Carrefour property deal not all it seems 31 Aug 2007 The French supermarket s plans to spin off a chunk of its real estate is a flashy way of doing very little at least in economic terms. By setting up a listed property company, Carrefour can mark its property to market. But such financial engineering can work both ways.
Ackman chose wise target in Target 21 Aug 2007 Poorly run companies make easy pickings for activists. But they can also leave funds terribly exposed to losses if their efforts flounder. Pershing Square's $2bn Target stake might seem odd given the retailer's strong results, which give Pershing downside protection.
Don’t count Wal-Mart out just yet 14 Aug 2007 WalMart shares tumbled 5% after the retail giant slashed its earnings forecasts on weakness in consumer spending. But there are some bright spots. WalMart won't turn the ship around overnight, but it has the makings of a contrarian bet.
Sainsbury’s board should focus on shareholder value 8 Aug 2007 By that measure, the Qatari fund s £12bn offer for the supermarket group looks attractive. But the board may think financing is an issue. It could argue that the UK regulator won t accept a highly leveraged Sainsbury s. It shouldn t rush to make that claim.
Mattel’s headaches may have just begun 2 Aug 2007 But while the immediate financial damage appears limited, the longerterm fallout could be no fun for the toymaker's shareholders. Discovery of lead paint on toys it manufactured in China prompted a massive recall of some popular Mattel products.
Starbucks needs bigger jolt than price hike 30 Jul 2007 The coffee chain is taking advantage of its premium brand to pass along higher prices to its customers. But while a price hike is a good strategic move, the company may need a much bigger jolt to perk up its sluggish stock price.
Sainsbury’s should bite the Qataris’ hands off 27 Jul 2007 Facing a £12bn bid from Delta Two, the UK retailer's board has two things to consider: is a bid is high enough? And is it deliverable? The offer ticks the first box. And while deliverability isn t quite so clear cut, it could be unwise to let this bid fizzle out. Facing a £12bn bid from Delta Two, the UK retailer's board has two things to consider: is it high enough? And is it deliverable?
Boots debt discount betrays banks’ bearish view 25 Jul 2007 KKR s banks are holding £5bn of senior debt they couldn t sell. But they are offering firesale prices to move £1.75bn of riskier loans. They seem unwilling to bet that the market will improve enough to sell that debt profitably. That s a truly bearish credit bellwether.
Sports Direct should be taken off the pitch 24 Jul 2007 A profit warning has left the UK retailer trading at less than half the price it floated at only five months ago. It has been a disgrace. Shareholders should be demanding that Mike Ashley, Sports Direct founder, buys back the 43% stake he sold at the company's flotation price.
Private equity could find Pret a Manger tasty 24 Jul 2007 The UK sandwich chain has prospered at home, but growth has slowed. McDonald s is a shareholder but has lost interest. So it needs new backers to tackle the US market. Growth might not be easy, but at least financiers should know what they are biting into.
Mike Ashley piles his plate ever higher 20 Jul 2007 Stakebuilding, activism, and now a reported bid for Foot Locker. The Sports Direct founder hasn't let up since floating his retail empire. But even the best managers can overdo it: look at Renault s Carlos Ghosn. And unlike Renault, Sports Direct s shares are firmly in reverse.
Qataris put the squeeze on Sainsbury 18 Jul 2007 Delta Two s £12bn bid for the UK retailer beats the last one from CVC. Think more money, fewer conditions, and better political connections. The Sainsbury family may have reservations. But the Qataris might get around them and other doubtful investors by offering equity.
Why blaming the weather is still for wimps 11 Jul 2007 Floods and storms are usually a cue for weatherrelated profit warnings to cross the wires. This year even UK retailer M&S has joined in. Some products suffer when skies are grey. But good retailers bounce back. For the rest, there s always the weather derivatives market.
Prada shouldn’t snub private equity 9 Jul 2007 Selling out to private backers rather than floating may give luxury companies more fuel for their aggressive global growth plans. But IPOs help founding families like the Bertellis keep control. That s also why investors do well to treat such floats with kid gloves.
KKR’s £9bn Boots financing will test Euro market 6 Jul 2007 The buyout group has picked a tricky time to finance Europe s largestever LBO, with deals on both sides of the Atlantic facing resistance. Add the fact the deal is highly leveraged and covenant loose and it is bound to be a tough sell. Other issuers will be watching nervously.
Private equity’s UK poster child comes unstuck 3 Jul 2007 Permira and Apax wanted £1.8bn for UK retailer New Look. But despite a rosy growth story, buyers balked at the price. The troubled auction process makes the company look like soiled goods, even if the owners will probably manage to wring more cash out of it.
US Foodservice bond snarl-up highlights LBO risks 27 Jun 2007 Buyout shops have exploited a glut of liquidity to achieve evertighter pricing and advantageous structures. But investors are now fighting back. If LBO shops stay greedy, more deals like US Foodservice will trip.
Pier 1’s recovery still a question mark 22 Jun 2007 The US retailer of funky home furnishings has seen its stock rocket ahead this year on hopes of a turnaround. Pier 1's new boss is making the right moves. But a slowing economy could derail the effort and its shares haven't priced in room for error.
Peltz pushes Kraft into the fast lane 22 Jun 2007 The food company s spinoff from Altria has stuck it with a new master in the form of activist investor Nelson Peltz. As at Heinz and Cadbury, he isn't proposing anything revolutionary. But Kraft has ample room to double up its $5bn buyback plan.
US antitrust chiefs target hippies – not fashionistas 21 Jun 2007 Nearly all mergers pass muster with regulators today. So arbs expect luxury eyewear group Luxottica s $2.1bn bid for Oakley to sail through. But why has the FTC opposed a smaller merger of two organic supermarkets? Perhaps the Bush administration prefers Ray Bans to tofu.