Retail

Pernod’s pointless poison pill

9 Oct 2006

The French company s decision to opt for the Breton defence is puzzling. The group is familycontrolled, and not a likely takeover target. But even if useless, the new poison pill is wrong. It sends nonfamily shareholders the message they aren t welcome.

Tesco’s expansion machine still undervalued

3 Oct 2006

The UK supermarket group's H1 profits have powered through the £1bn barrier on the back of effective growth both abroad and at home. One day UK consumers may rebel against Tesco s sheer size. But for now, the market still doesn t give it enough credit.

PPR mulls further focus on luxury

27 Sep 2006

Selling the Fnac retail unit for E2bnplus would continue the French group s transformation into a pure play luxury goods business. In theory that should eliminate PPR s conglomerate discount. The one drag is its growing warchest. PPR should consider a return of capital.

Delhaize merger won’t get Ahold off the hook

20 Sep 2006

But other deals make more sense like Delhaize buying Ahold's US stores. That would also help unpick Ahold s clumsy conglomerate structure. A rumoured E25bn tieup between the two European retailers wouldn't fix Ahold's problems. The Dutch group needs to get smaller, not bigger.

Brown-Forman pays up to diversify

28 Aug 2006

The Jack Danielsmaker is paying 22 times operating profit to stock its bar with the premium Herradura tequila brand. This shows how pricy it will be for the family firm to create a full shelf on its own. A sale to Diageo or Bacardi deal would be quicker.

Can hedge funds get a hold on Ahold?

14 Aug 2006

Centaurus and Paulson want the E11bn retail group to sell its US businesses. They say that would add 30% to the share price. With only a 6.4% stake, the funds clout is limited. But if their case is good, they should be able to get other shareholders onside.

Buyout may not be best route for £2bn Signet

4 Aug 2006

KKR and Apax may think the UK jewellery group would do better if it spun off its small British operations and focused on the US. That may be right. But Signet investors might be better off if management were to adopt such a plan, rather than leaving it to buyout firms.

Peltz wins round in Heinz proxy fight

4 Aug 2006

America's most influential proxy advisor says investors should elect the reformed raider and two of his mates to the ketchup maker's board. The fight's not over yet, but Heinz management must start considering how it can play nicely with Peltz & Co on the board. The fight's not over yet, but Heinz management must now start considering how it can play nicely with Peltz & Co.

GUS should stand up to defiant bondholders

1 Aug 2006

The UK retail conglomerate has done its best to find a constructive solution with the bondholders trying to disrupt its planned demerger. Most the bondholders have accepted its terms. The holdouts are trying to bully it into handing over some cash. GUS should call their bluff.

Wal-Mart admits defeat in German trolley wars

28 Jul 2006

The retail giant failed to make the grade in Germany, thanks in part to savage competition and an inability to exploit its buying power. But the real killer? Its lowprice strategy wasn't a differentiating factor in a country already stuffed with lowcost stores.

Kingfisher needs more than a paint job

27 Jul 2006

Sure, the UK DIY group's Q2 trading statement shows the business stabilising, with sales up, gross margins flat, and Asia growing at speed. But don't be fooled. The UK business faces real structural challenges and it's not clear Kingfisher has the answer.

Amazon disappoints investors in 2Q

25 Jul 2006

Sales at Amazon continued to grow at a doubledigit pace, propelled by free shipping and further diversification in the products it sells. But profits plunged, sending its stock price down more than 12% in afterhours trading. The model Jeff Bezos built looks broken.

New LBO record a fading target

19 Jul 2006

Wall Street's hopes for a buyout bigger than RJR now look dubious as financing costs are surging amid heightened risk aversion. Deals already done, like Toys R Us, are struggling to refinance. And an $18bnplus LBO of HCA was scuppered by growing borrowing costs.

Do shareholder activists make good directors?

17 Jul 2006

That s a question Heinz shareholders are pondering as Nelson Peltz urges them to elect his five nominees for board seats. The record suggests that even if Peltz wins next month s proxy fight, it s no guarantee of longterm success for investors.

Burberry fights for luxury credentials

12 Jul 2006

New boss Angela Ahrendts plans to diversify the fashion group s range and tap highgrowth markets. That's a step in the right direction. But her real challenge is to fix the share price. Burberry is a luxury stock but one with the rating of a highstreet retailer.

M&S deserves more credit

11 Jul 2006

The UK retailer s shares have lost momentum and longstanding shareholder Brandes just cut its stake. M&S may be getting into the really tough bit of its recovery. But the market still isn t valuing it for what it s doing.

Matalan MBO puts minorities on the defensive

11 Jul 2006

The chairman and 53% shareholder is planning a bid for the UK retailer. But in doing so, he has already angered other investors. In this unusual situation, there s only so much the board can do. But they can at least hold out for a fair price or just say no.

What’s the best way to beat an activist?

30 Jun 2006

Time Warner management took the high ground against Carl Icahn and ultimately won, though shareholders might beg to differ. Heinz is taking a different approach and going for the jugular in its battle with Nelson Peltz. These tactics could backfire.

Ahold split would unlock value

21 Jun 2006

The sprawling retailer s performance is patchy, and its strategy unconvincing. No wonder hedge funds are starting to move in. With its 25% sumoftheparts discount, Ahold is a prime candidate for a breakup. Trouble is, its management seems not to agree.

Matalan LBO would be hard to swing

20 Jun 2006

A private equity bid for the UK value retailer would be difficult to square. Trading is dire, and there s little room for gearing. The best chance is for chairman John Hargreaves to launch a solo bid. But he might find it tough to offer a decent premium.