Old Mutual splits for good reason: it can 11 Mar 2016 The Anglo-South African financials group is breaking into four. It has that rare combination of businesses that don’t go together, a boss willing to empire-shrink rather than build, and potential hidden value. Other groups have the same problem, but lack a clear way to fix it.
Challenger bank rollup would create real contender 10 Mar 2016 Upstart UK lenders like Aldermore and Virgin Money are growing fast and making reasonable profit. Individually they are tiny next to dominant UK banks. Mashing together nine challengers, however unlikely, would create a 150 bln stg group with decent returns, big enough to matter.
Aviva investors upgrade Friends deal to so-so 10 Mar 2016 The UK insurer has said it will deliver hoped-for synergies from its late-2014 deal to buy Friends Life a year early. Its capital position is greatly improved. But a minus 12 pct total return since the deal broke implies shareholders are still waiting to be convinced.
LSE merger must please three tough crowds 9 Mar 2016 A tie-up with rival exchange Deutsche Boerse should please customers by cutting their collateral needs. But it could unsettle regulators if it sees too many derivatives being booked in one place. Squaring that circle might leave less for a third key constituency: shareholders.
Carney tests limits of central bank independence 8 Mar 2016 Appearing before UK lawmakers, the BoE governor stopped short of formally advising Britons to stay in the European Union. But Mark Carney’s message was clear enough. Central bankers are supposed to be impartial, but fake fence-sitting would have been worse.
Burberry bid would be an extravagance 8 Mar 2016 The trench-coat maker is the subject of takeover speculation but a deal, which could cost 8 bln pounds, doesn’t stack up. Its stock isn’t particularly cheap and costs are already lean. With the luxury sector deteriorating, it’s not clear a new owner could halt slowing sales.
Going nuclear still best option for EDF in UK 7 Mar 2016 The French power group lost its CFO over a plan to build nuclear reactors in Britain. The Hinkley Point project is risky and expensive, but the UK has few options if it is to meet energy demand and emissions targets. The generous terms reflect that; EDF ought to push ahead.
Old Mutual carve-up a question of when, not if 7 Mar 2016 The UK group has always looked a weird mix of British wealth manager, U.S. asset manager and African financials arm. Old Mutual is now considering a breakup. The big question is whether South Africa’s troubles are reason to push ahead or wait.
Being a UK bank boss is now just scary enough 7 Mar 2016 Senior bankers now face censure for their own or subordinates’ misdeeds. Even where job titles don’t imply responsibility, regulators may be able to argue that institutional culture does. This fuzziness aside, the new regime should rein in brash boards, bosses and risk-takers.
Barclays shouldn’t double dip with Diamond 4 Mar 2016 The UK bank is selling its listed ownership of several lenders in Africa. Ex-Barclays boss Bob Diamond, who has operations there, would need $4 bln to buy a majority stake. That’s quite a tall order. And Barclays would face huge pressure not to give Diamond too good a deal.
LSE merger of equal-ness is a red herring 4 Mar 2016 Is it a merger? Are they really equals? It matters not. Deutsche Boerse’s approach for its UK rival could leave London Stock Exchange shareholders 16 pct better off. If a spoiler comes from U.S. peer ICE, value not format is what should guide LSE’s board and boss Xavier Rolet.
StanChart reinforces case for simpler pay 4 Mar 2016 The bank gave new boss Bill Winters 6 mln pounds to buy him out of hedge fund Renshaw Bay. Yet that’s hard to square with the now-known price at which the fund’s main business was later sold. Standard Chartered’s numbers may still add up, but investors can only guess.
France tries potent anti-Brexit ploy: threats 3 Mar 2016 Gallic warnings that migrants will be waved through to Britain if the country leaves the EU could be scare tactics. But Economy Minister Emmanuel Macron’s words may do more to sway UK voters who fear immigration than economic arguments about the benefits of staying in the club.
Russia gets even less enticing for foreign banks 3 Mar 2016 Goldman Sachs may not help underwrite a Russian state bond issue after Washington criticised U.S. involvement, reports say. Foreign investment banks that remain in Moscow need business. But the difficulty in negotiating the conflicts shows why some are quitting.
Schroders picks bad time for not-great governance 3 Mar 2016 Michael Dobson will stand down as chief executive of the UK asset manager and become non-executive chairman. That’s not good practice. Schroders has reasons for the move, but given the tough environment for fund managers, there are good grounds for fresh blood.
Sports Direct investors get what they deserve 3 Mar 2016 The sports retailer will be relegated from the FTSE 100 after a profit warning and a minimum-wage controversy hammered the shares. Founder Mike Ashley’s control gives investors almost no influence. But they have always known that risk – and until now, have done well despite it.
Germany’s Facebook cartel probe deserves a Like 2 Mar 2016 The social network doesn’t charge a price, yet still is not free: users pay with their personal data. But are they getting a fair deal or is Facebook abusing its market power? Either way, it’s good that a pioneering investigation by Germany’s competition watchdog is asking the question.
Who pays for London City Airport’s golden ticket? 2 Mar 2016 The financier’s hub of choice has been bought for 2 bln stg by a group including Ontario Teachers’ Pension Plan. The price, about 30 times 2015 EBITDA, implies the airport needs to double its passengers to make decent returns. Or it can hike prices – and annoy its own customers.
Deutsche Boerse’s LSE bid could slip up on ICE 1 Mar 2016 The U.S. exchange may crash a merger between Germany’s exchange and its UK peer. Cash and a higher premium would be enough to turn LSE investors’ heads. The German group can counter with big synergies or hike its own bid - but that might annoy customers and its own shareholders.
Glencore’s recovery scores three out of four 1 Mar 2016 The Swiss-based miner has cut costs, reduced debt and proven its trading business does well when commodity prices are low. To reach a net debt target of $15 bln, boss Ivan Glasenberg needs to offload mines and a stake in its agricultural business into a market awash with sellers.