Marc Bolland nominated CEO of M&S

After three successful years as the chief executive of Morrisons, Mr Bolland heads now to Marks & Spencer. The retail giant spent a year looking for a new CEO before finally choosing the 'flying Dutchman' this week. Now expectations are high, since his nickname is not only related to his origins in the Netherlands, but also because of the good he has done to Morrisons. Bolland was barely known in the market before taking the job there, however after reverting the supermarket's downturn tendency in profits, ongoing at that time, he is believed to move M&S forward in the current turbulent scenario.

I read this story in 4 major sources: The Guardian, the FT, the Daily Mail and The Independent.

In general, they sounded pretty optimistic in their views, but it is still noticeable the different approaches used.

Browsing the Financial Times website I could find 3 articles on this topic. Two were pieces of news and the other was from a column. Andrea Felsted was the correspondent for both of the news. In the first one, she kept a rather informative tone and apart from mentioning the variation in the share prices (up for M&S and down for Morrisons) she highlights his trajectory, even pointing out the critics made so far about the fact that is a "food man", meaning he could have trouble with the new job. Her second article "Bolland must wear two caps at M&S" informs about how the new CEO will have to deal with the position he has at Morrisons until January (end of the fiscal year), after the announcement has been made. In this one right from the beginning she does not sound totally in favour of the deal, or at least not in the way it was made. She quotes him in the previous months and alerts for the vast choice M&S had. On the other hand, still at the FT website, Andrew Hill dedicates his column to state all the good reasons for choosing Bolland, in a rather optimistic article.

The Guardian and the Daily Mail did not differ that much in their approaches. They both published simple texts to relate this new fact. As expected, there was a generous part dedicated to explain who Marc Bolland is and what he has done. The Mail gives an enthusiastic tone to this story, from Sir Stuart Rose fashions M&S top job for Marc Bolland (headline) to the sensationalism from the short statements below. The Guardian remains more formal throughout the article, however they both sounded pretty optimistic, mentioning only Bolland's achievements so far, and not the possible negative aspects - like Ms Felsted did for the FT.

The Independent, as a good tabloid, talks about the City's response to the announcement in a quite exaggerated way, after the markets reacted really in favour of M&S. As well as numbers, there is a big space for the Mr Bolland's history in the business.

Therefore, after reading all these sources my opinion is that Marks and Spencer should benefit from the fact that it will have a good CEO, recently proved by the Morrisons experience. After all, a supermarket who had profit troubles since 2004 saw its financial health back as Marc Bolland stepped in. As the other piece of news from the Independent says "Morrisons reveals growth 'well ahead' of rivals" and that is why I believe even though it seems clear that Bolland is not really experienced in the clothing and other sectors that are also in M&S, the ones that should be more cautious are from Morrisons, in order to choose the right new CEO and not fail after Mr Bolland is gone.

The Financial Times:

http://www.ft.com/cms/s/0/8d85cb20-d438-11de-990c-00144feabdc0.htm

http://www.ft.com/cms/s/0/9fa3e1bc-d47d-11de-a935-00144feabdc0.html

http://www.ft.com/cms/s/0/d7c46fac-d442-11de-990c-00144feabdc0.html

The Guardian:

http://www.guardian.co.uk/business/2009/nov/18/marc-bolland-marks-spencer

Daily Mail:

http://www.dailymail.co.uk/news/article-1228920/M-S-names-Morrisons-boss-Marc-Bolland-new-chief-executive.html

The Independent:

http://www.independent.co.uk/news/business/news/ms-shareholders-cheer-bolland-appointment-coup-1823134.html

http://www.independent.co.uk/news/business/news/morrisons-reveals-growth-well-ahead-of-rivals-1823409.html

HP's $2.7mi negotiation with 3com

HP confirms its position as one of the technological giants with the announcement of a millionaire deal to buy 3Com. The move marks the expansion of HP's corporate product line. 3Com coming to reinforce its presence in the data centres, combined with the networking solutions already avaiable. Also, it's being considered a big step in the competition against Cisco, since it will influence directly the main operations of this top company - major market rival. In addition, HP will benefit from a firmer position in the Chinese market, where 3Com had reasonable growth in recent years and retains good market share.

