Wynn shareholders should cash in some chips 7 Aug 2007 Las Vegas high rollers are on a hot streak. Casino like Wynn Resorts have delivered spectacular earnings, and shares have risen accordingly. Wynn s business looks good but its valuation is nearly as opulent as its resorts. Investors might consider taking a few chips off the table.
Debt tremors hit property deals’ weak foundations 3 Aug 2007 Consider Mitchells & Butlers shelved joint venture. What s surprising isn t that it was pulled, but how finely balanced it was. In such highly geared deals, a nudge upwards in the cost of debt or downwards in the performance of the business can decimate returns.
Expedia flies backwards with buyback 23 Jul 2007 In an embarrassing volteface, Barry Diller cancelled last month s plans to buy back up to $3.5bn of the travel website s stock. This isn t all that surprising. The deal wasn t much more than an overpriced, partial LBO disguised as a shareholderfriendly buyback.
Accor could be good private equity bet 6 Jul 2007 Blackstone paid top whack for Hilton. But Accor, the hotel group s French rival, owns more of its property and has more room for renovation. A buyer would have big shareholders to win over. But a 40% premium, or E21bn, might do it and still leave scope for a 30% return.
Blackstone digs deep in $26bn Hilton deal 4 Jul 2007 The buyout group is paying a 40% premium for the hotel group, which it will split between its real estate and private equity funds. Hilton s property backing gives Blackstone plenty of options. But even so, it may need to write a hefty equity cheque.
AA-Saga merger shows need for interest tax rethink 3 Jul 2007 Operating profits have been strong at both UK companies. But they have been kept geared up enough to avoid paying any profit tax. The merged entity is likely to be equally debtheavy and taxlite. It s a sensible corporate strategy in response to bad public policy.
AA and Saga agree to £6.15bn merger 25 Jun 2007 But the real juice in the deal seems to be the refinancing, which means private equity will get to take even more money out. There may be some logic behind merging the UK motoring services and insurance business with the travel and financial services firm.
Expedia opts for pricey $3.4bn leveraged recap 19 Jun 2007 The travel website is buying back 42% of its shares in a Dutch tender. Though large, its balance sheet can accommodate the gearing. The bigger question is whether it s getting good value for its money. At the midpoint of its offer, it would be paying 22 times EPS.
Sotheby’s shares are art world’s canary 11 Jun 2007 The famed auction house has seen its stock jump as cashstuffed buyers snap up masterpieces at record prices. But in the past, Sotheby s stock has foreshadowed the exit of these frenzied aficionados. Investors should keep a close eye on it now.
Online gaming still looks like a loser in US 6 Jun 2007 US lawmakers may be reconsidering last year s net gambling ban. But Partygaming and its peers would gain little from a regulated market. They d be up against US gambling titans like MGM, and probably have to pay tax. That makes it unlikely they ll see their IPO prices again.
How to hedge your bets with art 24 May 2007 Conspicuous consumption has made modern art a hot property. Last week a Rothko changed hands for a record $73m. Investors have lost a packet on fine art before. But maybe there are some ways the new wave of art buyers can improve their odds.
Blackstone steps to safety with Orbitz IPO 11 May 2007 The private equity group s purchase of $4.3bn worth of travel businesses from Cendant last year had all the elements of a high wire act. Loose credit markets have allowed it to extract its initial investment. Floating its internet subsidiary will reduce its heavy debt burden.
Whitbread not cut out for LBO treatment 21 Mar 2007 A buyout firm might covet the UK leisure group s £4bn property stash. But there s not much they could do that the company itself couldn t. Investors may have the spectre of private equity to thank for highlighting the value gap. But thanks is probably all they should give away.
Tui and First Choice £3bn merger makes sense 19 Mar 2007 The new group will become Europe s biggest travel firm. The synergies look juicy, and the UK s First Choice gets much better distribution. Merging with the Germans may not have been the UK firm s first choice. But as far as plan B s go, it s still pretty good.
Hedge funds launch Grand Theft company coup 7 Mar 2007 Steve Cohen and Paul Tudor Jones may seize control of TakeTwo, the videogame producer, without buying out minority shareholders. Given TakeTwo's problems, investors may welcome this. But it highlights a weakness in US shareholder protections that could be exploited.
Four Seasons’ board approves take-under 12 Feb 2007 The luxury hotelier s directors blessed a $3.8bn offer from its founder, Bill Gates and Prince Alwaleed. They will pay $82 per share. The offer initially looked fair. But the sector has traded up and Four Seasons hit $84 on Friday. The board should have held out for more.
Thomas Cook puts MyTravel out of its misery 12 Feb 2007 Putting together the underperforming UK holiday company with its more efficient German rival makes sense, given the scale of the synergies. The new debtfree company should be able to compete more vigorously.
Jobs altruistic manifesto hides self-interest 7 Feb 2007 Steve Jobs call for the record industry to eliminate digital rights protection would benefit Apple, not the music industry. With Apple facing legal challenges in Europe, his shrewd aboutface casts the firm in a favourable, populist light.
Apple and the Beatles make love 5 Feb 2007 The iPodmaker has put an end to a painful trademark dispute with the Beatles whose music Steve Jobs professes to love. The immaterial pact is good for both parties. But resolving the iPhone dispute with Cisco may take more than amour.
Netflix still has the edge over Blockbuster 31 Jan 2007 The US video rental chain has muscled into the online DVD firm's space and looks to be turning around at last. But the twist does not seem to have damaged the steady, profitable growth of Netflix, whose shares are also more reasonable.