Consumer Products and Services

Icahn’s $10.2 bln bid puts Clorox on the shelf

15 Jul 2011

The activist's pitch is, roughly, that someone else should pay more than he is offering. But the household goods group isn't obviously underpriced, and there's no clear natural purchaser. Add Icahn's history of Potemkin bids, and Clorox may not shine brightly any time soon.

Samsonite makes HK listings look less luxurious

16 Jun 2011

The suitcase maker's shares slumped 11 percent on debut. So much for the idea that big consumer brands get assured premiums by floating on Asia's frothy markets. The implications for Prada aren't great. The financial logic behind these listings, always thin, now looks threadbare.

Bubbles abound in Bubble Wrap maker’s public LBO

1 Jun 2011

To clinch its $4.3 bln takeover of Diversey, publiclytraded Sealed Air is adopting a private equitylike financial structure. With debt equal to 4.4 times EBITDA and few synergies to speak of, the deal looks as vulnerable to a pop as the wrapping material it's known for.

Tesco’s new era starts with right focus: returns

19 Apr 2011

The UK retailer's new CEO has fleshed out how and when he will hit a punchy returnoncapital target. Getting there will mean revving up poorperforming international stores. After breakneck expansion and missteps in America, a more disciplined approach to growth is needed.

J&J earnings show Synthes just a nice distraction

19 Apr 2011

A series of recalls has buffeted the U.S. health conglomerate, as firstquarter results show. Buying medical device firm Synthes for around $20 bln would secure a rarelyavailable gem and handily consume cash trapped overseas. But it wouldn't fix J&J's quality issues.

Market right to see Reckitt CEO exit as sell sign

14 Apr 2011

Shares in the UK consumer goods group dived 7 pct on the shock news that feted boss Bart Becht is to step down. That's not overkill. Reckitt stock was already pricey and recent acquisitions have yet to deliver. Becht's impressive record is a tough act to follow.

China’s price controls are unwelcome throwback

4 Apr 2011

Telling Unilever to freeze prices is muddleheaded. Oldstyle restrictions on the price of goods don't kill inflation, they just stop it showing. If China won't let market forces prevail, a better policy might be to ease consumer goods firms' cost pressures by cutting sales tax.

Clorox may not yield much in Icahn scrubdown

14 Feb 2011

The activist took a 9 pct stake, initially sending the company's shares to a record high. Clorox might try tearing apart its collection of brands, which runs from household cleaners to salad dressings. But a valuation suggests that the whole is already worth as much as the parts.

Fortune Brands split is poison pill antidote

8 Dec 2010

The combination of liquor, golf clubs and faucets never made sense but it took an activist investor to catalyze a corporate carveup. Each piece will be more attractive on its own or to suitors. The spirits business, in particular, should now lure in a Diageo bid.

LVMH won’t be easily shaken from Hermès’ register

4 Nov 2010

Hermès wants Bernard Arnault, owner of luxury goods rival LVMH, out of its capital. But Arnault is unlikely to bow out gracefully after secretly building a 17 percent stake in the group. Hermès' only ally is the French regulator. That's no grounds for optimism.

Arnault’s derivative loophole must be closed

28 Oct 2010

LVMH's boss used cashsettled equity swaps in its swoop on Hermès. This crafty technique circumvented French disclosure rules designed to prevent creeping control of public companies. Given similar recent German and Swiss examples, it's odd France's watchdog didn't act sooner.

Arnault’s Hermès deal needs tough scrutiny

27 Oct 2010

Luxury group LVMH s announcement that it acquired a 17.1 percent in silkandleather goods maker Hermès looks at odds with French disclosure rules. LVMH says it fully complied with the regulation. If it s the case, the rules should change.

Arnault plants flags on Hermès bags

25 Oct 2010

LVMH, the French maker of Vuitton bags and other luxury goods and drinks, has acquired a 14 percent stake in Hermès International, the exclusive familycontrolled group. LVMH owner Bernard Arnault says he doesn t want control. But he mostly doesn t want rivals to get near Hermès.

Pandora shows PE-backed IPOs needn’t be charmless

5 Oct 2010

Shares in the Danish jewellery maker were priced at the top end of the range and rose 15 pct on their debut, despite its private equity owner making a partial exit. Pandora is unleveraged and demand for its distinctive bracelets is brisk. Others can learn from its success.

Beauty doesn’t come cheap in Unilever’s Culver buy

27 Sep 2010

The AngloDutch consumer goods group is paying more than 14 times EBITDA for its $3.7 bln purchase of U.S. hair and skin care products company Alberto Culver. But behind the headline cost, Unilever should have plenty of savings to squeeze out of the tube.

China may find United Biscuits hard to digest

27 Sep 2010

A Shanghai conglomerate may pay 2.5 billion pounds for the privateequity owned maker of nobbly treats such as Twiglets and Hobnobs. The price looks indulgent. But Bright Food probably cares more that the UK snackmaker will enhance its revenues, and comes without political fuss.

Ocado stock still too expensive

7 Sep 2010

The UK online grocer hopes to shed its lossmaking label next year. Sales are still growing rapidly, nothing is going wrong with its business model but, aside from its band of believers, investors are unconvinced. That's not surprising: this remains a highrisk venture.

When should investors sell their Apple stock?

6 Sep 2010

Not yet. The group's push overseas and into the business market not to mention new gadgets means growth should continue for some time. At some point, though, it will inevitably slow. Here are a few possible warnings signs for when that day may arrive.

Reckitt spices up product range with SSL bid

21 Jul 2010

The consumer goods group is paying 2.5 bln pounds to add Durex condoms and Scholl sandals to its power brands. Cost savings will double SSL's earnings, and Reckitt is wellplaced to squeeze out more growth. Big pharma could crash the party, but the price is already pretty full.

GE shrinking into better shape

16 Jul 2010

The downsizing of the conglomerate's finance arm is making the firm healthier, as secondquarter figures illustrate. GE will eventually need revenue growth at its industrial arms. But for now, a bit of relative calm is giving the company the chance to get fitter.