In the financial press, I could basically find this story in 4 sources: BusinessWeek, the Financial Times, The Wall Street Journal and Reuters. Generally speaking, the US and the UK media published pieces with similar contents. However, within the American publications there has been some notable differences in the approach to this news.

Cisco is mainly involved in the impact caused by the advances of this deal, and that's on what BusinessWeek decided to focus. Right from the headline and first lines the author makes it clear that his assumption is that this negotiation has been made in order to secure HP's place in the business by calling the attention of the market, especially Cisco's since it is the current "big boss" when it comes to switches, routers and related equipment. The author also adds briefly the importance of the deal in conquering China and finalises with a hopeful tone by mentioning HP's financial figures.

Still considering the outcomes of this acquisition to HP operations in the Chinese market, the FT provided a an article in which the details of 3Com's presence in the Asian country was clarified. Hence the role of Cisco in the news wasn't given much space there. The correspondent sounded quite optimistic in my view, by the way he talked about the expanding opportunities 3Com might offer to HP.

Reuters, characterised by its straight-forward tone typical from press companies, states the main facts surrounding the negotiation using bullet points as well as fast reading sentences which can be very understanding. As a result it mentions a bit of everything, from HP's reputation in the business to Cisco's and China's future impact. Besides, it gave me a broader view of the ongoing situation in the technological market which could be summarised with one of the sentences: "The deal is the latest sign that technology giants from IBM to Oracle Corp are increasingly encroaching in each other's markets as they seek to become one-stop shops for computing, networking and data storage".

Finally, the WSJ's piece for this story emphasises Cisco's role in the acquisition too. But, the author decided to picture that reviewing recent moves in the areas concerning hardware and software, and even other device producers - dispersing a little bit in my opinion. Thus, I wouldn't consider that article really biased, yet phrases like "Buying 3Com was a surprise" and the general tone that is not actually informing about 3Com's good points gave me the impression of his personal view to be more critical.

All in all, the sources I chose here seemed pretty clear and not that favouring to any either side of the competitors involved. Indeed I find it a good thing the different approaches and way of detailing the information, the readers are the ones who are benefited from that. As for the deal itself, my personal view is that HP has a great potential to absorb from 3Com. Nowadays in the business scenario it's widely seen 2 ongoing trends, companies gathering in order to strengthen in a world of increasing competition and the rush to conquer developing markets, mainly the most believed one which is China. Thus, notably HP can combine both and take advantage of a firmer position in the sector in it's possibly successful path in the future, which will alarm its rivals. Therefore, if I were to chose one of the articles I'd go for a combination of the FT and Reuters, that would lead to a piece of news including what I've just mentioned above. The negotiation is to be completed in the first half of 2010, so let's see with which quality HP will really print this deal.

BusinessWeek:
http://www.businessweek.com/technology/content/nov2009/tc20091111_279456.htm

The FT:

http://www.ft.com/cms/s/0/64850f9e-cf1d-11de-8a4b-00144feabdc0.html

Reuters:

http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN1138008420091112

The Wall Street Journal:

http://online.wsj.com/article/SB10001424052748704576204574530001155685762.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Bravo! ATG-Live Nation buyout spetacle

This weekend the Ambassador Theatre Group (ATG) is completing the purchase of Live Nation's 17 UK venues, becoming by far Britain's top theatre operator in size.

