UK buyouts will survive takeover reforms 28 Jun 2011 New M&A rules won't help private equity bidders in the London market especially when there are leaks or when targets resist. But buyout firms' opposition to reform sounds like special pleading. They will adapt, and investors won't be deprived of publictoprivate bids.
Don’t bank on mercy bid for C&W Worldwide 28 Jun 2011 Shares in the UK telco plunged 16 pct on its latest profit warning and the exit of its CEO. The company is often touted as a bid target for AT&T. But such hopes are quixotic. The prospects for the stock rest on the chairman, John Pluthero, restoring the group's credibility.
Asia can’t escape Euro-contagion risk 27 Jun 2011 The cost of insuring Asian debt is rising as investors ponder the implications of a potential Greek default. Not that Asia has major exposure. But it has a sweet tooth for European credit. Pain for Athens' creditors and their insurers could mean higher borrowing costs for Asia.
Greek debt plan may succeed at taxpayers’ expense 27 Jun 2011 The country's bailout hinges on banks rolling over government bonds without triggering a default. A French plan that offers lenders some collateral while pushing out debt maturities may get the thumbs up from ratings agencies. But it risks leaving the euro zone with the bill.
Connecticut suggests union concessions don’t pay 27 Jun 2011 The Nutmeg State took a balanced approach to its budget woes by raising taxes and asking employee unions to sacrifice. Their failure to ratify the deal leaves the state with big tax increases that threaten to erode competitiveness. The lesson: cut first, raise revenue later.
Undead Tepco echoes U.S. housing zombies 27 Jun 2011 Japan's giant utility faces huge but undefined liabilities. Shareholders meeting on Tuesday have lost 85 pct since March's earthquake caught them unawares, as the U.S. housing crunch did Fannie and Freddie's. A big question is whether Tepco's future involves shareholders at all.
Wall Street may get temporary stay of execution 27 Jun 2011 With trading revenue falling, pressure is growing for investment banks to trim costs. But none wants to join those who slashed their ranks ahead of a turnaround. It may take another few months of bad numbers until they start showing traders the door.
TPG pays up to end ugly Russian conflict 27 Jun 2011 The U.S. private equity group looks set to end a battle over Lenta, a Russian supermarket chain, by buying the shares of U.S. investor August Meyer. Although the end of the embarrassing conflict will be a relief for TPG, the dispute has damaged both TPG's and Russia's reputation.
HomeAway IPO too reliant on bought-in growth 27 Jun 2011 The vacation home rental listing service is the latest Web outfit seeking an outsized IPO valuation above $2 bln. The business looks solid, yet the firm has goosed expansion through M&A. Investors are hungry for growth, but they should be warier of the acquired kind.
Egypt is wrong to snub IMF and World Bank aid 27 Jun 2011 Cairo wins the popular vote by turning down over $5 bln in loans offered by Western lenders. The decision will make it more dependent on aid from undemocratic Gulf donors. It will drive up funding costs, despite mooted spending cuts. However good it feels, Egypt shouldn't say no.
Madoff trustee to JPMorgan: Don’t mess with me 27 Jun 2011 The bank tried to brush off Irving Picard, seeking dismissal of his claim that it was embroiled in Bernard Madoff's Ponzi scheme. But instead of folding, the victims' trustee tripled his bet with a $19 billion suit. JPMorgan should know by now Picard isn't going away.
Hedge funds realize baseball is too big to fail 27 Jun 2011 JPMorgan's Highbridge is the latest to bail out a struggling team. Its $150 mln loan to the bankrupt Los Angeles Dodgers follows David Einhorn's New York Mets investment. Bad finance may be hurting the game's popularity but America's pastime still looks a good longterm bet.
Global bank surcharge is just a sticking plaster 27 Jun 2011 Basel's move to force large lenders to hold more capital strengthens their defences. But the benefits of being labelled too big to fail may offset the added costs. The buffer is a temporary fix for the real problem: how to safely wind down even the biggest megabank.
Where is MAN’s defence against VW? 27 Jun 2011 The German truckmaker has mounted almost no resistance to VW's attempt to take effective control without paying a premium. Sure, Germany's lax takeover regime makes VW's assault hard to repel. But MAN's management could have done more to help investors push up the price.
How to make Greece’s opposition sweat 27 Jun 2011 Euro zone leaders want to pressure the Greek opposition into signing up to the country's austerity programme. Although it would be silly now to deny Athens bailout cash as a result of the conservatives' delinquency, Greece's lenders don't just have to roll over.
