Construction

Eiffage needs more than defensive strategy

23 Mar 2007

The French construction group has done the right thing for shareholders by fending off the advances of Spain's Sacyr. Now it needs more. Rival Vinci also has an unsolicited shareholder to deal with. A merger of the two could make sense if it s not purely defensive.

Saint Gobain restructuring has further to go

26 Feb 2007

The French building materials giant has launched the E4bn sale of its noncore packaging unit, part of a move to focus on shareholder value. The shares are up 17% this year and the company has accelerated its restructuring. But it shouldn t stop there.

Pinault makes E1bn Plan B move on Vinci

19 Jan 2007

The French mogul hasn't been able to assemble a team to go for Suez, but this hasn't dimmed his interest in infrastructure conglomerates. Vinci has a bundle of attractive assets, and was the subject of bid interest last year. A breakup of the E24bn group is not inconceivable.

Eads needs to rethink structure

21 Jun 2006

The aerospace giant s intensely political codecision making process didn t necessarily cause the problems with the A380. But the crisis has exposed its shortcomings. Talk of changing the shareholder and management structure is right on the money.

KKR forced to cut German crane IPO price

20 Jun 2006

The private equity group has slashed the offer price of Demag Cranes by about 30% to E22 per share and cut the size of the deal. The flotation is the latest victim of the recent market volatility. But at this price, KKR should have little trouble getting it away.

Veolia’s Vinci approach misconceived from start to finish

19 Jun 2006

An "acquisition risk" discount may now be baked into the price. As for Vinci, the construction and tollroad operator looks more vulnerable. Investors are left wondering whether the French water utility needs to do a deal and if the next one will be as unappealing as the last.

Vinci should be wary of Veolia bear hug

16 Jun 2006

The French water company has come out with a headline synergy number that suggests a deal might create some value. But there's no details about where these benefits would come from. Veolia needs to spell them out if it wants to be taken seriously.

Vinci right to reject Veolia approach

15 Jun 2006

The deal to merge the French water utility with the construction company lacks industrial logic. But it may make some political sense. What s in it for Vinci? There is nothing Veolia could do that it couldn't copy itself.

Has Eads bitten off more than it can chew?

14 Jun 2006

Delays in the jumbo jet won t just hit the European aerospace giant s earnings. Its credibility has taken a hit too. But this might help Eads get a knockdown price on BAE's 20% stake in Airbus.

Veolia’s mooted bid for Vinci lacks logic

13 Jun 2006

Both the French water and construction firms used to be a part of Generale des Eaux, now Vivendi. It s hard to see why, or how, Veolia would want to resurrect the old order. There is precious little overlap, and financing might be tricky.

KKR shouldn’t get greedy with German crane IPO

12 Jun 2006

It has knocked the group into shape and demand for Demag Cranes' whizzo port technology is strong. It's offering shares in Demag Cranes at E26E31 each. That isn t a steal, but KKR should be able to hoist it at the low end of the range.

Vinci management clean-up isn’t over yet

2 Jun 2006

The chairman has resigned, ending an unseemly squabble with the CEO and boosting the French construction firm s quoted value by E1bn. That s a good day s work. But Vinci needs to go further still. It s cronypacked board is also begging for change.

Bouygues’ E2bn Alstom purchase looks smart

27 Apr 2006

One might ask why a 21% stake in the engineering firm is needed in order to build global power plants. But there's a bigger potential prize. By helping the French state sell out of Alstom to satisfy EU rules Bouygues' reward could be Framatome, the stateowned nuclear supplier.

US homebuilders offer value trap

27 Mar 2006

Some investors suggest that US house builders like KB Home and MDC could soar if the American market enjoys a Britishstyle soft landing. But this argument ignores a massive supply glut in the overbuilt US housing market. Homebuilder buyers beware.

Sacyr tries romance to smooth cross-border M&A

2 Mar 2006

The Spanish construction firm has France s Eiffage in its sights. It could go hostile but wisely is using sweet talk instead. That is partly a sign of protectionist times. But it s also pragmatic: most of Eiffage s business is with the French state.

Shareholders hold Lafarge to ransom

10 Feb 2006

The French building products group remains deadlocked with investors in its $3bn purchase of the rest of its US business. Judging by the past, Lafarge will raise its bid. Like others buying back minorities, it seems designed to draw out the hot money.

BPB should talk if Saint Gobain raises

14 Nov 2005

The UK plasterboard group may think it is worth over 800p a share. But it should negotiate if the French group sweetens its offer to 760p. Talks might allow BPB to squeeze an even higher offer. The alternative for shareholders is a choice between a disappointing bid, and no bid.

Cracks appear in America’s McMansion market

8 Nov 2005

The country s biggest maker of luxury homes, Toll Brothers, warned that home sales in 2006 will be lower than expected. This bodes ill for the housing market's health, as Toll s affluent customers were supposed to be less sensitive to rising mortgage rates.

Pilkington right to reject NSG offer

3 Nov 2005

The £2bn price tag for the UK glassmaker is a reasonable first offer. But Pilkington can make a good case for more. The smaller Japanese competitor is unlikely to win without a management endorsement. It should pay up, if it can.

BPB’s proposed capital return is a distraction

5 Oct 2005

The UK plasterboardmaker s extra £250m payout distracts from the debate about value, where it was making headway. The promise of higher dividends should buoy estimates of BPB s fair value. But BPB must prove it deserves a decent premium on top of that.