Although the official announcement is scheduled for Monday, hands can already be clapped as details of the deal have been published by now. This final bid comes approximately 4 months after Live Nation put them on sale. At that time, when the bidding had opened in July, the number of interested was about 20 and, as the Guardian highlighted, the selling price was believed to exceed 75 million pounds (finally, the price asked by ATG was £92mi). Also, that article already expected something from the ATG, Qdos - a more modest theatre operator maybe willing to gain market -, Key Brand - company which already acquired US Live Nation theatres - or Stage - Dutch-owned operator and producer currently presenting at West End. As published, the first one would surely be likely to expand its operations, once numbers matter in that sector and since they were even then a leading group, an acquisition of this size would isolate them as number 1 in the business, resulting in more control over producers. That should be a good initiative, but it was also noted that an increase in the supply of seats could have its drawbacks, especially after their not-so-successful "Guys and Dolls" recently. All in all, however, the author was pretty optimistic about the whole idea of selling because, according to him, it would lead to better quality venues. In my opinion, on the other hand, the articled showed some bias aspects as to his preference for ATG.

In addition, apart from the early bidding history, the purchase is announced barely 1 month after the UK antitrust authorities stopped a merger process between Live Nation and Ticketmaster, for the ticketing department. The FT had a story on that in early October and tried to maintain a neutral view of the fact, though bad news are in their essence not pleasant and I couldn't really notice a pitying tone in the article. Authors did point out the impact in the stock market and related aspects of mergers in the present, which could give a broader view on the subject for the readers.

Thus, the news wasn't too much of a surprise. In fact, as The Stage published, it has "been long anticipated by the UK market". Alias, this newspaper focused more on the managing side of the story, by writing down the name of every single venue agreed in the deal as well as how the theatre business is affected by the agreement, especially when it comes to the supply of seats in London. Still, concerning the financial aspect of the story, I could only find the speculation about ATG's funding for the bid - widely thought to come from outside finance.

The other source that I used was the Times. As emphatic as Sunday newspapers are in Britain, this article emphasises more of the new owner's world. So, the approach used ranges from the company's history to business anticipation now that the acquisition is complete. It does show financial figures behind the deal and a solid one-sentence statement about ATG's funding: "The deal is being financed from increased bank borrowing and new cash raised from shareholders". By the way, venue names and the supply of seats were also mentioned in this source, but shortly. In my view, it was good that the author could remind the readers about the Live Nation-Ticketmaster failed attempt to merge and LN reason to sell the venues; keep its operations focused on the booming segment of live music.

Accordingly, these two pieces of news I found didn't really demonstrate any bias to me. They more factual and more informal in the Sunday Times, as I already expected. Anyway, my idea was to check how a specialised paper's coverage would differ from a more general one, and actually they tended to follow the same format, to some extent. I could mainly notice the fact that The Stage named each and every theater, whereas the Times had more financial numbers instead.

Ultimately, my opinion on this story follows the one from Mr. Shenton, the Guardian's author back in July. I believe this transaction will probably be a good thing for costumers. After all, Live Nation will maintain it's business oriented to what they already do best, promoting concerts. That way they shall come up with even more contracts with the world's top performers, benefiting the fans. On the ATG's side, they'll be dominating the theatre business here in the UK, and I hope they use all their influencing power with producers to bring selective shows to theatres, as well as investing in them so that people have an even better experience when going to musicals, plays etc. As he noted, "It's a striking and inescapable fact: the most powerful people in commercial British theatre are not directors, or even producers, but landlords", so I reckon that's the reason the we should keep an eye on them if we desire theatres change for the better, in either side of the footlights.

The Guardian (July 15):

http://www.guardian.co.uk/stage/theatreblog/2009/jul/15/west-end-live-nation-theatres

FT (October 8):

http://www.ft.com/cms/s/0/6dae8f7a-b3d2-11de-98ec-00144feab49a.html

The Times:

http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article6898117.ece

The Stage:

http://www.thestage.co.uk/news/newsstory.php/26071/exclusive-atg-to-complete-92m-live

Barclays moves forward

This Monday another big deal was announced in the UK banking sector. Barclays, one of the world's largest, agreed to acquire Scottish insurer Standard Life in a 226 million-pound transaction. The Edinburgh-based bank aimed to be one of Britain's leading institution back in 1998, during its creation. Now after eleven years it is selling its mortgage and savings arm, worth 8 million pounds, for a lower price than estimated (£300m-£400m). Barclay's move intensifies even more the sector's competition, as less and less mortgage lenders are left standing. Also, at a time of positive thinking, it marks a new step in the bank's path following its credit crisis performance, somewhat better compared to the others'.

