Good morning

The headlines:

  1. BP.

    Link: the takeover target.

    Whenever a company has been through a bit of a prolonged sad patch, Bloomberg finds a journalist to write a piece on how said company has become a takeover target.

    This week, it’s BP. After all – it sold off $50 billion worth of assets to save up for all the Deepwater Horizon legislation (including a number of its oil wells in the gulf). And now that the legislation story is winding to an end, experts are “making the case” for a viable carcass around which the vultures can gather.

    Is the stock price low enough?

    Possibly. The numbers are mostly theoretical and, in many important ways, irrelevant. I’m relatively sure that you could find someone somewhere that might want a piece of the BP pie at a reasonably negotiated price. And there is enough dirt out there that you could have quite a fun negotiation.

    The real questions are: will the British Government allow it to take place, and will someone have enough money to do it? The answer to the second question is “the money can always be found”. The answer to the first is: “did the British Government learn anything from the Cadbury takeover by Kraft?”

    And that second question is the heart.

  2. Hostess.

    Link: there’s something inappropriate about a “twinkie”. 

    The bankruptcy story is growing in accusation and intrigue. It turns out that senior management are trying to collect their incentive bonuses as part of the liquidation. Which has everyone up in arms, because how can you claim an incentive bonus when you let the company go bankrupt?

    A US trustee has filed for the bankruptcy decisions to be taken away from Hostess management, using reasons like “improperly seek[ing] to exculpate and indemnify [themselves] from past and future liabilities” and “cherry-pick[ing] which administrative claims get paid”.

    The judge is giving everyone a stern one-last-chance to sort themselves out privately. And then he’s going to do it publicly. Or let it be done publicly.

    “Bankruptcy makes you nasty”?

  3. Lonmin.

    Link: buy your shares today.

    Lonmin is going to sell $817 million worth of shares in order to prevent itself from breaking its debt covenants.


    That is not a good sign of enduring health. Especially when it’s accompanied by “and we’ll sack members of the board and management to make sure this doesn’t happen again”.

    Because the Marikana strikes were the result of bad management? I’m not saying that the management team and board don’t have problems – I’m just saying that making $698 million losses when two months of production gets suspended is not altogether unexpected…

  4. The IMF.

    Link: giving us new reserve currencies.

    The Australian dollar (the Aussie) and the Canadian dollar (the Loonie) are to be added to the list of IMF reserve currencies (currently: the Dollar, the Sterling, the Yen, the Swiss Franc, and the Euro).

    The loonie? How oddly appropriate.

  5. Greece.

    Link: the next tranche?

    The EU finance ministers are meeting today to discuss that next tranche of the bailout. Also: lowering the rates and extending the maturities on Greece’s institutionally-held debt.

  6. Soros.

    Link: buying gold.

    Here is the “12 year bullish streak” that everyone is talking about (at least, the 10 year version):

    Quantitative easing hedges.

  7. France.

    Link: we’re still talking about credit rating downgrades!

    France got downgraded by Moody’s. It’s almost non-news, really.

That’s all for now.

Have a good day.