Barclays’ investment bank is too good to lose 26 Nov 2012 Antony Jenkins is feeling the heat from investors. The Barclays CEO is under pressure to cast his investment bankers free and pursue the high street’s more staid returns. But with investment banking making up three-fifths of group revenue, Jenkins can’t afford to set it loose.
Company face-time ban adds to equities grief 23 Nov 2012 The UK regulator has decided that arranging access to company management doesn’t constitute equity research. That’s more than just semantics. It rightly removes a bad incentive for fund managers to shunt trades to certain brokers. Yet another headache for the equities business.
HP’s accounts bombshell: a guide for the perplexed 22 Nov 2012 The U.S. tech group says it was duped into overpaying for Autonomy. The $9 bln row centres on three allegations relating to how the UK group presented its sales. Unpick them, and HP has work to do to show Autonomy went beyond being aggressive in its accounting.
RBS’s Citizens unit all dressed up, nowhere to go 21 Nov 2012 The U.S. bank, with its $120 bln balance sheet, is a prize asset. That should mean a bidding war if UK taxpayer-owned RBS sells it. But the need to pay cash, keep their own investors happy and satisfy watchdogs may give buyers pause. Citizens could remain foreign for a while.
HP-Autonomy row suggests bankers did not compute 20 Nov 2012 There’s plenty of blame to go around in the explosive bust-up between the U.S. tech giant and the British data-sifter. But it raises tough questions for the M&A advisers who shepherded the $12 bln deal, chiefly Frank Quattrone’s Qatalyst, Barclays and Perella Weinberg.
UK tech suffers with fall of lonely star 20 Nov 2012 Autonomy and ARM Holdings were the only gigantic tech successes in a country anxious to develop Silicon Valley-style hubs. Now one of the two national champions has fallen badly. For today’s British start-ups, Autonomy’s problem may make fund-raising a bit trickier.
Soft power is priceless – and scarce 19 Nov 2012 When the term was coined in 1990, the U.S. way of life still had broad appeal. But America is now equally distrusted and emulated. No nation has filled the soft power gap. Japan and the UK are powerless despite a new study that says otherwise, and China offers only soft weakness.
Choose outside man for Bank of England governor 16 Nov 2012 Any private company which performed as badly as the UK central bank would be in for a major restructuring, starting with an untainted and imaginative leader. Insider Paul Tucker, the current favourite for the top job, does not fit the bill. John Vickers would be a better choice.
Counterpoint: Tucker best man for impossible job 16 Nov 2012 The new Bank of England chief will be expected to preserve growth, prevent bubbles and keep banks safe. Whoever is chosen will probably fall short. Deputy governor Paul Tucker has the best credentials. And despite being an insider, the contrast with Mervyn King will be large.
Reckitt enters vitamin wars with a Bang 16 Nov 2012 The consumer powerhouse behind Cillit Bang has gatecrashed Bayer’s bid for U.S. vitamin maker Schiff. At a 23.5 pct premium and 16.5 times EBITDA, the $1.4 bln counterbid is potent stuff. But trust Reckitt to extract big synergies, as it did in previous punchy deals.
BP’s Macondo deal comes with criminal hangover 15 Nov 2012 A sigh of relief is in order at the embattled UK oil major. It settled with Uncle Sam for $4.5 bln - less than feared. But it’s not over. BP’s admission of criminal guilt in the 2010 Gulf spill could be used in a high-stakes civil trial. No wonder investors aren’t cheering.
UK inflation is symptom of global QE-itis 14 Nov 2012 The Bank of England is feeling gloomy, and it should be. UK inflation remains too high while GDP growth is frustratingly low. The underlying problem is a global excess of newly printed money. QE may be hurting more than it helps.
Anglo needs a dealmaker CEO to unlock value 14 Nov 2012 It may be tempting to replace Cynthia Carroll with an operational obsessive who can deliver big projects. That’s one area where the outgoing boss struggled. But the miner really needs a visionary who can make tough calls, like demerging platinum and finding a buyer for the rest.
UK gas price probe another jolt to cosy markets 13 Nov 2012 Allegations that traders rigged UK wholesale gas prices, if true, would be another blow to the public’s faith in market indicators. Libor was bad enough. Anger at rising heating bills makes a gas scandal more politically explosive, even if the financial stakes look smaller.
Hugo Dixon: Brexit could come before Grexit 12 Nov 2012 The UK’s relationship with the European Union has the dynamics of a bad marriage. Divorce wouldn’t be good for Britain. But the pressure is building for a referendum on leaving the EU after the 2015 UK election. On current trends, the British people will vote to quit.
BBC shows how not to manage a crisis 12 Nov 2012 The broadcaster is reeling after its boss quit following two terrible journalistic errors. Slowness to get a grip on the situation may not be all his fault. It probably also reflects organisational and cultural flaws. The BBC mustn’t waste the crisis as a chance to make changes.
City cull adds to London house-price bubble risk 12 Nov 2012 Financial firms are forecast to return to 1993 levels of headcount, yet prime central London property keeps appreciating. Global safe-haven inflows may keep it that way. But falling rents are a warning that if the foreign money dries up, the market’s fundamentals aren’t strong.
Diageo pays heady price for Indian spirits 9 Nov 2012 The UK drinks group will get up to 53.4 pct of United Spirits for $2 bln. Despite a weakened seller, that’s 20 times historic EBITDA with few synergies. But the long-term logic adds up if it helps CEO Paul Walsh position Diageo as the leader in giving emerging markets a buzz.
Barclays’ CoCo bond needs generous pricing 8 Nov 2012 The UK bank is issuing a new type of “contingent capital” - a bond that inflicts total wipe-out when capital ratios come under severe but not disastrous pressure. The security is effectively subordinate to equity. Doubtless it has its place. But the mooted 7 pct yield seems too low.
Pearson should "show, not tell" with Penguin books 5 Nov 2012 Merging Penguin with Random House may well beat selling the publisher for cash to Rupert Murdoch. Still, parent Pearson wants investors to take this largely on trust. It’s not a huge transaction - but if the venture struggles later, Pearson’s fuzzy assurances will be worthless.