Consumer Products and Services

Alcon independents show they mean business

20 Jan 2010

Directors landed a convincing first punch against Novartis lowball offer to the eye care group s minority shareholders. The legal arguments are complex, but the defence highlights fundamental issues about shareholder rights that Novartis will struggle to dodge.

Cosmetics takeover looks pricey but pretty

15 Jan 2010

Shiseido, Japan s largest makeup brand, is paying $1.7 bln for San Franciscobased Bare Escentuals. The deal allows Shiseido to expand in the U.S., where Bare already has a loyal following. At a 43 pct premium, Bare isn t cheap but the deal still looks attractive for investors.

Colgate outshines P&G in battling downturn

30 Apr 2009

Both consumergoods groups saw quarterly revenues fall. But because of a more discretionary product mix, P&G took a bigger beating. And as Colgate was more aggressive in trimming costs, it teased out a 9% rise in profit making it look more capable of weathering the recession.

Taylor Wimpey heads for debt-for-equity lite

26 Nov 2008

The UK housebuilder is close to testing banking covenants. Normally a debtforequity swap would loom. But TW's UK lenders will be loath to put shares on their books. And such a move might also annoy the banks new political masters. Equity sweeteners may square the circle.

UK retailers get another thing to worry about

25 Sep 2008

As if the consumer downturn isn t enough, antitrust authorities seem to be stepping up their probe into alleged price fixing by food retailers and suppliers. There won t be a quick resolution. But potential bad publicity and fines are the last things the industry needs

L’Oreal’s credit crunch excuse won’t wash

18 Jul 2008

The world s largest beauty group has blamed a slowdown in Western Europe for lowered annual growth forecasts and belowconsensus secondquarter sales. That makes a convenient excuse. But consumers may just be losing interest in midmarket luxury.

Gulf honey pot turns sour for Three Delta

4 Jun 2008

Qatar s £1.4bn buyout of Four Seasons has hit problems, driving a wedge between the state fund and its adviser, Three Delta. Neither side comes out of this smelling sweet but Three Delta s founder Taylor has more to lose.

Buffett fails to call bottom in financials

26 Dec 2007

Despite rumours he would rescue Countrywide, Bear Stearns or others, the Berkshire boss is shelling out $4.5bn for the Pritzker's old style industrial conglomerate Marmon. He may be growing risk averse in his old age but he's probably right in thinking there's worse to come.

Subprime conflagration jumps the debt firebreak

3 Dec 2007

It was originally fuelled by gobs of leverage, which forced entities like Bear Stearns hedge funds to dump assets to meet margin calls. But unleveraged funds, like those run by Florida, Montana and Connecticut, are being scorched. Only patience can help limit the damage.

YSL-Clarins merger makes sense

27 Nov 2007

PPR is reportedly in talks to inject its YSL perfumes subsidiary into Clarins. The combination would be good for both subscale businesses with good opportunities to cut costs. But PPR should hold out for a 30% stake in an enlarged group.

Black & Decker’s hammered stock may hold value

3 Oct 2007

Every gold rush needs its picks and shovels. Black & Decker prospered by selling tools for the housing boom. But it s suffering now. The real estate slump may get worse before it gets better. But Black & Decker's valuation provides an ample cushion for investors.

How far could US homebuilder stocks fall?

26 Sep 2007

Many have plummeted by half this year, but could have much further to go. In the early 1990s housing bust, they traded at only 50% of book. If asset values drop back to the levels seen before the worst excesses of the housing boom, homebuilder stocks may have to halve again.

Cablevision shareholders get a decent offer – finally

3 May 2007

Its independent directors sent the founding Dolan family packing twice before agreeing to a $22bn deal. The price is fair. The deal now has a better chance of being accepted. By holding out for a fair sum the directors have paradoxically done the Dolans a favour.

US consumption robust despite subprime woes

19 Mar 2007

A wave of defaults among less creditworthy homeowners will create only a modest drag on consumer spending. But problems at the lower end may filter up. If house prices fall further and lenders pull back, mortgagedfinanced consumption may shrink.

Foster’s ambitions give investors vertigo

24 Jan 2007

Lord Foster, the designer behind the "Gherkin", is mulling a sale of his architectural firm Foster & Partners, with £300m£500m pricetag. That would value the group at 200 times historic earnings rich by any standards, particularly at this stage of the global property cycle.

ServiceMaster unlikely buyout candidate

28 Nov 2006

But the experience of the group s doppelganger, UK firm Rentokil, shows a deal is unlikely. Previous buyout speculation has come to nothing. The $3.4bn extermination to lawncare conglomerate seemingly answered investors prayers by putting itself on the block.

UK banks say borrow away – forget that rainy day

7 Nov 2006

The 125%ofvalue mortgage is about to get a big push. And the inheritadebt mortgage has already reared its ugly head. What happened to the savings culture? In the UK and US, it has been drowned in a flood of liquidity. The loss will be regretted some day.

Electronics retailers may face holiday disappointment

3 Nov 2006

A retail slowdown appears to be underway. Big box electronics stores Best Buy and Circuit City look doubly vulnerable. Both carry high multiples. And competition is heating up as WalMart makes a big push into consumer electronics.

Share your housing gains with the bank

31 Jul 2006

That's not something the UK's bullish domestic property investors have been keen on doing in the past. But Morgan Stanley is trying again. Its shared appreciation mortgages are supposed to fight against expensive housing. But they exacerbate, not solve, the problem.

J&J pays whopping $16.6bn for Pfizer unit

26 Jun 2006

The US group is paying an eyewatering 25 times operating profits for Pfizer's consumer drugs division more than recent sector deals. J&J reckons it can deliver up to $600m of synergies. Those could be worth about $5.5bn not enough to justify this premium. J&J reckons it can deliver up to $600m in synergies. These could be worth up to $4.2bn not enough to justify the premium.