Time Warner's One Night Stand

By Heather D'Alton Dec 07, 2005

*** Apax calls in the heavies

*** Sterling hits 14-month low versus the dollar

*** Why the G8 are wasting our money...good news for the UK economy...when the Swiss rail system collapses...and mor          

– Private equity group Apax is rumoured to be teaming up with heavyweight Time Warner in order to launch a bid for ITV. That was the news that sent ITV’s shares up some 8% at one point during the day. By London’s close, shares traded 3% in the black, and closed as a top blue chip gainer.

– With ITV worth a pretty £7bn, it’s clear to see why Apax would need to call in the heavies to impress the telly group. But perhaps the real  question to ask is: what’s in it for Time Warner? And does it really want a long-term relationship with ITV...or is it simply out for a fling?

– ITV’s 4p share price hike helped lift the FTSE 100 to new three-year highs. The index gained 23 points, to close at 5,184. The FTSE 250 slipped 0.2%, to trade at 7,434. However, with Americans enjoying their Independence away from Wall Street, a meagre 1.7bn shares were traded.

– The oil sector rocketed 5%, with BP closing 4% up ahead of its trading statement, due out this morning. Shell also added 2%, as Nymex crude traded 4% up by London’s close, at $58.75 a barrel.

– Pernod Ricard shareholders, the US authorities and European authorities have all given the green light for the takeover of Allied Domecq by Pernod to go ahead. And now Allied investors have also given the thumbs up to the deal...by an overwhelming 99.8% majority.

– The bid – now only awaiting approval from Canadian authorities – will see the world’s second and third largest spirits groups team up to take on world number one, Diageo. Ironically, Diageo will also score from the deal, after it threw its weight behind Pernod and joined the consortium. It’ll buy Pernod’s Bushmills Irish whiskey, and have the option to buy Allied’s Montana New Zealand wine. Allied’s shares traded 0.3% up yesterday.

– Supermarket Somerfield fell 2%, despite Iceland’s Baugur assuirng investors it had not pulled out of its bid for the retailer. Baugur chief executive Jon Asgeir Johannesson and family – his father and sister – have allegedly been accused of falsifying invoices, tax violation and embezzlement at Baugur. Somerfield is due to report its preliminary results tomorrow, and closed 4p down at 191p.

– And sterling fell to a 14-month low versus the dollar – as the UK faces potential interest rate cuts on Thursday, while America could be hit with more rate hikes next month. By London’s close, the pound traded 0.1% lower at $1.758, and fell some 0.3% against the euro, to trade at 1.477 euro.

------------------    Why The Gleneagles Summit is a Waste of Time and Money– The meeting of the G8 nations – which will include leaders from South Africa, China, Brazil, and a number of African states – could not be “more ambitious”: the agenda includes climate change, Africa, Iran and the Middle East, says Brian Durrant in the Fleet Street Letter. So will this summit be any different from the previous thirty in “achieving nothing at great expense to us taxpayers”? Not likely: the summits are more often than not merely remembered for their lavish hospitality or the noting.

A Little Time– Bank of England governor Mervyn King would be wise to not make any “hasty moves” which will later need to be reversed, says F&C Economist Steven Andrew. That’s why he should not rush to slash interest rates just yet – despite the disastrous June retail sales, which experienced its weakest headline sales balance in some 22 years. Moreover, while the UK economy saw a dismal 0.1% quarter on quarter growth in Q1, things should look up for the second quarter of the year...

A Swiss commuter’s everyday life– “Imagine your train stopping in the middle of a tunnel…” That’s by no means a tough stretch for the creative faculties of the average UK commuter – in fact, it probably happened to many of you this morning – but when it happens in Switzerland, the land of clockwork efficiency, it’s quite a different matter.

Beat Erni in the Profit Hunter Files shows how last month’s complete breakdown of the state-owned SBB Swiss rail network, which accounts for 5% of Switzerland’s power consumption, highlights the problems that energy producers are having keeping up with growing global demand – and the opportunities the supply gap offers smart investors.

Published in | More articles by Heather D'Alton

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