Was Andersen's Fall Really Necessary?

By Heather D'Alton Dec 14, 2005

*** Unrequited Emap

*** Blue chip index above 5,000 once again

*** Euronext chief treads carefully...bullish Americans should beware...growth in the eurozone?...and more...             

-------------------   – Scottish Radio Holdings (SRH) – owner of Radio Clyde – saw its shares shoot up 15% after Emap made a play for the group. Zoo magazine parent Emap, which already owns some 30% in SRH, bid £10.40 per share for the remainder of the group's shares.

– SRH's reply to Emap? Not interested. But is the Scottish Group pushing its luck? Emap seems to think so: SRH's shares have not traded near the offer price of £10.40 for the past four years, Emap said. Even after bid speculation boosted the share price, the stock still traded at just £10. And 'we reserve the right to offer less than our current cash offer per share if we so wish,' Emap bristled. Its shares traded 0.3% down at 802p.

– SRH's surge helped lift the mid-cap index on Wednesday: the FTSE 250 added 0.5% to trade at 7,148. The FTSE 100 closed 47 points up, or 1% – to break the 5,000-level for the first time since early March. The index traded at 5,011.

– Academics publisher T&F Informa confessed it plans to buy privately-owned US events organiser IIR Holdings for £770m in cash. Yet while shareholders thought the deal was cheap, pushing the group's share price up 6% yesterday, the analysts disagreed.

– 'The business will provide instant critical mass for T&F in the US,' Bridgewell Securities' Patrick Yau said yesterday. 'The group's strategy is clearly to balance its exposure to cyclical markets with those that provide solid recurring revenue streams.'

– Euronext chief executive Jean-François Théodore, whose group is currently bidding for the London Stock Exchange, did his best to ensure he doesn't go the same way as his Deutsche Boerse counterpart, Werner Seifert.

– Théodore tried to soothe his shareholders by confirming that they would be able to vote at an extraordinary general meeting should any further move be made for the LSE. This follows a shareholder revolt that sent Deutsche's CEO packing after he refused to let his investors vote on the group's LSE offer. Euronext is currently waiting to receive the thumbs up from the UK Competition Commission as to whether it may proceed with its bid. The decision is due in September. LSE shares closed flat at 480p.

– And across the pond, the decision by the Supreme Court to overturn former accounting giant Andersen's criminal conviction has had a number of repercussions: not least for the US government. Andersen, who perished following its involvement in the Enron scandal, has now largely been cleared after it destroyed documents that may have implicated either itself or Enron in the accounting fraud. But should the firm have been demolished in the first place?         

-------------------    – It appears the American bulls are out in force: the cheerful picture painted by a Fed Governor recently suggested the economy is performing well, says Dr Kurt Richebächer in the Daily Reckoning. But this is exactly what the Federal Reserve said some five years ago...in early 2000...shortly before the country was knocked by a recession. Back then they had 'no inkling of the rapidly spreading weakness' in the economy. And it seems they may be missing the vital indicators once again...

– It's not hard to conclude that the economic recovery in the eurozone surely 'can't get much worse', says Steven Andrew of F&C Asset Management. Yet lead indicators have once again shown that that's not the case: sentiment towards growth prospects for the region have plunged while the euro has also struggled recently. Yet as Euroland treads water, there are a number of reasons to believe that there's some growth to come yet.

– For all the bad press that hedge funds have received for their outrageous growth over the past couple of years, these funds are merely mirroring the growth we saw in mutual funds during the 1990s, says MoneyWeek's Tim Price. Remember, back then, mutual funds had garnered assets of $1trn, and today they are 8 times that size. So if you call the hedge fund market place 'crowded', you'll have to come up with a whole new adjective for the mutual funds just listed on the New York Exchange...of which there are more than stocks...

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