Year: 2009

TPG does a Debenhams down under

2 Nov 2009

The US buyout firm has quadrupled its money floating Australian department store chain Myer for A$2.4bn. But the shares fell 9% on their debut, albeit in a weak market. Investors will hope Myer isn t another letdown like Debenhams, the UK retailer TPG floated in 2006.

RBS loan-insurance gain mitigates Brussels pain

2 Nov 2009

The UK bank s larger degree of state support relative to rival Lloyds means the EC is giving it a much rougher ride. The threat of unanticipated disposals has knocked RBS shares. But improved terms for stateprovided loanloss insurance should limit shareholders' suffering.

Logic battles politics in Goldman-Fannie deal

2 Nov 2009

The profitable Wall Street firm might relieve the US government s zombie housing lender of tax credits it can t use. Both ought to profit from such a deal. The government s problem is that handing Goldman any benefit is politically fraught even if it helps taxpayers.

Tool industry engineers near-perfect deal

2 Nov 2009

Stanley Works is buying Black & Decker for $3.5bn in a deal that leaves almost nothing for investors in the two companies to fret over. If only dealmaking was always this simple.

Ford adds capital icing to earnings cake

2 Nov 2009

The Motown carmaker followed up its $1bn earnings surprise with a deft bit of balance sheet restructuring. Ford hopes to raise up to $3bn of new capital while also paying back almost as much debt. That should add confidence the firm is properly planning for longterm success.

Lloyds opens door to new era of bank capital

2 Nov 2009

The UK bank plans to swap hybrid bonds for a security convertible into equity when times get tough. Meanwhile, RBS has got rainyday capital from the state. Regulators will be happy that contingent capital is now a reality. Investors will be wary, but may have to join in.

SAB will struggle to make Femsa refreshing

2 Nov 2009

The South African brewer is the frontrunner to acquire Mexico s Femsa for some $7.5bn. It could easily finance the deal and Femsa would fit well with its emerging market portfolio. But getting the numbers to work for shareholders won t be easy.

Lehman bequeaths an artistic premium

2 Nov 2009

The investment bank s dodgy real estate portfolio precipitated its collapse a year ago. But Lehman s demise added value to a mostly unremarkable art collection. The pictures cruised past auction estimates. There s no accounting for taste or emotion in asset valuation.

CIT may find bankruptcy easier than rebirth

2 Nov 2009

The troubled US business lender fought hard, including bending over backwards to dissident Carl Icahn, to have its prepackaged filing accepted by creditors. But the harder task still remains: convincing the world it has a reason to exist beyond Chapter 11.

Vodafone’s India push gets more costly

2 Nov 2009

First Spain, then Turkey, now India. The subcontinent is the mobile group s latest problem area. Vodafone faces a price war, a $2bn tax claim, and the exercise of a $5bn put option by local partner Essar. The real cost of the 2007 deal taking Vodafone into India is now emerging.

Cautious currency thaw shows Iceland on right track

2 Nov 2009

The troubled country is slowly ending capital controls put in place to prop up the krona. Iceland now seems less like a stricken banana republic. With partnationalised banks, overgeared consumers and a vulnerable currency, it is closer to looking like the UK in miniature.

China’s wannabe Nasdaq works better on paper

30 Oct 2009

A new market for growth stocks should in theory promote innovation and help move China s capital from where it s hoarded to where it s needed. But in practice, Chinext has opened as a chaotic hive of overvaluation. It looks a step too far, too soon.

French government zigs and zags on EDF strategy

30 Oct 2009

Ten months after backing the French energy group s US strategy including a $4.5bn bid for Constellation nuclear assets the state is to support new CEO Henri Proglio s plans to exit America. France has been a terrible custodian. What better case for EDF s full privatisation?

London’s mid-market brokers face Darwinian fight

29 Oct 2009

The City s independent stockbrokers made it through the crisis pretty much intact. But that means there are still many mouths to feed. With smallcap listings thin on the ground, and trading in smaller companies in decline, the fight for survival may only just be starting.

Virgin Media turnaround could be short-lived

29 Oct 2009

Two years ago, the UK cable operator was a struggling takeover target. But a strong set of quarterly numbers reinforces its ongoing transformation. The risk for investors is that Virgin fails to act swiftly to protect the broadband network core to its claimed competitive edge.

