Corporate Debt

Candover deal offers certainty for Stork shareholders

23 Aug 2007

Sure, Candover s E47 offer for the Dutch conglomerate is well below some valuations. Iceland s LME could yet launch a higher offer. But Stork s problems in aerospace make estimates tricky. And with no other bid in a gloomy M&A sector, the devil you know may be preferable.

Unilever finally clears the U-bend

2 Aug 2007

A year ago critics claimed only a breakup could save the AngloDutch consumer group. Now profitability is rising, and so are the shares. Boss Patrick Cescau still has a long way to go to. But he has won the benefit of the doubt and Unilever s stock could rise further. Boss Patrick Cescau still has a long way to go. But he has won the benefit of the doubt and Unilever s stock could rise further.

Refco’s market return should be better this time

12 Jul 2007

The bust commodities broker will be popping back on the public market as part of MF Global, the Man Group division listing in the US. There are some risks in buying the remnants of Refco. But this IPO will almost certainly have a better outcome than the first offering.

Stork deal only a modest victory for shareholder activism

26 Jun 2007

The Dutch conglomerate's sale to Candover for a 19% premium ends its battle with two US hedge funds. But the big winner is Stork s bosses. They ll keep their jobs, their strategy and could even share in any upside by coinvesting.

Tyco bond battle produces no winners

15 Jun 2007

Investors say the industrial group tried to stiff them in a tender offer. They want it to pay the amount set out in their bond contracts. But that figure is based on Treasury yields. Rising rates mean investors would now only get about what Tyco offered last month.

LBO barons may find being public harder than they think

11 Jun 2007

Narragansett Capital, the private equity firm whose own MBO was thwarted by investors 20 years ago, could teach Blackstone et al a lesson. While Blackstone maintains it will be a different public company, it could run into the same challenges as its predecessor.

Big buyout firms are overstretched

8 Jun 2007

Private equity bosses claim to be value investors, yet they don t exhibit the discipline of the best followers of this investment style. Value investors, like Buffett, concentrate their portfolios in few businesses. That s no longer the case with leading buyout shops.

Bouygues plays hard to get on E10bn telecom unit

6 Jun 2007

Martin Bouygues, the French conglomerate s boss, says he doesn t want to sell despite interest from Egypt s Sawiris and KPN. But he could just be trying to get the price up. After all, a cash infusion could be useful if he buys Areva, the E20bn nuclear power group.

GE plastics deal highlights Immelt’s dilemma

21 May 2007

The conglomerate sold the division to the Saudis for $11.6bn. That s as much as 45% more than investors valued it in the GE portfolio. This is the problem GE faces. As its businesses grow but stock remains flat, the premium to the sum of its parts has disappeared.

Kleinfeld punished for Siemens’ good performance

25 Apr 2007

The German conglomerate tried to delay the contract renewal of chief executive Klaus Kleinfeld. So he decided to standdown. Siemens shares have risen 50% and operating margin doubled under Kleinfeld. His departure doesn t seem shareholderfriendly.

Carlyle prepares for the deluge – exclusive

15 Mar 2007

Its boss, Bill Conway, believes the boom won t last much longer. He wants downside protection and will accept lower returns on deals. Trouble is, buyout investors are only interested in whether a fund s performance is top quartile. For the moment, they re ignoring risk.

German CEO ousters necessary by-product of globalisation

14 Nov 2006

Deutsche Telekom s coup follows a similar one at VW. All in all, six of the top 20 German corporate heads are under pressure. The common theme the move from local to global is hard work. Germany is getting there, but the road is bumpy.

Branson gains fantastic publicity from $3bn green investment

22 Sep 2006

One has to pinch oneself to remember that the Virgin boss is the same man who runs airlines and only last year wanted to build refineries. But, if the world is to stop global warming, new industries like biofuels will form. The entrepreneurs backing them may make lots of money.

General Electric should let NBC Universal spread its wings

28 Jul 2006

Diversification has long been one of General Electric s greatest strengths. But NBC Universal, its television and film business, is an especially odd fit and a prime candidate for a spinoff.

For Buffett, the taxman cometh not

26 Jun 2006

By holding onto his investments longterm, Buffett has avoided capital gains taxes. By giving away his wealth to charitable foundations, he will additionally avoid paying estate and gift taxes.

Aramark MBO fraught with potential conflicts

2 May 2006

The CEO and his mates control almost half the votes. while the caterer s 2001 underwriters Goldman and Morgan are financing the $5.8bn deal. These are manageable conflicts, but only if the special committee of directors does a good job. This isn't always the case.

American IPO market froths up

3 Feb 2006

A handful of debuts have produced stunning firstday pops and nabbed lofty valuations amid record issuance so far this year. As a result, companies and private equity firms are frantically examining their portfolios for possible IPO spinoff candidates.

Massive US corporate cash pile won’t fund capex splurge

3 Feb 2006

It is often stated that corporate America's vast $2.5 trillion cash pile will finance a capital investment boom. However, when offbalance sheet liabilities like pensions and health care are taken into account, this cash mountain becomes a molehill.

Icahn enlists Biondi in Time Warner assault

30 Jan 2006

Set aside the fact that Frank Biondi s brother runs Lazard, Carl Icahn s strategic advisor on Time Warner. Biondi is still a catch. He s worked for and been fired from the biggest companies in the industry. Biondi adds credibility to a crusade that risked floundering.

GE needs to prune portfolio more vigorously

20 Jan 2006

A complete breakup of the mother of all conglomerates wouldn't make sense. GE trades at a premium to the sum of its parts. But GE should sell businesses like equipment leasing, consumer appliances, lighting and even media.