Rumble in rock garden presages more hostile M&A

December 12, 2011

That’s one way to read the unsolicited $4.6 bln offer that Martin Marietta Materials made for larger rival Vulcan. The deal won’t succeed without a sweetener. But the lesson is clear: if profits can’t be mined from the ground, they can still be found by cutting costs.

Morgan Stanley housecleaning will please Basel

December 13, 2011

Chief Executive James Gorman’s settlement with bond insurer MBIA puts a big chunk of the financial crisis legacy behind the firm. At $1.8 bln it doesn’t come cheap. But it puts Morgan Stanley on the right track by boosting regulatory capital and tidies up a very messy year.

U.S. energy bill beneficiary redefines going green

December 13, 2011

Oil billionaire T. Boone Pickens and U.S. Representative Nancy Pelosi are oddly aligned. A fuel subsidy proposal, if passed, would make them both richer because of their stakes in a “green” firm that would benefit. Congressional trading rules need an overhaul now more than ever.

Asian banks can’t fill gap as Europeans retreat

December 14, 2011

Lenders in Asia are flush with local currency deposits. But companies in the region got used to a world of cheap dollars. The only way most banks can lay hold of dollars is to borrow them, which could leave a $390 billion gap as global lenders pull back.

Fed shows outsized concern for too-small-to-fail

December 14, 2011

The U.S. central bank spent nearly two years scrutinizing the tiny takeover of a Utah lender by prepaid debit card firm Green Dot. The soundness of even niche banks matters. But in the too-big-to-fail era, the Fed’s slow process is an unneeded deterrent to the sector’s small fry.

Sino-Forest’s debt games are bad for creditors

By Wei Gu
December 15, 2011

The decision not to pay $10 mln interest may push the scandal-hit Chinese timber firm towards default and a restructuring process. Bond holders are in a weak negotiating position. Most of the assets, if they really exist, are inside China, where it is hard to enforce claims.

Two more black marks for James Murdoch

December 15, 2011

The News Corp boss has just unearthed new email evidence in the phone-hacking enquiry. That’s blot one. The message doesn’t destroy his defence that he was unaware of bad practice in 2008. But it contains serious allegations and Murdoch says he didn’t read it. Another black mark.

P&G didn’t crunch its Pringles partner adequately

December 15, 2011

Troubles have escalated for Diamond Foods, the agreed buyer of the chips brand, with the SEC now probing its accounting. The scale of issues being targeted suggests the consumer giant missed early warning signs. An obsession with taxes may have clouded P&G’s vision.

Olympus must dump its board to save itself

December 16, 2011

The Japanese company’s board wants to hang on until March. That’s too long. Even though it beat an earnings deadline, Olympus still risks being delisted over ongoing accounting concerns. A fresh board can only help, and should also placate creditors and help buoy up the stock.

Did MF Global clients forget Lehman’s lessons?

December 16, 2011

The bankrupt broker stands accused of misusing client funds. One theory is that it used customers’ money through a legal process called rehypothecation. The U.S. imposes limits on the practice, but the UK doesn’t. It’s a lesson investors could have learned from Lehman’s collapse.