McKesson’s $8 bln Celesio bid falls a bit short 24 Oct 2013 U.S. pharmaceutical wholesaler McKesson has struck a deal with Celesio’s owner to buy the German group in a 6.1 billion euro deal. But the 39 percent premium it implies still leaves the offer on the lower end of what minorities could expect. There may be room for more.
Credit Suisse shoved into another restructuring 24 Oct 2013 The Swiss bank’s Q3 was marred by a bigger fall in fixed income than at most U.S. peers. It is taking the axe to its capital-intensive rates trading business in response. Achieving decent returns from lower risk is a constant struggle. But reducing pay faster would help.
Santander’s capital headache starts to subside 24 Oct 2013 The Spanish bank reckons all 10 of its core markets will grow next year. The heavy lifting on provisions is over, and next year’s asset quality review shouldn’t throw up surprises. But Santander’s position under the latest Basel III capital reforms isn’t yet convincing.
Orange rally suffers reality check 23 Oct 2013 The former France Telecom had gained 38 pct in two months, before quarterly results prompted a wobble. The stock still looks cheap versus peers, so investors may see the selloff as a buying opportunity. But the discount reflects a tough and unpredictable home market.
UK risks return to 1980s labour battles 23 Oct 2013 A major chemical plant is to close after failing to resolve an industrial dispute, while postal workers are following teachers in a walkout. Job and wage flexibility have helped the UK through recession. The country cannot afford a new Thatcherite period of confrontation.
ECB’s bank review balances pragmatism and pain 23 Oct 2013 The central bank’s template for its assessment of euro zone banks’ finances looks robust inasmuch as it will help harmonise opaque and disparate balance sheets. It’s not that strenuous on capital buffers – which takes sting out of the question of who will fill the holes.
Local difficulties dent Heineken’s world view 23 Oct 2013 The Dutch brewer has centred its strategy around owning one of the few global brands in beer. Yet disappointing quarterly results reveal country-specific problems in Russia and elsewhere. Management would do well to lavish more attention on local markets.
Ferrovial hedges regulatory risk at Heathrow 23 Oct 2013 The Spanish infrastructure group has sold an 8.7 percent stake in the company that controls Heathrow to a top UK pension fund, USS. Ferrovial gets a good price and remains the airport’s largest investor. Bringing in a local partner makes sense for such a regulated asset.
Time for Reckitt to quit prescription drugs 22 Oct 2013 The household goods group is wondering what to do with its heroin substitute. A full disposal would be the best outcome. Sales are sliding, generic competition is mounting, and the business sits oddly with the rest of Reckitt. Still, the parent will be lucky to get 2 bln stg.
Blueprint for new BoE could start with rebrand 22 Oct 2013 The Bank of England has hired McKinsey and Deloitte to review strategy and operations. It’s a chance for the 319-year-old institution to review its KPIs to better leverage its USP and remotivate its key stakeholders.
Germany could afford well-designed minimum wage 22 Oct 2013 The Social Democrats want a minimum wage in Germany as a condition of governing with Angela Merkel. Launched with care, it could do some good. Safeguards should include regional flexibility and rigorous independence of the wage-setting process.
At last, central bank candour on property bubbles 22 Oct 2013 The Bundesbank says apartment prices in some German cities could be 20 pct overvalued. Policymakers usually avoid such blatant views on prices, saying distortions aren’t their problem unless leverage is a factor. That’s too narrow: central banks have a role as market critics.
Merlin has attractions for IPO investors 22 Oct 2013 A float could value the global theme-park operator at 4 bln stg, including debt. It’s spent ages backed by private equity and done lots of M&A. Yet the IPO case is solid. Growth should come from exporting proven tourist formats - such as waxworks and aquariums - to new markets.
ARM’s smartphone buying blip may be shortlived 22 Oct 2013 The UK microchip designer set new records for licences sold and free cashflow in its third quarter. Yet ARM shares fell. That is down to softening demand for smartphones. But with ARM blueprints now in all manner of devices, it has the strength to rebalance its revenue streams.
Mexico finally getting full benefit from NAFTA 21 Oct 2013 Investment in Mexican auto plants is surging, as is its share of the North American car market. Like Eastern Europe, the country is becoming a nexus of manufacturing for its richer neighbors’ markets. This, together with policy reforms, makes Mexico Latam’s brightest prospect.
Ferrero could be worth $25 bln 21 Oct 2013 The Nutella maker denied reports of a bid from Nestle and says it’s not for sale. Still, the family-owned firm boasts top brands, fat margins, scarcity value and emerging-market potential. Despite a huge price tag, one day it could fit well with the Swiss giant or another rival.
Co-op railroaded to least-bad capital structure 21 Oct 2013 The UK lender is revising its restructuring plan so creditors seize control from its mutual parent. Bondholders have successfully pushed for more long-term upside, even if this means a short-term hit. The bank loses some mutual kudos, but its parent won’t now be overstretched.
Spanish banks limp into home stretch 21 Oct 2013 The country’s lenders have already set aside nearly 190 billion euros in provisions for dud loans. Even though they may still need another 45 billion euros as bad debts climb, this should be manageable. The wheels will only properly come off if Spain’s economy stagnates.
UK’s nuclear rebirth comes at a fair price 21 Oct 2013 An EDF-led consortium will invest 16 billion pounds to build the first plant of the UK’s nuclear reset. The government will pay a fixed price for the energy produced from 2023. Investors will take on any extra cost. The deal looks balanced – barring major energy market turmoil.
Philips can only go so far with cost-cutting 21 Oct 2013 The Dutch electronics group trebled Q3 profit after slashing costs. The shares are up 25 pct since June. Yet revenue growth was tepid. The biggest of Philips’ three businesses, healthcare, looks the most infirm. Peers have done better and Obamacare reforms could pile on the pain.