TDC backers conjure up clever exit strategy 25 Nov 2010 Not only are the Danish telco's private equity owners selling $2 bln of stock on the market; the company itself is buying back another $1.6 bln of shares, with the LBO houses again the main sellers. It's a neat way of getting a partial exit while releveraging the balance sheet.
Simon will have to dig deep to land UK’s CSC 25 Nov 2010 U.S. real estate giant Simon Property has made a vague approach to buy British rival CSC, just as its target is trying to buy 1.6 bln stg of prime UK retail space. CSC's standalone prospects are attractive. Simon will need to pay up to turn CSC from a buyer to a seller.
Lloyds/HBOS deal should be rethought, not reversed 25 Nov 2010 The UK bank's outgoing boss thinks the government should not unwind the crisis merger brokered by the previous administration. Reviving HBOS's twitching corpse may not be possible or desirable. But shrinking the bank's market share is still necessary to improve competition.
Seaweed boom shows China’s inflation challenge 25 Nov 2010 After garlic and green beans, seaweed is now the latest food hit by Chinese inflation. Natural factors and economic development have played a role. But too much money is another culprit. A stranger symbol of the boom is hard to find. The pressure for more tightening is mounting.
Happiness index must be quantitative and broad 25 Nov 2010 David Cameron has launched a national debate on ways to measure UK wellbeing. He's right that economic development cannot just be measured in money. But to succeed where others have failed, the indicator should be modelled on respected series of data like the retail prices index.
SAP could lose more than $1.3bln on Oracle verdict 24 Nov 2010 The German software group must pay its U.S. rival the huge sum after infringing copyrights. Even though the figure may shrink on appeal, the case will hurt SAP's bottom line, business and reputation. Meanwhile, Oracle's Larry Ellison is laughing all the way to the (data) bank.
Korean attacks offer warning but not yet crisis 24 Nov 2010 Asia's markets aren't pricing for nuclear war after North Korea opened fire on the South. China, which has the most influence over the hermit state, has good reason to prefer stability. But reopened political fault lines make financial and economic accord all the more important.
Russian stocks not as cheap as they seem 24 Nov 2010 A record 40 percentplus discount to other markets makes them look like a steal. But most of the gap is accounted for by the oil and gas industry, where high taxes and somewhat creative accounting explain low valuations. Other sectors aren't showing such large discounts.
Tiffany’s sparkle speaks against economic relapse 24 Nov 2010 Europe may be burning and the U.S. smoldering, but the comfortablyoff are splurging on their blueboxed trinkets. Tiffany s thirdquarter sales surge and bright outlook suggest that wellheeled and aspirational consumers aren t anticipating another painful downturn.
Chrysler Financial may bring Cerberus consolation 24 Nov 2010 The lender is winding down its autos business and its midmarket banking unit is embryonic. For its private equity owner, mauled by its Detroit bets, breaking even is out of reach. But Cerberus may recoup a few billion dollars a better end to its Motown adventure than nothing.
Contagion may force ECB to get its hands dirty 24 Nov 2010 One ECB policymaker has been talking about further exit from extraordinary measures. That sounds badly out of tune. If contagion from the Irish crisis keeps spreading, Europe's central bank may have to intervene and start bond buying, says Neil Unmack.
Irish bank restructuring has tidy if slow solution 24 Nov 2010 Dublin has two big banks with liquidity problems, and two smaller ones with deposits and little else. Rejigging the liabilities could give giants AIB and Bank of Ireland safer funding profiles. And a bailout would provide time to shrink their balance sheets in an orderly manner.
How the system could turn on itself 24 Nov 2010 One lesson of 2008 was that selfprotective mechanisms like margin requirements and credit insurance could inadvertently amplify risk in the financial system. As the euro zone crisis spreads, these poorly understood tools may be fuelling contagion.
Airgas bosses score a Pyrrhic victory in courts 23 Nov 2010 A shareholder vote making the firm more vulnerable to a takeover by Air Products has been overturned. Investors wiped more than $300 mln off Airgas value. Rather than the victory for shareholders claimed by the Airgas chief, that looks like a setback for corporate democracy.
BP’s PR sludge keeps flowing with new book 23 Nov 2010 The oil giant may have felt the PR tide was turning in its favor. Probes into its Gulf spill have so far found no direct proof that BP costcutting caused the disaster. But the reprieve may be cut short by Houston Chronicle writer Loren Steffy s deeply critical history.
