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City Republic: Qataris are back, this time for Cadbury

LONDON - The Qatari Investment Authority, which failed recently in its bid for Sainsbury's, is now stalking Cadbury.

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The QIA has teamed up with US investor Nelson Peltz, a sort of one man hedge fund, to form a vehicle called Trian.

Peltz already had 3% of Cadbury and Trian has raised the stake to 5%.

In the summer, Cadbury called off the sale of its North American drinks business to private equity because of the credit crunch (which should ring a bell with the QIA).

Peltz, who owns America's most valuable house in Miami Beach (up for sale at $75m if you're interested) has a history of moving in and out of FMCG companies, having done battle with Heinz and Kraft in the past.

The involvement of the QIA may mean he has something more permanent in mind this time.

A high wire act for markets

One commentator this past weekend compared operating in financial markets to walking across a (reasonably) wide bridge with a big drop beneath you.

So long as you don't look down, you're OK.

Some pundits are saying shares are going to drop 20% next year, other more rational folk point to the continuing high level of company earnings and the energy still surging into the world economy from the BRICs (Brazil, Russian, India and China, the nouveaux riches).

Some of us would point to the resurgence in US industry prompted by the weak dollar (which makes exports from the US more competitive). Which could be why US job numbers are still rising, as the latest figures showed on Friday.

The big problem is banks being reluctant to lend (to each other chiefly) while they wait to see who's going to take the next powder on sub-prime obligations.

But if banks don't lend they don't make any money.

So they'll be back.

Emap stops off at half-way house
Emap is selling its consumer mags and radio stations to German publisher H Bauer, subject to an imminent shareholders' meeting, but hanging on to the biz to biz side, allegedly the jewel in the crown.

But it won't be called Emap any longer, because Bauer has bought the name too.

Which means shareholders are left with executive chairman Alun Cathcart running an unnamed B2B company. Shareholders appeared none too impressed with this on Friday, when Emap's shares tumbled 10%.

The alternative, of course, is former managing director David Arculus' bid (he's said he can get the Emap share price up to £12 in three years, on Friday it closed at under £8).

The Arculus option still looks the most sensible to me, but he would presumably want the whole company, not just the B2B side.

Should be an interesting shareholders' meeting.

Dark days for the gnomes of Zurich
Time was when Swiss bankers would sit in their parlours, discreetly opening numbered accounts and counting their money.

Then came Big Bang in the 1980s and off they went to mix it with the players of Wall Street.

They've had good times, of course, but just at the moment one of the giants, UBS (the old Union Bank of Switzerland), is having anything but.

It has just announced another $10bn write-down on sub-prime on top of the $3.5bn in announced in October.

The upshot is that the bank will make a loss this year and has had to pull in extra capital in the form of $9.7bn from the Government of Singapore Investment Corporation.

The Oman government is also thought to be putting in a couple of billion.

Say what you like about sovereign investment funds but at least they've got some money.

Just a couple of weeks ago the Abu Dhabi Investment Authority bailed out Citigroup with $7.5bn, through a highly expensive (for Citigroup) bond issue.

Who's going to be next?

A Lib Dem 'solution' for Northern Rock?
Now there's turn-up.

But over the weekend lots of pundits were musing about the likelihood of administration for the troubled mortgage lender, presumably on the basis of some whispers from the Treasury.

Throughout the crisis acting Lib Dem leader "Vicious" Vince Cable (the man who compared PM Gordon Brown to Mr Bean) has been saying this is the only credible solution.

There are fears that neither Virgin nor Luqman Arnold's Olivant (the shareholders' preference) will be able to raise the £10bn-15bn the government wants paid off before Christmas.

On the basis, presumably, that banks will still lend to HMG, Cable wants it to take over.

Companies that go into administration often come out of it, of course. American airlines have been doing it for years.

Perhaps Vince can be installed as chairman.

Stephen Foster is a former news editor of Campaign, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog www.editco.net and Politics of the Media for Brand Republic.

 

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