United Kingdom

Aviva provokes subtly different shareholder spring

30 Apr 2012

The UK insurer is the latest company to review executive pay in response to investor pressure. Shareholders may have been emboldened by a rising tide of pay revolts elsewhere. But discontent at Aviva seems as much about long-term underperformance as short-term pay excess.

Four Seasons finally gets debts under control

30 Apr 2012

Guy Hands is buying the UK care-homes operator for an enterprise value of 825 million pounds. Private equity’s role in the sector is controversial. But this restructuring-cum-takeover should return Four Seasons to a semblance of financial health.

Shareholder rage at bank pay reaches tipping point

27 Apr 2012

A third of shareholders failed to back remuneration reports at both Credit Suisse and Barclays - after a similar protest at Citi. It may finally shame banks into dividing the spoils more equally with investors. But governments and customers will also want their pound of flesh.

Murdochs escape grilling with only mild burns

26 Apr 2012

The media moguls are deeply mired and new evidence could yet bite. But the cross-examination by a UK inquiry could have been more damaging for the Murdochs and their company, News Corp. The governance failings don’t look much worse and UK politicians are now sharing the ignominy.

AstraZeneca now needs a cultural revolution

26 Apr 2012

The old CEO is gone and a new chairman will come faster than planned. The board has moved decisively to address shareholder concerns about strategy and performance. But the pharma group’s difficulties are ingrained in its psyche. The company needs more than new leaders.

Deutsche and Barclays’ fortunes could yet converge

26 Apr 2012

The UK lender’s investment bank outpaced its German rival in the first quarter. But Deutsche Bank is in deleveraging mode, while Barclays’ risk-weighted assets actually rose. Capital challenges and mutual vulnerability to a misfiring euro zone could yet spoil 2012 for both banks.

Rupert Murdoch telegraphs shareholder indifference

25 Apr 2012

The News Corp chief spoke with care when grilled by a UK media inquiry on the interplay between his political contacts and commercial interests. Sadly, he was at ease in brushing aside shareholder demands that he sell his newspapers, and voicing regret about taking Sky public.

No need for UK panic as Europe brings recession

25 Apr 2012

The latest report shows British GDP has fallen for the second quarter in a row. With Europe in recession and Britain in austerity, such weakness is no surprise. But the government and the central bank should still worry more about inflation than economic decline.

RBS scrapes barrel with reverse stock split

25 Apr 2012

The UK bank’s planned cut in its share count may help it look more like a normal bank. But unlike a similar ploy by Citi last year, punitive EU state aid penalties mean RBS can’t restore dividends as well. As such, the move underlines that managers have few other levers to pull.

Murdochs’ UK political friendships backfire on all

24 Apr 2012

A public probe is exposing unhealthy contact between the British government and News Corp. That creates new uncertainty over the media group’s part ownership of pay-TV firm BSkyB. And the impression that ministers were compromised has the makings of a full-blown political crisis.

Spotify’s $4 billion pitch sounds high

24 Apr 2012

The music-streaming firm is seeking new backers at a hefty $3.5 to $4 bln valuation. Spotify boasts a neat idea, rapid growth and Facebook’s friendship. But big licensing fees, which rise in tandem with users, mean it lacks the economics of the best dot-com hits.

C&WW right to recommend Vodafone offer

23 Apr 2012

The UK telco is justified in recommending a 1 bln pound bid from Vodafone, even if top shareholder Orbis is unimpressed. The only rival bidder quit, and the premium is 92 pct. But Vodafone’s coyness on the synergies naturally fuels the suspicion it could afford to pay more.

Ackman gets closer to permanent capital grail

19 Apr 2012

The activist hedgie’s planned $4 bln London-listed vehicle would dwarf other public funds, which often trade at a big discount to net asset value. The scale plus fee sweeteners may give Ackman an edge. And his focus on easily priced bets could shrink the NAV problem.

Bob Diamond is next victim of "shareholder spring"

19 Apr 2012

Barclays is attempting to placate angry shareholders by linking half its CEO’s 2011 bonus to a return on equity target. The concession may help the bank avoid a Citigroup-style revolt. But it begs the question why Diamond’s entire payout isn’t subject to the same condition.

Glaxo’s Human Genome bid smacks of opportunism

19 Apr 2012

The British drugmaker is already a partner of Human Genome Sciences and is thus the obvious acquirer. But the U.S. biotech is wise to rebuff a $2.6 bln offer. GSK can take big cost savings, and the bid looks cheap even given scaled-back expectations for the duo’s key product.

UK gas bounty will be tricky to exploit

19 Apr 2012

Geologists think the UK may hold 1,000 trillion cubic feet of shale gas - good for decades of self-sufficiency. But high extraction costs mean much of it may stay buried unless prices move sharply higher. That makes UK shale more of an insurance policy than a game-changer.

BoE drops QE as inflation looks more threatening

18 Apr 2012

The latest minutes show the Bank of England backing away from quantitative easing. The change of stance is less due to pleasingly fast growth than to worryingly high inflation. Oil is the chief culprit. Central banks should recognise the global impact of easy monetary policy.

The Bank of England needs a home-grown governor

18 Apr 2012

Foreigners have run Britain’s largest companies and the national football team. But internationalisation has its limits. The central bank’s governor is the UK’s most important unelected official. Given the need for transparency and accountability, a British passport is a must.

Tesco plan deserves every little bit of support

18 Apr 2012

Shares in the food retailer are the FTSE 100’s worst performers this year. After a nasty warning in January, Tesco’s new-broom management team has outlined a plan for stabilisation. Lower UK margins are the necessary cost of faster growth. Investors should back the strategy.

Total, Shell show need for re-think on oil risks

17 Apr 2012

Recent incidents at sea have sent the oil majors’ shares tumbling at the first whiff of trouble. In both cases, billions of dollars of lost market cap looks like an overreaction. Drilling in hard-to-reach places will always be risky. Investors need a new way of thinking about it.