Rare Gulf cash call built on shaky foundations 30 May 2013 UAE contractor Arabtec is seeking $1.3 bln through share issues to fund expansion. The strategy makes sense, but it lacks detail and the newness of the management is a risk. And it’s unclear if the agenda of its big Abu Dhabi backer, Aabar, is aligned with ordinary investors.
U.S. housing is both cheap and out of reach 13 May 2013 It’s one of the few assets that look undervalued as stock and bond prices go through the roof. That’s ironic, considering the Fed’s bond-buying policy was designed in part to prop up housing. But tight lending standards make it hard to take advantage of the opportunity.
Brotherhood faceoff with Sawiris is bad for Egypt 11 Mar 2013 The country’s Islamist rulers have escalated a tax probe on billionaire Nassef Sawiris as he seeks to shift his construction group’s primary listing to Amsterdam. A fight between Egypt and its top entrepreneurial family is the last thing the country needs now.
Homebuilder IPO may add to recovery exuberance 29 Jan 2013 The monthly leap in U.S. home prices and a big quarter from builder D.R. Horton underscore buoyant attitudes about the housing market. Developer Tri Pointe could be capitalizing with a richly valued share sale. Investors should beware getting swept up in premature euphoria.
ACS shows who’s the boss at Hochtief 19 Nov 2012 The Spanish group is purging the top management of Hochtief 18 months after gaining control of the German builder. What makes sense for struggling ACS could endanger its subsidiary’s future. Investors should learn to mistrust promises made in the heat of takeover battles.
Sherwin-Williams deal colors Latam green 12 Nov 2012 The U.S. paint maker is splashing out $2.3 bln for Mexican rival Comex. Expected cost savings are worth about $500 million, and yet the market added almost twice as much to Sherwin-Williams’ value. It’s a testament to optimism about the region despite some signs of sluggishness.
Mexico’s $10 bln cement giant lightens its load 8 Oct 2012 Though expansion weighed Cemex down with debt and losses, the U.S. housing recovery, eager bond buyers and a planned Colombia IPO are now paving the road to recovery. The investment thesis, however, is less than concrete. Cemex is richly valued and dividends still look distant.
Italians railroad China’s PLA on soccer pitch 2 Aug 2012 How else to explain an investment in Inter Milan by China Railway Construction, a state group with origins in the People’s Liberation Army? Bragging rights are limited and industrial rationale non-existent. At best it’s a quid pro quo for the contract to build Inter’s new stadium.
Sacyr faces steep cost of botched diversification 14 Dec 2011 The Spanish construction group must repay by next week the 4.9 billion euro margin loan it took out to finance a 20 percent stake in Repsol. With the investment underwater, there is no easy way to do it. The banks hold the whip, but they will probably have to share some pain.
Rumble in rock garden presages more hostile M&A 12 Dec 2011 That’s one way to read the unsolicited $4.6 bln offer that Martin Marietta Materials made for larger rival Vulcan. The deal won’t succeed without a sweetener. But the lesson is clear: if profits can’t be mined from the ground, they can still be found by cutting costs.
China’s pursuit of stability risks greater stress 20 Sep 2011 Some claim China’s economy is a bubble set to burst while others think slowing growth and inflation warrant looser policy. Ethan Devine of Indus Capital argues that in fact China’s economy is both too hot and too cold, with structural reforms needed to bring it back into balance.
Rising costs may add M&A splash to paint business 11 May 2011 Prices for raw materials like titanium dioxide are surging while pricing power remains weak amid the U.S. housing slump. Rather than watching profits dry, don't be surprised if the likes of SherwinWilliams, PPG and Buffett's Benjamin Moore make deals to crunch out costs.
ACS’s new Hochtief bid is cleverer than it looks 15 Dec 2010 The Spanish construction group has upped its allshare offer for German peer Hochtief by 12.5 pct. It looks pointless. There are no rival bids, and the offer's still below Hochtief's share price. But the move may give underfire Hochtief managers a facesaving way to enter talks.
Rebel Hochtief investor has a strong case 9 Dec 2010 The German construction group's number two shareholder is demanding a boardroom clear out after it sold a 9 pct stake to Qatar. That is extreme. But Hochtief does need to give a convincing explanation for inflicting dilution on investors when it has no obvious need for capital.
Hochtief scores own goal with Qatar white knight 6 Dec 2010 The German construction group is selling a 9 pct stake to Qatar Holding, making it harder for Spanish predator ACS to gain control. By inflicting dilution, Hochtief may only alienate existing shareholders whose support it needs to remain independent.
Caterpillar mines synergy gold in Bucyrus deal 15 Nov 2010 The earthmoving giant agreed to buy the mining equipment manufacturer for $7.6 bln or five times its 2004 IPO price. While hefty, the cost savings that Caterpillar is promising to harvest are worth at least 25 percent more than the $1.8 billion premium it s paying.
Germany’s meddling in Hochtief war would backfire 3 Nov 2010 Berlin says it does not want to interfere in ACS's hostile bid for Hochtief. But even offering discreet support for a white knight, including Qatar, would be a slippery slope. Furthermore, a reckless defence could backfire on the German construction group.
New Jersey becomes unlikely blueprint to governors 28 Oct 2010 Against many odds and strong opposition Chris Christie balanced this year s budget. He even killed an overpriced, if worthy, tunnel project. But pension cuts and budget obstacles still loom. His budgetary governance model shows promise, but needs further testing.
ACS bid unlikely to fall flat down under 27 Oct 2010 Aussie builder Leighton is lobbying a local regulator to preserve its independence in the event the Spanish construction group succeeds in its bid to acquire its German parent, Hochtief. Even if Leighton gets it way, it wouldn't be much of a poison pill.
Another red flag raised over UK corporation tax 27 Sep 2010 Wolseley is redomiciling to Zurich for tax reasons. The bluechip UK building supplies group will escape harsh taxes on income from its sprawling global empire. Capitalised, the savings could be worth 400 mln stg. This may add oomph to the coalition's review of the status quo.