Neil Unmack is a Reuters Breakingviews Associate Editor based in London. He covers credit markets, hedge funds, and Italy. Previously he was a corporate finance reporter at Bloomberg News in London. He started his career as a financial journalist in 2001 at Euromoney Institutional Investor, where he covered structured finance for EuroWeek magazine. He was educated at Eton College and Oxford University, graduating with a first class degree in modern languages.
The embattled fund manager named Keith Skeoch as sole boss, ending its controversial co-CEO structure. But Martin Gilbert stays on as senior executive and vice chairman. With its 552 bln pound asset base still shrinking and the dividend insecure, governance remains suboptimal.
Merging the two sickly lenders would give the bank run by Christian Sewing access to Commerzbank’s deposits, and cheaper funding. But he might need to raise fresh capital. While shareholders may have to wait for a decent return, bondholders can hope for immediate gains.
The UK engineer, which swallowed 8 billion pound rival GKN last year, boosted sales and margins without slashing investment. Still, the sluggish car industry could challenge Melrose’s “buy, improve and sell” model. Investors will need to see more evidence of improvement.