The stock market didn't seem to be that convinced, though. Both companies' shares declined today, BARC at of rate 2.45% while SL closed down 1.5%.

As for the financial media, it's possible to say that, to some extent, the same applied. I've read this story on the Guardian, The Times, the FT and the Herald Scotland. In general, the first ones published a similar format of article, which was not as gentle as the last two. Considering the information given, however, they basically showed the same type data.

The Scottish paper focused mostly on the financial aspects of the transaction. In short paragraphs and sentences it revealed the reason (according to SL CEO's Sir Sandy Crombie, new objectives in the long-run) and aims (of a mutual cooperation) behind the deal. Also, it reminded us in a quick passage about the employee's destiny as the transaction takes place. Contrary to what I firstly thought, it wasn't really a Scottish-oriented article. Apart from publishing SL's headquarter in Edinburgh, it was pretty neutral to me.

In contrast, the Guardian and The Times seemed a little bit too sensationalist in my opinion. The Times, especially, right from the headline opted for a more shocking than informative one. As both articles went by, their writing style was comparably alike. Either interpreted the story as a sad end to Standard Life, reacting extensively critical about the transaction, in a way that gave me the feeling that it shouldn't have been done, or at least that it wasn't indeed something expected. The use of the expression "to throw in the towel" by the two editors possibly summarises my view on the articles - in meaning as well as in originality. Besides, information divergence left me in doubt whether SL had ten or eleven years of establishment.

Finally, the Financial Times gave me a rather clear view of the agreement. Differently to the ones mentioned above, it didn't emphasise the fact that SL was giving up on its ambitions and so forth. Its correspondent paid more attention to the surrounding facts of those institutions and the banking sector itself, including a reference to Barclays recent history of coping with the crisis.

Therefore, this was an interesting story to me, because it is reflecting the current stage of the world financial crisis, of new perspectives and an increasingly agitated competition. After this Standard Life deal, Barclays moves forward after a likely successful management throughout the late turbulent times. Thus, my own view differs from that of The Times and the Guardian, because I believe them both will benefit from that by working together as a rather concrete financial institution in the UK (and world) market, which can feasibly draw substantial changes in the sector, in next to no time.

The Guardian:
http://www.guardian.co.uk/business/2009/oct/26/standard-life-bank-barclays

The Times:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6891211.ece

Financial Times:
http://www.ft.com/cms/s/0/857a78e2-c27a-11de-be3a-00144feab49a.html

Herald Scotland:
http://www.heraldscotland.com/news/home-news/barclays-agrees-to-buy-standard-life-bank-1.928653

GE and the economic crisis

World markets were alerted this week as GE published its third-quarter results - and so was the financial media.

The multinational giant caught the world's attention after showing unfavourable figures in comparison to last year's data. Profits shrank 44% to 2.419 billion dollars, against USD 4.312 bi for the same period in 2008; Revenues were reduced by 20% to 37.799 billion dollars. That was mainly explained due to losses in the company's financial branch, GE Capital Finance. There, income slumped 87%, even though it is still the segment which generates the highest revenues in the group. GE's other divisions Energy Infrastructure and Technology Infrastructure earned 1.6 billion and 1.7 billion, an increase of 11% and fall of 8%, respectively.

For many analysts, however, it did not come out as a total surprise. Forecasts were even more pessimistic concerning GE's performance, and that led to mostly soft articles in the media. Shares were down 0.8%.

This week I will be comparing the differences in reporting this story by a British newspaper (FT), a Brazilian newspaper (Valor) and a French news agency (AFP).

From my research, what I realised is that the articles, as a whole, tended to offset the negative aspects of the news by actually looking at GE Capital recovery plan, the good market perspectives and the better-than-forecasted argument. With so many negative figures exposed by the company this may sound a bit controversial, but to be honest for me it seemed like editors are already looking forward, to the bright end of the crisis - believed to be on the way -, and not that worried about dark past results.

