Pendragon shows one can be too clever in M&A 6 Feb 2006 The UK car dealer thought it had a devious wheeze to buy rival Vardy on the cheap, offering less than a second bidder. But there was a flaw in the scheme. As a result, Pendragon lost its nerve and raised its bid a much more straightforward way of behaving.
Citigroup plays it safe with GMAC bid 2 Feb 2006 By bidding through its private equity arm Citi may hope to avoid the reputational risks that are making others baulk at GM s finance unit. But Citi s bid for GMAC might not be all it s cracked up to be if it doesn t answer GM s need for a higher GMAC credit rating.
GMAC sale gets rocky as deadline looms 26 Jan 2006 Buyers don t seem to be lining up to buy GM's $25bn financial services unit. One of the major hurdles seems to be reputational risk. The likes of GE, JP Morgan and others don t want to be stuck holding half of GMAC if GM goes under water. What are GM s options?
Ford distances itself from GM in Q4 23 Jan 2006 The US carmaker is often mentioned in the same breath as General Motors. But Ford's troubles are not as severe as its rival's. Ford s cash pile is larger and its cash burn lower. But its future is also precarious, particularly if GM were to file for bankruptcy.
Fiat stake sales could be first of many 23 Jan 2006 Two banks have sold 6.3% of Fiat acquired in September s E3bn debtforequity swap. Other banks with equity are likely to follow. After all, they did not gain control of Fiat. And the stock has rallied since the autumn.
Renault must close investment-trust discount 19 Jan 2006 The French carmaker trades 25% below the sum of its parts. Twothirds of its enterprise value comes from stakes in Nissan and Volvo. These holdings aren't just an inefficient use of capital; they entrench management. Renault's dynamic boss, Carlos Ghosn, should cut them.
Daimler insider probe may raise questions for Kopper and Deutsche 19 Jan 2006 If correct, did this influence Deutsche s decision to sell a E1.4bn block of Daimler shares? The German press says Daimler's chairman is suspected of having passed information about CEO Schrempp s impending resignation to Deutsche.
It’s time for a bondholder value revolution 13 Jan 2006 Leveraged buyouts and other actions friendly to shareholders continue to threaten already meagre returns on corporate bonds. Investmentgrade bond investors need stronger covenants as defence against the depredations of shareholders. Now is the time to demand them.
GM investors have their heads in the sand 13 Jan 2006 There is probably a $47bn hole in the automaker s balance sheet enough to wipe out shareholders and savage bondholders. If workers aren t to suffer too much from diminished pensions and health care, there will also have to be a state bailout.
VW restructuring plan lacks credibility 13 Jan 2006 The German carmaker has come out with an extremely ambitious profit target. But it hasn t said how it will achieve it. Meanwhile the Porsche situation has added further uncertainty. In the absence of greater clarity on the plan, the shares look overvalued.
GM dividend cut a no-brainer 10 Jan 2006 Kirk Kerkorian's top aide shouldn t need to tell the ailing car company to cut its dividend. The board should have moved years ago. The delay suggests the board has not fully grasped the gravity of GM s longterm challenges. But the unions have also been asleep.
Sixt’s Europcar bid may be hard to pull off 6 Jan 2006 The German car rental firm has joined buyout house Apax in an audacious bid for its larger rival. That may help it pay the highest price. But the pair will also have to agree on a workable strategy, including getting around the antitrust authorities. That could prove tough.
GM tries to bring Kerkorian on board 8 Dec 2005 The presence of Kirk Kerkorian s representative on GM s board could add a much needed jolt to the car company as it addresses its problems. But with his GM stake about $450m under water, Kerkorian is unlikely to be an advocate for bankruptcy. That suits GM boss Rick Wagoner.
Selling GMAC is the priority for GM’s new CFO 7 Dec 2005 GM s new finance chief needs to do more than sell GMAC car loans. He needs to sell a majority stake in the finance unit. That sale looks no closer to happening. Almost two months after GMAC was put on the block, potential bidders seem wary.
GMAC auction has Wall Street worried 23 Nov 2005 No, not because it's anxious about systemic risk for the financial system. The banks' real worry is what happens to GMAC s fees. Whoever gains control of GMAC nabs one of the world's biggest issuers of debt and $200mplus in fees and top leaguetable credits.
General Motors doesn’t cut deep enough 21 Nov 2005 Rick Wagoner s plan to close plants, cut an extra 5,000 jobs and find another $1bn in costs won t turn around the ailing car maker. These don't solve GM's larger issues of pension and healthcare burdens. A bankruptcy filing has not become less likely with these moves.
Cromme shouldn’t quit VW board 17 Nov 2005 One can understand why the architect of German corporate governance wants to bail out. VW's governance practices are extremely poor. But it would be better for shareholders if Cromme stayed on to fight a guerilla action against Piech, VW's chairman, from inside.
Piech pays back his union pals 15 Nov 2005 They saved the Volkswagen chairman s bacon when a key shareholder tried to oust him last month. Now Piech has let them choose the carmaker s new personnel director. No wonder some investors scent a strange smell in the air.
DaimlerChrysler exits Mitsubishi at E1bn loss 11 Nov 2005 The German carmaker is right to get rid of the minority investment even though it is painful. Hopefully it will take the same ruthless approach to other nonperformers, such as Smart.
VW ‘s Q3 results disappoint 3 Nov 2005 Fierce competition and rising raw material prices led to a collapse in margins and operating profits from the second quarter. The carmaker's restructuring effort is losing steam. The stock's premium to its peers isn't justified.