UK banks the focus for new bubble-pricking body 24 Jun 2011 Greek debt, bank dividends, and commercial property dominated the first meeting of the Bank of England's Financial Policy Committee. The body was set up to stabilise the system. But until it is given new tools, closeup bank supervision looks likely to be its main priority.
History suggests Big Tech discount could linger 24 Jun 2011 Growth at Apple, Microsoft and Google isn't reflected in their market values. The phenomenon isn't a new one. In the last 40 years, investors have twice shunned the sector for long stretches, worrying obsolescence would preempt expansion. The cycle could be repeating itself.
U.S. debt ceiling shouldn’t be hostage to taxes 24 Jun 2011 Talks to lift the limit on federal borrowing are in disarray over taxes. Republicans shouldn't fear concessions in return for major spending reforms, and the standoff may just be typical lastditch theatrics. But both parties should suffer if Congress misses Treasury's deadline.
Energy mergers frenzy takes a pause – temporarily 24 Jun 2011 The frenetic pace of oil and gas M&A slowed so far this year. Unraveling deals like Encana's tieup with PetroChina don't help. Uncertainty over the price of hydrocarbons is still the main culprit. But the global hunger for oil and gas means bankers won't be idle for long.
Prada fails to prove HK listing was worth it 24 Jun 2011 Attracting Asian capital helped the fashion house sell shares in a difficult market. But the benefits of listing in Asia end there. A lacklustre trading debut shows the buzz is hard to sustain, especially with most of Prada's investors, analysts and management still in the West.
Slo-mo activism may be Japan’s best bet 24 Jun 2011 A protest vote at electronics firm Keyence over reappointing the chairman lacks the fireworks of hedge fund TCI's assault on giant Japan Tobacco. But it is no less significant. Activism is slowly chipping away at Japan Inc to use capital more smartly. It bodes well for reform.
Intervention in oil is necessary evil 24 Jun 2011 Governments shouldn't meddle in markets. It rarely works consider the failed attempts to prop up currencies. On that basis, the IEA's release of oil is hard to justify. But commodities are pumped by speculation fed by cheap money. If a oneoff, the IEA's move is forgiveable.
China makes an uneasy saviour for Europe 24 Jun 2011 Helping fix the euro zone is writ large in Premier Wen's visit. No wonder: the single currency aids Chinese exports, buying periphery debt helps win friends on issues like the EU arms embargo. Europe's leaders won't like their China dependence, but their leverage is dwindling.
LSE wisely resists fighting too hard for TMX deal 23 Jun 2011 The UK exchange isn't offering to pay any more for its Canadian peer, but will return a bit of cash if the deal goes through. The LSE is right not to raise: this isn't a transformational combination. In any case, a higher rival offer from Maple still faces regulatory risk.
Carlyle’s RAC buy points to racier use of debt 23 Jun 2011 The U.S.based investor bagged Britain's numbertwo roadside recovery firm despite using a slimmer debt package than rival bidders. But the auction highlights how leverage for European buyouts is shifting up a gear encouraging private equity firms to pay everricher prices.
Activist Whitworth’s L-3 push tougher than ITT 23 Jun 2011 The Relational boss helped persuade ITT to split itself up, boosting its share price. But his agitation at defense contractor L3 doesn't have such a clearcut rationale. Crucially, there's little on which to hang the valuation of L3's parts usually the key to breakup gains.
Afghan withdrawal may avert fiscal war in U.S. 23 Jun 2011 Obama's accelerated troop pullout helps pave the way for a deal to raise the federal debt ceiling. The budget savings go a long way toward closing the gap between the two parties. But the unexpected windfall also lessens the pressure to address needed structural fiscal reforms.
Oil supply hike looks a last-resort stimulus plan 23 Jun 2011 The world s biggest gas guzzlers are releasing 60 mln barrels of shared reserves, even more than troubled Libya had been providing. But with other progrowth policies exhausted, bidding to push oil prices down may be one of the few levers left for worried authorities to pull.
Indonesia’s economy chugs towards gridlock 23 Jun 2011 Investors have fallen for Indonesia's resourcesled transformation. But the country is rapidly outgrowing its highways, ports and power grid. The problem isn't financing but a parliament paralysed by corruption allegations. At this rate, the growth story could come under strain.
Why the World Bank is hiring Lehman’s ex risk boss 23 Jun 2011 It might sound like a bad joke. But Madelyn Antoncic was one of the few senior Lehman execs who consistently warned the Wall Street firm's top brass the firm was taking too much risk. They ignored her then removed her. She deserves a second chance.