile JV. Telefonica's move is clever, but a little risky.
Russia’s cheap stocks look tempting 24 Jun 2010 Russia s stock market has languished this year, as investors took fright over events in Europe. While this lacklustre performance mirrors other emerging markets, Russia is now around 40 percent cheaper on a priceearnings basis. Investors who dally could miss a bounce.
Bond investors have upper hand in covenant fight 24 Jun 2010 European bond investors are again calling for tighter covenants from corporate issuers. Previous attempts have foundered. But regulatory changes and a weaker banking sector put bondholders in a better position to win concessions.
Supremes make nabbing white-collar perps harder 24 Jun 2010 It s already tough for prosecutors to credibly finger individual executives. The top U.S. court just made it harder by narrowing a law used against Enron s Skilling and Hollinger s Black. Those hoping bank bosses go down for the financial crisis shouldn t hold their breath.
Keynesian-austerity dilemma can’t be resolved 24 Jun 2010 Last year the G20 went for Keynesian stimulus, but excessive debt now makes that unsustainable. This weekend in Toronto, most nations apart from America will advocate orthodox deficitcutting, but that will damage growth. There are no practical ways to square this circle.
Hasbro may not be most profitable LBO plaything 24 Jun 2010 By the numbers, the Mr. Potato Head maker isn t an ideal buyout target. It has iconic kids brands like PlayDoh and Transformers, but the seasonality of the toy business would make it expensive to finance without Monopoly money. Even with big cost cuts, returns would be light.
U.S. bank reform takes a turn for the tougher 24 Jun 2010 Industry lobbyists hoped the financial overhaul would soften in the final stages. Instead, a flurry of profitcrimping provisions has popped up in the final hours. Those who feared that drawnout negotiations could bring legislation damaging for the banks may have been right.
Good economy didn’t save Australia’s Rudd 24 Jun 2010 The prime minister was forced to fall on his sword even though the global recession passed Australia by. His lack of charisma played a role, as did botched policies and a divided economy. The miners will be happy to deal with someone new, but their taxes are still likely to rise.
Resolution lays down gauntlet on UK rights issues 24 Jun 2010 The UK insurer persuaded half its shareholders to support its 2 billion pound equity offering in advance, reducing the deal s fees by 1015 million pounds. As the UK competition watchdog launches its inquiry into share issues, banks, investors and companies should all take note.
Vince Cable may prove to be Murdochs’ nemesis 24 Jun 2010 The UK's new business secretary has the power to derail Murdochcontrolled News Corp's 12.3 bln pound plan to take over all of BSkyB. He also has an incentive. The Murdoch press vociferously backed the Conservatives in the recent election but trashed the Lib Dems.
Cutting leaders must be bold, fair – and lucky 23 Jun 2010 The UK government, like its counterparts in troubled euro zone countries, is cutting spending hard. Can cutting leaders survive and be appreciated? History's lessons are mixed. Fairness helps. Policies that are quick to work help even more. Luck plays its part.
Oprah not the answer for Goldman 23 Jun 2010 Talk shows just might help get the embattled Wall Street firm s message out. But while boss Lloyd Blankfein is more likeable than some on Main Street might think, the obvious questions lack easy answers. Goldman s best bet with BP s accidental help may be to tough it out.
Oil-drilling moratorium remains justifiable 23 Jun 2010 The more the Gulf spill looks like BP bungling, the harsher it may seem to punish its peers. But Obama s drilling pause still makes sense despite hitting a legal snag. Oil groups need better spill plans and the regulator an overhaul. A little less crude is a small price to pay.
UK bank tax could raise more than expected 23 Jun 2010 Britain's new balance sheet levy should raise most of the projected 2.5 bln pound proceeds from the big five UK banks. The government may assume that smaller balance sheets and double taxation deals will reduce its take. Or maybe, as with the bonus tax, it is being cautious.
Wal-Mart would be welcome entrant to U.S. banking 23 Jun 2010 The big box giant has the power to restore competitive metabolism to the concentrated U.S. credit card market and high fee retail banking sector. Though it withdrew a bank application in 2007, the group is forging ahead in Mexico and Canada. New rules shouldn t cut WalMart out.
Tax doesn’t matter much if you’re rich enough 23 Jun 2010 Wouldbe billionaires often say they're discouraged by high tax rates. That's not what the latest World Wealth Report shows. Low tax countries don't always have many very rich people. The recipe for growing millionaires has two economic ingredients: high savings rates and time.
BP asset sales needn’t kill value 23 Jun 2010 The UK oil major could sell $10$20 bln of mostly upstream assets to help pay for the leak in the Gulf of Mexico. Fortunately for shareholders, it is easy to identify assets that aren't strategically essential and which may also attract rich buyers.
There’s no reason to rush a GM IPO out the door 22 Jun 2010 The CEO is pressing full speed ahead on getting the government out of the carmaker. But GM, with its troubled European exposure and middling domestic performance, doesn t look ready for public consumption. Better to wait than risk a botched debut with a halfbaked story.
Carlyle’s Washington connection keeps paying off 22 Jun 2010 The $300 mln IPO of defense services contractor Booz Allen looks like a home run for the private equity firm, as Uncle Sam's outsourcing has bolstered its business. If valued in line with what Carlyle paid, it will make almost 2.5 times its investment in just two years.
How does Jefferies shine so bright on Wall Street? 22 Jun 2010 The secondtier firm trades at 1.7 times book value, way ahead of bigger rivals including Goldman and Morgan Stanley. Expansion is paying off for now as is shelter from new regulations. Add a fresh results schedule and some double counting, and the spotlight belongs to Jefferies.
Bonds-for-tax could help Japan out of a hole 22 Jun 2010 Funding big deficits with bond issues has worked so far, but will get harder as Japan ages. Prime Minister Kan's plan to hike taxes instead, starting with VAT, looks more sustainable. Such a transition involves pain, but it will spare Japan greater discomfort later.
Obama needs super-salesman as next budget guru 22 Jun 2010 Peter Orszag didn t want the job as Obama s budget chief. His successor should be just as reluctant, having to deal with the aftermath of the stimulus and healthcare plans. Making deficit numbers add up will be hard selling them to Congress, voters and markets even harder.
Yuan adds fuel to overheating AgBank IPO 22 Jun 2010 The Chinese lender is becoming a mustbuy, but not because of its financials. Local mutual funds covet its millions of customers. Strategic investors want to earn Beijing's favour. Now currency reform has boosted all bank stocks. AgBank may get a higher price than it deserves.