Energy

How should arbs play Suez-GdF?

13 Sep 2006

Since Suez shareholders are going to find it harder to extract better terms from GdF, the 10% arb gap should shrink. But Suez shareholders can and should vote the deal down if the terms aren't improved. Doing so would put Suez back in play.

GdF privatisation: right choice, wrong reasons

7 Sep 2006

France wants to privatise its gas monopoly in order to merge it with Suez and so stop the latter being snapped up by a foreign group. Although the government s motives are contorted, privatisation still makes sense. But approving it shouldn t mean approving the Suez deal.

Knight Vinke fires shot across Suez bows

4 Sep 2006

The French government is confident approval for the Suez/GdF merger is in the bag. But the shareholder activist has a credible rival plan. It may not be enough to derail the process. But it sends a clear signal to Suez. It can expect a big fight over the final deal terms. The French government is confident approval for the Suez/GdF merger is in the bag. But the shareholder activist has a plausible rival plan.

BP’s problem before Browne’s departure: it’s too big

1 Sep 2006

Lord Browne quadrupled the group s size while CEO, but only delivered investors soso returns. His M&A spree also increased BP s complexity. That is a common problem among big dealbuilt firms.

BP’s trading creates reputation risk

30 Aug 2006

The energy giant s ownership of infrastructure assets and extensive trading operations creates a potential conflict of interest. After a spate of recent troubles, its traders are being investigated for allegedly manipulating oil and gasoline markets.

Kinder Morgan buyout nears conclusion

28 Aug 2006

True, boss Richard Kinder and his consortium have only bumped up the offer price by 7.5%. That s hardly stunning. But it s slightly more than independent board members at Aramark and Kerzner International squeezed out of their acquisitive executives.

BP falls behind Shell for first time in four years

24 Aug 2006

It's not just BP's reputation that has been damaged by the Alaskan fiasco. Its stock rating has suffered too. Shell's market capitalisation has just surpassed BP's, as its own tattered reputation has improved a tad and BP s halo has slipped.

Rosneft bankers stand by their client

15 Aug 2006

The underwriters of the Russian oil giant s IPO have exercised 58% of their overallotment option, paying more than the market price. Investment banks don t always accept losses so readily. But the cost of loyalty is minimal. And Rosneft is no ordinary client.

BP in yet another US blunder

7 Aug 2006

Even if BP's Alaskan pipeline is closed for the rest of the year, it's unlikely to make a huge dent in earnings. But the real damage is the blow to its reputation. This company is starting to look seriously accidentprone.

Trust Browne to do the right thing

25 Jul 2006

BP s chief executive is stepping down, as agreed, in 2008 after 13 long years in power. This should make succession planning, already under way, much easier to execute.

E.on to get a rough ride in Spain

25 Jul 2006

The speculation in Madrid is deafening. It seems the German power group is going to have tough time getting its bid for Endesa through. It's hard to see how the regulator could justify imposing tough conditions. But it leaves E.on with a difficult dilemma.

Rosneft: big company with a small free float

20 Jul 2006

On paper, some 15% of the Russian oil firm is held by private investors. But in reality its free float is less than half that. That may not be enough to provide an accurate reflection of Rosneft s true worth. Its IPO was managed . Its market may be too.

Yahoo stock tumbles after disappointing quarter

19 Jul 2006

Yahoo's rising marketing costs pushed ebitda down 11% in the second quarter. But while these shaky results inevitably depressed Yahoo shares, it seemed premature for investors to punish Google shares too.

Morgan Stanley should take heed of BP’s troubles

18 Jul 2006

By buying midstream energy assets, the bank s traders may have a clearer window into how asset prices will change. But as BP s trading scandal illustrates this advantage can become a liability if the byproduct of knowledge is market manipulation.

Expensive oil may yet drag global growth

17 Jul 2006

The global economy took the fourfold increase in oil prices in its stride. But that was a time of easy money and petrodollar recycling. But now that interest rates are rising, further oil price rises could prove much trickier. The global economy took the recent increase in oil prices in its stride. But that was in a time of easy money and petrodollar recycling.

Rosneft prices at a chunky premium to Lukoil

14 Jul 2006

At the top of the range, the Russian oil firm is valued at a 20% premium to its privatelyowned peer, on a per barrel basis. Investors squeezed out by strategic and Russian buyers should ensure a healthy aftermarket too.

Oil majors change nationality

13 Jul 2006

Fifteen years ago, all the listed oil majors were Western. Now, with Rosneft s IPO, less than two thirds are. The fall of the West s oil dominance will accelerate. The question for investors is how to extract better governance in return for capital.

Greed triumphs over fear in Rosneft IPO

12 Jul 2006

The Russian oil group seems to have persuaded some institutional investors to pay top dollar for its shares. But that s more to do with not wanting to be left behind than anything else.

Rosneft investors: don’t expect miracles from Rudloff

12 Jul 2006

As the only nonRussian independent director at the oil group, the Swiss banker may push for governance norms. But will Rosneft listen? Rosneft hasn t been solicitous to investors during its IPO. There s no reason to believe it will change afterwards.

BP mulls buying Rosneft stake – exclusive

30 Jun 2006

At first glance it doesn t make sense. Why would the UK firm use its capital to buy a minority stake in an overpriced and controversial IPO? The answer is simple. It would be buying an insurance policy for its existing Russian assets.