Buffett’s banker may come in handy for Coty 3 Apr 2012 The perfume maker will have to sweeten its offer from $10 bln to, say, $11.6 bln, to woo resistant Avon. That would mean $5 bln of equity, after factoring in debt and synergies. Byron Trott, a Coty adviser, might need to call in some favors, perhaps even from his biggest fan.
Gun bubble reloads on Obama re-election fears 3 Apr 2012 The president’s 2008 victory triggered massive growth in firearms sales. Purchasers thought strict gun control legislation was coming. It never arrived, and weapon sales tumbled. Yet the prospect of a second Obama term is boosting sales - and shares of gun-makers - once again.
Not all IPOs are about smart money cashing out 3 Apr 2012 Biotech firms exist in a topsy-turvy universe where early backers actually buy up large chunks of additional stock when their companies go public. In theory, that may sound like a refreshing alternative to hot Internet deals like Facebook. But caution is nonetheless warranted.
BSkyB better off without Murdoch in chair 3 Apr 2012 Murdoch Jnr’s decision to jump before he might have been pushed means the pay-TV group finally has an independent chairman. The sale of News Corp’s stake in BSkyB is unlikely, though no longer unthinkable. The same goes for replacing Murdoch Snr as the parent company’s chairman.
JPM insider non-trading case puts banks on notice 3 Apr 2012 Britain’s regulator has fined Ian Hannam for sharing price-sensitive information about a client. The penalty looks harsh since the JPMorgan dealmaker’s slip was accidental and nobody traded on the tip. Even if Hannam wins his appeal, advisers may have to re-think how they work.
Molson runs up big tab for emerging markets light 3 Apr 2012 The North American brewer will pay $3.5 bln to enter central Europe. Savings are limited, the seller is probably making a packet, and Molson outbid a Japanese rival: all worrying signs. But while the region doesn’t promise huge growth, the prospects are better than home.
Europe unrecognizable from U.S. Republican rhetoric 3 Apr 2012 Mitt Romney and Rick Santorum accuse Obama of leading America to “European-style socialism.” The pejorative works to a point but conveniently overlooks German trade surpluses, Dutch unemployment and Polish growth. GOP hopefuls might aspire to some of the continent’s achievements.
EU banks should disclose ECB earnings boost 3 Apr 2012 Some lenders are enjoying a temporary uplift from buying high-yielding sovereign debt financed by the central bank’s cheap three-year loans. Banks are reluctant to spell out the extent of the improvement. But as first quarter results approach, investors should demand clarity.
Prestige and power fuel Qatar’s frantic shopping 3 Apr 2012 The tiny Gulf state is racking up stakes in European big names. Since Qatar will generate around $50 bln of spare cash this year, this is likely to continue. There may be some apparent logic to the pick n’ mix of value and vanity investments. But it doesn’t look like a strategy.
Bank of Japan divisions point to stronger yen 3 Apr 2012 The bank talks about fighting deflation, but has done relatively little. Replacing two board members with inflation doves when the seats open on April 4 won’t end the impasse. As long as fears of higher borrowing costs stop the BoJ from printing money, the yen will defy gravity.
Goldman follows board stitch-up with smackdown 2 Apr 2012 The Wall Street firm just avoided a push to split the chairman and CEO roles by simply renaming its top director. Now it has given the job to the wrong guy. James Schiro is already on the board, and his record hardly proves he’ll ask tough questions. Goldman isn’t getting it.
Quality of life may one day dethrone NY, London 2 Apr 2012 They’re still the most global cities, A.T. Kearney reckons, with Paris and Tokyo next. But Vienna, rated only 13th among global cities, tops Mercer’s quality of living list. As technology makes location less critical, life quality may matter more. Auckland or Vancouver, anyone?
J.C. Penney CEO poorer than if he’d stuck at Apple 2 Apr 2012 Ron Johnson, the man behind Apple’s retail stores, got a $53 mln signing bonus at J.C. Penney in November. That might seem a lot, but it covered less than two-thirds of the stock he gave up. Throw in Apple’s share price run-up since then, and Johnson is out around $60 mln.
U.S. lawmakers talk discipline but still love pork 2 Apr 2012 A gridlocked Congress is rethinking its ban on earmarks. Bringing back this form of wasteful spending might grease the wheels of compromise. But it would also show that fiscal responsibility is a Washington mirage - until market forces make austerity the only option.
Avon’s hapless board opened door to Coty’s bid 2 Apr 2012 The cosmetics group rejected the $10 bln offer but will struggle to convince shareholders it has attractive alternatives to the LBO-like bid. Fealty to CEO Andrea Jung did less for Avon than Coty accomplished in a morning. It’s a useful lesson for pliant directors everywhere.
Corporate cash surplus will be easy to misspend 2 Apr 2012 Large companies are sitting on spare cash, generating more, and are able to borrow cheaply. Where will it all go? Overly stringent investment hurdles will sadly deter investment spending. Though U.S. tax policy is a deterrent, financially driven M&A and buybacks are more likely.
EU fine print could give hedgies a new fright 2 Apr 2012 The latest version of Brussels’ alternative investment directive may lift the bar for regulating managers hoping to raise funds in Europe. That could limit investors’ choice, hurt managers based outside the EU and revive a transatlantic row that was buried two years ago.
UK government faces tough N-power choices 2 Apr 2012 Two German utilities’ withdrawal from Britain’s Horizon nuclear project is a blow to the government’s clean energy ambitions. It needn’t be a fatal one, but policymakers face some politically unappetising choices if they want new nuclear capacity to be built.
KKR picks an odd time to go to the mattresses 2 Apr 2012 A nightmarish run has destroyed 90 pct of mattress-maker Sealy’s value since its 2006 IPO. An activist wants to shake the slumbering board, which kept paying fees to the LBO firm even as its stake fell to under half. At this stage, KKR might do well to embrace a new bedfellow.
Hugo Dixon: Euro zone should beware the "F" word 2 Apr 2012 Political leaders and the ECB have bought the time needed to resolve the euro crisis. But there are signs of fatigue. A renewed sense of danger may be needed to spur policymakers to address the region’s underlying problems. It would be better if they got ahead of the curve.
Temasek on top in SE Asia bank stake swap 2 Apr 2012 The Singaporean fund will exchange its stake in Indonesia’s Bank Danamon for an enlarged slice of DBS, a bigger lender based in its home state. The price is high and there are integration dangers for DBS. But if all goes well, Temasek will enjoy a windfall of almost $2 billion.
BP has yet to deliver its positive Macondo legacy 2 Apr 2012 The Gulf of Mexico disaster prompted soul-searching and a wide-ranging review of BP’s sprawling portfolio. The pledge was to divest low-return assets and focus on its core competence in exploration. But two years on and it’s clear the strategic renewal is proving a long slog.
Myanmar vote doesn’t give clear win to investors 2 Apr 2012 Aung San Suu Kyi’s by-election win is a big step to democracy, which may bring the end of sanctions. The simultaneous freeing up of the exchange rate is a step to a market economy. But the path to democracy is still uncertain and Suu Kyi’s views on foreign investment are unknown.
India can’t afford a foreign investment collapse 2 Apr 2012 If the latest tax spat goes beyond sulking and investment actually starts to freeze up, India could face a balance of payments crisis. A coordinated letter from international trade associations is as much a rallying cry to investors as it is a message to the Indian government.
Next boss of 3i deserves a hearing 2 Apr 2012 Activists investors want decisive action to close a yawning discount to net asset value at the private equity firm. Other investors are reportedly musing about winding up the now-leaderless company. But whoever becomes CEO should get a chance to outline a convincing strategy.