China’s megabanks face tricky transition

29 Oct 2009

ICBC and Bank of China have made up for falling interest margins by lending 30% more this year than in the whole of 2008, boosting their Q3 earnings. But lending must slow, and the banks will need to chase fees to keep profits afloat. That may tempt them to take bigger risks.

Deutsche Bank struggles to make most of crisis

29 Oct 2009

The German giant s latest results don t reflect its supposed winner status. Deutsche may be capable of making diversifying acquisitions, but its investment bank isn t outpacing rivals. It also remains curiously stubborn on capital. Deutsche is paying the price with its valuation.

Rivals try gaining on Exxon’s prowess with costs

29 Oct 2009

The Texan major has long been the model for efficiency in the industry and still enjoys a sizeable lead. But Shell, BP and others are hoping to narrow the gap with more credible restructuring plans and stronger discipline on expenses. They have a way to go yet.

CIT should be put out of its misery

29 Oct 2009

Creditors have until midnight on Thursday to vote on the US smallbusiness lender's proposals for a debt restructuring or a prepackaged bankruptcy. But CIT has little value as an ongoing business. Creditors would probably do better if it just sells off or winds down its assets.

Happy days not quite here again yet

29 Oct 2009

US growth of 3.5% looks like a bounce into recovery. But with cash for clunkers and government spending driving the numbers, it might as well be called Government Domestic Product. This approach caused a nice, but temporary, bounce in 1933. History may repeat itself.

Greenhill pays small price for step forward

29 Oct 2009

The advisory shop is spinning off its buyout funds at a price equal to just 1% of assets. That s cheap. But it makes sense. The lumpy business made earnings difficult to predict. To rectify this, it would have needed to grow, which risked irking advisory clients.

Proglio’s plans for EDF shouldn’t include Veolia

28 Oct 2009

The incoming chairman and chief executive of EDF says he doesn't want to merge the French electricity group with Veolia, the environment services company he currently heads. But he still wants EDF to become Veolia's dominant shareholder. This is a bad idea.

Too big to fail label needs more transparency

28 Oct 2009

The US Treasury s draft financial services law provides for a new class of systemically important banks which the Fed regulates more tightly and supports financially. That list should be public, not undisclosed as proposed, and the toobigtofail playing field needs to be level.

Debt swap window may be closing

28 Oct 2009

That s especially true for opportunists like Hilton and TXU. When debt trades at a significant discount to par, borrowers can offer creditors a better than market price while still cutting their debt loads. But rebounding debt markets mean it is harder to make the numbers work.

New UKFI chief’s first task: RBS bonus policy

28 Oct 2009

UBS banker Robin Budenberg is to be investment manager for the UK's bank stakes. Top priority should be encouraging RBS to show leadership with a prudent bonus policy this year. That may make Budenberg look a political stooge. But he ll soon have the chance to prove otherwise.

Nomura vindicated on Lehman, but needs an encore

28 Oct 2009

The Japanese broker s earnings no longer hang on its homeland. Lehman is delivering, with fixedincome trading countering an otherwise weak investment bank. The crisis gave Nomura the chance to jump into another pond. But it must now compete with fish that have got stronger too.

Wasserstein bequeaths a solid House of Lazard

28 Oct 2009

The Wall Street firm s thirdquarter earnings show its three main businesses firing on all cylinders. That's a fitting sendoff for Lazard s late chief and a sound base for whoever takes over. But that doesn t mean his successor can sit back comfortably.

Asia growth reflects and exacerbates imbalances

28 Oct 2009

China and Korea are showing an incipient export recovery. The revival in trade may partly reflect excess global liquidity, and partly the immaturity of China s consumer economy. Whatever the causes, returning Asian trade surpluses should be a concern.

US stuck with cash-guzzling GMAC

28 Oct 2009

Private investors have shunned the former GM finance arm. Given GMAC s role propping up Detroit's car sales, the government will probably plug the gap currently some $5.6bn. It's part of the much bigger Motown rescue. But it's a reminder that bailouts are a slippery slope.

European financials catch up with reality

28 Oct 2009

Tumbling bank share prices following ING s EUencouraged breakup may seem overblown. The Dutch bancassurer wanted to split itself up anyway. But bailedout bank shares were frothy, while bank subordinated debt was trading at a discount to par. A correction was overdue.