In this sense, the Brazilian and French sources could be two examples. Valor did mention the "red numbers", however it emphasised the fact that GE's cost cutting and industrial profit did not give the company such bad results as predicted. Also, that GE Capital, which is the big responsible for the downturn, looks stabilised and with a good risk management it can still be going as a leading segment for the company.

AFP basically followed a similar approach to story. GE's numbers were pointed out and even though were reflecting the bad economic situation they were still better than expected. All in all, it was a rather positive article, only reminding that "cost cuts at many large firms may help profits in the short term but will not sustain profit growth", in the end.

The Financial Times, on the other hand, gave me a pessimistic impression of the story. Right from the headline and the first line it focused on how bad the results were and its negative consequences. Such alerting numbers by GE leave space for that, surely, but probably the fact that the correspondent decided to add the combination of BoA's, S&P 500 and Dow Jones loss results and also seemed not to be very convinced by CEO Jeff Immelt's arguments, left the focus more on investors still expecting "that GE will convert its record backlog into higher revenue".

Thus, my view for this story is that GE Capital profits were really impaired by the estate sector, as a direct result of the economic crisis that we are going through. However, as it is foreseen that recovery is on the way, GE will be amongst the ones that will benefit and improve together with the economy. For now, in my opinion, it is a good thing that the numbers were not as bad as analysts thought and that its CEO can talk about stabilisation in the troubled GE Capital. Therefore, it seems to me that GE engines are strong enough to resist this cloudy period, if they are kept with the right maintenance.

Financial Times:

http://www.ft.com/cms/s/0/b767bc8e-ba46-11de-9dd7-00144feab49a.html

Valor Online:

http://www.valoronline.com.br/?online/empresas/11/5874326/lucro-da-ge-cai-mais-de-40%-no-trimestre&scrollX=0&scrollY=528&tamFonte=

AFP

http://www.google.com/hostednews/afp/article/ALeqM5j7LsoCa4CGf38fX8j-DhBV0Mj5Ew

The end of BAA's monopoly?

This week I will be talking about a story that will possibly lead to substantial changes in the way airport businesses are conducted here in the UK. Gatwick’s sale negotiations seem to be coming to a deal as BAA’s appeal hearing is just a week away.

The company, which has maintained a 40-year monopoly of London’s main airports, might have already sold LGW by October 19, when The Competition Appeal Tribunal hearing is due, and although Gatwick negotiations are well advanced, BAA will appeal over the order to sell some of the other ones it owns (Stansted and either Glasgow or Edinburgh).

Ferrovial, Spanish infrastructure company controlling BAA, is expecting a deal of about £1.6 billion and an investment fund started by Credit Suisse and General Electric is said to be the most interested. Global Infrastructure Partners (GIP), as it is called, already runs London City Airport and offered 1.36 billion pounds earlier this year. This time, however, both parts seem to be moving to a final deal, which will finally meet Ferrovial’s price and conditions.

In the financial media I could find three different approaches to this story. I found it at the Financial Times, the Telegraph and The Sunday Times.

As careful and clear as it could be, the FT correspondents in London and Madrid gave me a broad view of this story, attempting not to speculate about it. They explain the past events surrounding the negotiation and mention the possible acquisition by GIP, though they also alert about another bidder that is still being considered by Ferrovial. The article finishes with a brief preview of how the deal would positively affect BAA’s troubled finances.

The Telegraph chose a similar style but it actually published a smaller article for this story. It tells straightly about the bidding process so far by GIP and its anticipated move for LGW this week, including a quick description of BAA’s appeal over the Competition Comission’s decision that is coming up.

Finally, The Sunday Times was the one that mostly called my attention, since its article relates the story as if the negotiation was decided by now. It basically focuses on how the GIP acquisition will take place. Thus, it showed to be a pretty biased piece of news as its journalist is not very careful about telling how the negotiation has been going. Mr. O’Connell leaves the date for the deal as uncertain – even though speaking about “the next few days” – and mentions the possibility of the talks falling through. On the other hand, he surprised me by telling in one the first lines: “The new owner and operator of the airport will be Global Infrastructure Partners (GIP)”.