German hardline is hurdle for EU-IMF Irish rescue 23 Nov 2010 Berlin is still insisting on a hike in corporate tax as a condition of any Irish bailout another sign of tension in the EUIMF mission to Dublin. A hard line on the budget might help convince markets. But taken too far, it could compromise growth, and fuel antiEU sentiment.
Equities and euro vulnerable as global risk flares 23 Nov 2010 Korean hostilities add to a growing list of negatives. The twoweek wait till Ireland's budget vote will be nervy for the euro zone. China is raising reserve requirements. Equities and the euro are showing their vulnerability. As the yearend approaches, investors may step back.
Four events Spain doesn’t want to happen 23 Nov 2010 Spain may be safe from debt crisis contagion if it stays its course. But an unexpected event throwing doubt on the true state of the country's finances could precipitate the mother of all bailouts. Here are four of the unpleasant surprises that could trigger a meltdown.
Dynegy treads a risky path in spurning Blackstone 23 Nov 2010 Investors may feel vindicated rejecting the buyout firm s $4.7 bln bid at the nadir of the energy cycle. After all, the share price hasn t halved, despite management s warnings. But by showing Blackstone the door, they are making a highly leveraged bet on rising gas prices.
Pensioners and markets clash over ultimate haircut 23 Nov 2010 European countries might squabble over bailouts for their weaker members, but retirement promises will eventually make even the strongestlooking euro zone members look shaky. The big political question is whether bondholders will share the pain that pensioners are bound to feel.
Has private equity run out of targets, or ideas? 23 Nov 2010 That s a legitimate question now that TPG is diving back into J Crew with a $2.8 bln buyout just 19 months after cashing out of the clothing retailer. Sure, TPG knows its new charge well, and shareholders may profit nicely. But it smacks of a dearth of broader opportunities.
Too big to fail alive and well in U.S. banking 23 Nov 2010 The DoddFrank bill was supposed to change all that by making big banks less exciting and safer. But the FDIC s latest quarterly figures show the funding advantage of the biggies over tinier rivals hasn t changed. If it stays that way, say goodbye to the small town banker.
Investors rightly bypassing C3POs for IPOs 23 Nov 2010 Buyout firms have a backlog of companies they want to resell to public markets. Most aren't new or even renewed, like GM. Many, like Harrah's, are indebted and offer little growth. But investors can distinguish a seethrough public offering, or C3PO, from a solid IPO.
Europe’s bailout bazooka isn’t out of ammo – yet 22 Nov 2010 When Europe unveiled a bailout bazooka in May, the hope was that it would never be be fired. Now Ireland is set to take 90 bln euros. In theory, the bailout fund could handle Portugal's and even Spain's mediumterm financing needs. In practice, that might not halt a crisis.
Irish politics could complicate EU bailout 22 Nov 2010 The country s prime minister has pledged to call an election after its financial rescue is agreed. However, the government may still struggle to pass its impending budget. The desire for a political fresh start is understandable. But delaying the bailout would be very dangerous.
US should pay for jobless benefits – and tax cuts 22 Nov 2010 The cost of extending jobless benefits should be offset with spending cuts. By the same logic, proponents of keeping tax cuts that would otherwise expire should suggest ways to pay for them. There are plenty of fiscal options. It s just a matter of political will on both sides.
Elliott Associates earns gavel fee on Novell sale 22 Nov 2010 The New York hedge fund bought a chunk in the software maker and pushed it into an auction with a stalking horse bid in March. That flushed out a premium, $2.2 bln offer. The market may hate legacy tech businesses, but they can be rich hunting grounds for savvy investors.
FBI takes a stab at soft hedge fund tissue 22 Nov 2010 Monday s raids of several funds offices seem to owe something to tracking the firms use of third party expert networks. These consultants risk unwittingly aiding the exchange of verboten information. So while the feds may yet come up empty, it s a reasonable place to poke.
Euro zone right to postpone day of debt reckoning 22 Nov 2010 Ireland has followed Greece in accepting a bailout, with Portugal maybe next in line. Peripheral economies may ultimately be overwhelmed by their debts. But defaulting now would risk triggering a panEuropean crisis for governments and banks. Delaying the pain makes sense.
China could fight inflation by letting money out 22 Nov 2010 Recent measures have focused on locking money up. But sending more offshore might help too, and promote healthy inflation in the West. The question is how China can encourage money to leave, especially where Chinese investors are neither willing nor welcomed.