Corporate Debt

Tyco lurches into breakup

13 Jan 2006

The anticipated split, into three parts, of the conglomerate that Kozlowski built will be accompanied by a slowdown in earnings. This underscores the need for splintering the company. But it also confirms the upside from the financial engineering will be limited.

US megacap stocks set to outperform

16 Dec 2005

During the late 1990s US largecaps became seriously overvalued. Now they trade at a discount to the market. Five years on, investors are still punishing these stocks. Yet they overlook the megacaps defensive qualities and relative value.

GM should file for bankruptcy

11 Nov 2005

And while it is at it, the world s largest carmaker should find a new boss to replace Rick Wagoner. GM is currently suffering death by 1000 cuts. Chapter 11 would give it the best chance of a rebirth.

Anglo American needs bolder strategy

30 Oct 2005

Last week s review did not go far enough. The UKlisted miner needs to sell more noncore units and improve its operational performance. That could add 30% to Anglo s market value. True, it might make the group more vulnerable to a bid, but that would be no bad thing.

Yahoo joins AOL fray

14 Oct 2005

It s easy to see why. Even if it doesn t get AOL, it has the chance to make life more difficult for its rivals. For Time Warner, though, a deal with Yahoo may not be the best option.

Time Warner may spin off more cable

21 Sep 2005

This is a good sign that the media firm's boss is willing to entertain shareholderfriendly proposals, such as those from Carl Icahn. Spinning off cable and buying back more stock might also buy Time Warner chief Parsons time to focus on his top priority fixing AOL.

Wallenbergs pay only lip service to modern world

12 Apr 2005

The new generation of the Swedish industrialist family has thrown investors a chicken bone with the management shuffle at Investor. It is doubtful the investment vehicle has a role to play. Spinning off its holdings in AstraZeneca, Ericsson and others would create value.

Finmeccanica shows the benefits of focus

7 Feb 2005

The Italian group, long a hotchpotch of disparate assets, is well on the way to becoming a focused aerospace and defence group. Finmeccanica still suffers a 1015% conglomerate discount, which could go. But the last bit of fat is always the hardest to shed.

BBA is a prime target for a break-up

2 Feb 2005

Keeping private jets high and babies dry have nothing in common. Value could probably be created by selling the nonwoven fabrics business. Speculation has already narrowed BBA s discount to the sum of its parts. But if a deal materialised, there s still some upside.

GE overpays for growth

24 Nov 2004

Even though Ionics is growing, at a price of 54 times earnings GE would need to double the company s profits to wash its face. This underscores the distance GE is willing to go to capture growth, which could become a risk for shareholders over time.

Romiti company probed over false accounting

24 Nov 2004

This is the latest blow for the Romiti dynasty, which used to be the powerbroker at Fiat, Mediobanca and Corriere della Sera. The probe could frustrate construction company Impregilo's planned capital increase, and the E550m bond repayment due in 2005.

Hanson dies

2 Nov 2004

The UK raider was an agent of change putting the fear of God into sluggish companies. He was a sort of corporate equivalent of Thatcher. Hanson's model of a conglomerate as a hostile bid machine was not durable. But at least he had the sense to break it up.

Buffett under pressure at Coca-Cola

10 Apr 2004

Influential shareholder advisers are recommending a vote against the legendary investor at Coke s April 21 meeting, calling him conflicted. Here is a perfect example of how shareholder activism can be downright nonsensical when applied in an orthodox manner.

Tyco trial ends in chaos

4 Apr 2004

The bizarre end to the sixmonth attempt to jail Tyco s top two former executives won t stop prosecutors from trying again. But the defendants will surely try to prove that Tyco was not alone in getting caught up in the excesses of the bull market.

Suez sells E1bn stake in French TV station

3 Feb 2004

The French utility wasted no time in offloading M6 after getting the green light from the regulatory authorities. The sale increases M6's free float by a third, and leaves Bertelsmann's RTL as the only major shareholder calling the shots.

US firms can buy FTSE groups entirely for stock

13 Oct 2003

So long as they are huge, that is, and are prepared to put a stiff collar in place. That s one of the lessons of GE s takeover of Amersham the first FTSE to be acquired by a US company in an allpaper offer.

It’s time to think about currency intervention again

29 May 2003

Global currency agreements, like the Plaza and Louvre accords, supposedly went out of fashion in the late 1980s. After a 20 year absence, they might be about to make a comeback.

French capitalism hands over to a new generation

29 May 2003

A quarter of the CAC40 has changed chief executive in the last 18 months. Civil servants are out of fashion, but not family heirs. And a francofrancais, male, closed shop still prevails.

Finmeccanica mulls demerger, cleanup

23 May 2003

The Italian defence group may merge its noncore assets into Fincantieri, then spin off its interest to shareholders. If it really wants to unlock value, a better plan would be to spin off its STMicro stake to investors.

Buyouts of public companies bubble up

17 Apr 2003

Is the glut of assets that so excited private equity buyers in Europe a year ago drying up? That's one interpretation drawn from the renewed interest in takeovers of midcap public companies, particularly in the UK.