Therefore, after reading these three sources of financial media my opinion is that a deal between BAA and GIP seems to be imminent. Since May, when the other bidders abandoned the “race” to Gatwick, it is now the moment that is felt to be closer to a final deal and, to be honest, my view is that it will probably be a good thing for everyone. BAA will solve one of the orders of the Competition Commission and will find a way to meet its existing bank debt that is due in March. For the GIP, they will then be in control of two important airports in Britain, which is expected to stimulate the competition against BAA and finish the monopoly that lasted 40 years and proved not to be positive – with the resolution of the CC to force BAA to pass the control of some airports in order to improve passengers and airlines’ services. Thus, for me, as a traveler that did not have a great experience in LGW, the long-run outcomes of a successful negotiation look as bright as a clear sky.


The Sunday Times:

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6869413.ece

Telegraph:

http://www.telegraph.co.uk/finance/newsbysector/transport/6300422/Gatwick-sale-back-on-as-talks-progress.html

Financial Times:

http://www.ft.com/cms/s/0/fbf07dd0-b68d-11de-8a28-00144feab49a.html

Xerox' ACS acquisition

For this very first post I chose to write about one of the main headlines from this Monday (28 sept): ACS takeover. Digital printer giant Xerox moved forward into business process outsourcing as it combined cash and shares in a £ 4 billion deal for Affiliated Computer Services earlier today. The acquisition, however, did not come as a total surprise. Financial media sources were already reporting in its morning editions this expected transaction. What did come as a shock though was that XRX shares fell by 14% at the New York Stock Exchange, which led to different writing views at the late night online editions of The Times, BBC and Financial Times.

The video below summarises the media's morning coverage of the story.

Noticeably, ACS takeover was foreseen to be another major transaction in the technology sector, following Perot Systems purchase last week. In its early updates, financial broadcasters seemed to be rather optimistic about Xerox' deal. Yet, this evening's release of the 3 sources I could find already shows different views of that.

Even though Xerox successfully launched its deal for ACS, it looks like it was not very clear for the Financial Times whether that is a clever move the companies. Its correspondents update was pretty pessimistic, in my opinion. They do mention in a few lines Ms Burns (chief executive of Xerox) ambition, but the majority of the article is dedicated to the writers' negative view of this deal, from the headline and first paragraph's description of the XRX shares today to a reminder of Xerox' difficult "transition to digital technology" and Deutsche Bank analysis by Mr Whitmore who defined the takeover as "lack of confidence".

In comparison to that, Times Online published a pretty objective article for this story, using clear statements for the facts surrounding this transaction. No evidences of bias in that, even after telling the shares' balance of the companies for today.

The BBC news website version of the story mainly matches the statements from the Times. On the other hand, it gave me the impression of a quite positive way of thinking of the takeover. The market data for XRX and ACS shares are only the final lines of the introduction, whilst most of the article is dedicated to the companies' possibly successful future plans and the greatness of the deal (including the headline).

Thus, after reading these articles my own opinion about this story is that it should be a smart move for both parties. For ACS as being taken over by a internationally respected company, especially when it comes to office solutions, which can grant global recognition for its products. As for Xerox, it is paving its post as a office-oriented giant, that follows technological giants Dell and HP recent transactions to increase annual revenue and spread its offers to wider range of clients. The initial outcome may not be the best for the acquisition (as XRX shares showed this Monday), however in the long term a combination of business process outsourcing and Xerox' expertise and prestige sounds pretty positive to me.

Financial Times:

http://www.ft.com/cms/s/0/e2a14ed4-ac26-11de-950b-00144feabdc0.html

BBC News:

http://news.bbc.co.uk/1/hi/business/8278713.stm

The Times:

http://business.timesonline.co.uk/tol/business/industry_sectors/support_services/article6852432.ece