Leisure/Hotels

Bike-rental scheme could ease London’s transport woes

4 Sep 2007

Paris new bikeforhire system has been a fantastic success. Both Ken Livingstone and Boris Johnson are considering adopting it for London. They should. Not only would the next tube strike be less painful. The population would also get healthier and the city would make money.

Russians close in on UK football’s last gem

3 Sep 2007

But the Gunners might have a stronger takeover defence than their rivals. Arsenal already has a good business model and a brand new stadium. Arsenal is the last of the English Elite not yet owned by rich foreigners. Alisher Usmanov is 15% of the way to changing that.

The $100m bling skull marks art cycle’s turn

30 Aug 2007

That may sound like a lot of money for Damien Hirst s platinumanddiamond creation. But it s not really a jewel of a price. No one wanted to pay more than the sticker price. And Hirst paid $24m for the raw materials. Maybe he should stick to pickled sharks.

Meet the LBO that only lasted six months

15 Aug 2007

Even by current standards, Simon Halabi's leveraged buyout of health chain Esporta was short he only completed the deal in February. Unfortunately for the Syrian billionaire, it wasn't very sweet: he's likely to lose £150m. But the credit crunch isn't the only culprit.

Wynn shareholders should cash in some chips

7 Aug 2007

Las Vegas high rollers are on a hot streak. Casino like Wynn Resorts have delivered spectacular earnings, and shares have risen accordingly. Wynn s business looks good but its valuation is nearly as opulent as its resorts. Investors might consider taking a few chips off the table.

Debt tremors hit property deals’ weak foundations

3 Aug 2007

Consider Mitchells & Butlers shelved joint venture. What s surprising isn t that it was pulled, but how finely balanced it was. In such highly geared deals, a nudge upwards in the cost of debt or downwards in the performance of the business can decimate returns.

Expedia flies backwards with buyback

23 Jul 2007

In an embarrassing volteface, Barry Diller cancelled last month s plans to buy back up to $3.5bn of the travel website s stock. This isn t all that surprising. The deal wasn t much more than an overpriced, partial LBO disguised as a shareholderfriendly buyback.

Accor could be good private equity bet

6 Jul 2007

Blackstone paid top whack for Hilton. But Accor, the hotel group s French rival, owns more of its property and has more room for renovation. A buyer would have big shareholders to win over. But a 40% premium, or E21bn, might do it and still leave scope for a 30% return.

Blackstone digs deep in $26bn Hilton deal

4 Jul 2007

The buyout group is paying a 40% premium for the hotel group, which it will split between its real estate and private equity funds. Hilton s property backing gives Blackstone plenty of options. But even so, it may need to write a hefty equity cheque.

AA-Saga merger shows need for interest tax rethink

3 Jul 2007

Operating profits have been strong at both UK companies. But they have been kept geared up enough to avoid paying any profit tax. The merged entity is likely to be equally debtheavy and taxlite. It s a sensible corporate strategy in response to bad public policy.

AA and Saga agree to £6.15bn merger

25 Jun 2007

But the real juice in the deal seems to be the refinancing, which means private equity will get to take even more money out. There may be some logic behind merging the UK motoring services and insurance business with the travel and financial services firm.

Expedia opts for pricey $3.4bn leveraged recap

19 Jun 2007

The travel website is buying back 42% of its shares in a Dutch tender. Though large, its balance sheet can accommodate the gearing. The bigger question is whether it s getting good value for its money. At the midpoint of its offer, it would be paying 22 times EPS.

Sotheby’s shares are art world’s canary

11 Jun 2007

The famed auction house has seen its stock jump as cashstuffed buyers snap up masterpieces at record prices. But in the past, Sotheby s stock has foreshadowed the exit of these frenzied aficionados. Investors should keep a close eye on it now.

Online gaming still looks like a loser in US

6 Jun 2007

US lawmakers may be reconsidering last year s net gambling ban. But Partygaming and its peers would gain little from a regulated market. They d be up against US gambling titans like MGM, and probably have to pay tax. That makes it unlikely they ll see their IPO prices again.

How to hedge your bets with art

24 May 2007

Conspicuous consumption has made modern art a hot property. Last week a Rothko changed hands for a record $73m. Investors have lost a packet on fine art before. But maybe there are some ways the new wave of art buyers can improve their odds.

Blackstone steps to safety with Orbitz IPO

11 May 2007

The private equity group s purchase of $4.3bn worth of travel businesses from Cendant last year had all the elements of a high wire act. Loose credit markets have allowed it to extract its initial investment. Floating its internet subsidiary will reduce its heavy debt burden.

Whitbread not cut out for LBO treatment

21 Mar 2007

A buyout firm might covet the UK leisure group s £4bn property stash. But there s not much they could do that the company itself couldn t. Investors may have the spectre of private equity to thank for highlighting the value gap. But thanks is probably all they should give away.

Tui and First Choice £3bn merger makes sense

19 Mar 2007

The new group will become Europe s biggest travel firm. The synergies look juicy, and the UK s First Choice gets much better distribution. Merging with the Germans may not have been the UK firm s first choice. But as far as plan B s go, it s still pretty good.

Hedge funds launch Grand Theft company coup

7 Mar 2007

Steve Cohen and Paul Tudor Jones may seize control of TakeTwo, the videogame producer, without buying out minority shareholders. Given TakeTwo's problems, investors may welcome this. But it highlights a weakness in US shareholder protections that could be exploited.

Thomas Cook puts MyTravel out of its misery

12 Feb 2007

Putting together the underperforming UK holiday company with its more efficient German rival makes sense, given the scale of the synergies. The new debtfree company should be able to compete more vigorously.