Posted by: Mark Scott on November 11
Christmas is still more than six weeks away, but Coca-Cola wants to tap Londoners' holiday cheer. On Nov. 11, the U.S. drinks giant announced a deal to sponsor performers (or buskers, as they're called in Britain) on London's Underground. The agreement, which starts on Nov. 30 and runs until Jan. 4, 2010, includes Coke-emblazoned logos across the British capital's public transport system, and will be tied in to the company's Christmas-related advertizing campaign.
So far, so good. But there's a problem. Coke also wants singers to perform its theme tune 'Holidays Are Coming' and other Christmas carols as part of the viral ad campaign. Unfortunately, many of the 240-plus buskers -- who range from classical singers to rap artists -- have balked at flogging Coke's message. (Transport for London, which manages the Underground, says no one will have to perform a song or jingle if they don't want to).
According to the London Evening Standard, Michael Ball, a 47-year-old jazz guitarist, said:
"Not in a million years will I play some Coke jingle. Most buskers make half their annual income in December. Londoners are really up for it and generous at this time and we know what songs and music work. Do commuters really want to hear a corporate jingle from every busker? What a daft idea."
So will the campaign backfire? Probably not. Whether performers pump out 'Holidays Are Coming' won't matter that much after Coke secured the sought-after ad space on the Underground (used by millions of commuters each day). Still, it just goes to show that this time, Coke can't teach the world (of buskers) to sing.
Posted by: Mark Scott on November 09
After months of planning, Kraft finally made its move on Nov. 9 for British candy maker Cadbury. Unfortunately for the Northfield (Ill)-based food giant, Cadbury reply was short and sweet: 'Thanks, but no thanks.'
The British firm's rejection of Kraft's hostile takeover isn't surprising. Under the proposal, the U.S. company is offering a cash-and-stock offer that values Cadbury at $16.5 billion. That's considerably less than most Cadbury shareholders had wanted, and mirrors the terms first offered to the company in late August. Since then, though, Cadbury's share price has jumped more than 30%, while Kraft's stock has fallen roughly 5%. No wonder, then, that Kraft's bid was quickly turned down.
So what next? Under Britain's so-called 'Put Up or Shut Up' rule, Kraft now has 28 days to convince Cadbury shareholders of the deal's value. Shareholders will then have an additional 60 days to make up their minds. Yet if market conditions don't change remarkably, Kraft will either have to walk away or increase its offer, particularly the cash component.
Unfortunately, its already-hefty debt burden makes any large-scale cash injection hard to justify. And convincing shareholders to take a less-than enticing offer will certainly be a tough sell. For Kraft, the questions now are: how much do we really want Cadbury? And how much are we willing to spend?
Posted by: Carol Matlack on November 05
Financial products based on 8th-century religious laws may seem an unlikely haven during a global crisis. But Islamic banking and financial services, based on traditional Muslim laws known as Sharia, are enjoying a major resurgence.
A survey released on Nov. 5 by The Banker magazine found that assets held by Sharia-compliant banks rose 28.6% in 2009 to $822 billion, while assets held by conventional banks grew only 6.8%.
True, Islamic finance still accounts for only about 1% of the global financial-services market, according to the Organization for Economic Cooperation and Development. But Sharia’s strict rules against speculation, hedging, and off-balance-sheet holdings are attracting investors worldwide. Already, some 50% of clients of Islamic financial institutions are non-Muslim, Anthony O’Sullivan, head of private-sector development at the OECD, said at a Nov. 4 conference in Paris on Islamic financing.
Continue reading "Islamic Finance: Lower Risk, But at What Cost?"
Posted by: Mark Scott on November 05
What's going on with Formula One? Only a day after Toyota pulled out of the world's most lucrative motor sport, French auto giant Renault is also thinking about pulling the plug. According to media reports, the company's board met on Nov. 4 to discuss the F1 team's future. No decision has yet been announced, but the future doesn't look too rosy.
Just look at Renault's financial position. It posted a $4 billion loss in the first-half of the year, with global revenues falling almost 24% to $23.7 billion. That came after the French auto giant reportedly forked out $394 million last season on its Formula One team, according to Formula Money, which tracks the sport's finances.
Faced with such losses, it's easy to see why Renault may balk at paying multi-million dollar sums for a place at motor sport's top table. A high-profile scandal involving Flavio Briatore, Renault's former F1 chief, who ordered one of the team’s drivers to crash on purpose also hasn't helped.
Continue reading "Renault Latest to Question Formula One Investment"
Posted by: Jack Ewing on November 04
Angela Merkel’s speech to the U.S. Congress Nov. 3 provided the German Chancellor with a nice distraction from the drudgery of forming a new government in Berlin. Back in Germany, though, business people are still trying to figure out what they can expect now that Merkel enjoys a majority in the Bundestag with her favored coalition partner, the pro-business Free Democrats (FDP).
On paper, Merkel’s Christian Democrats, the FDP and the Bavarian Christian Social Union have agreed to an ambitious program following their election victory Sept. 27. At the center are bigger-than-expected tax cuts for businesses and individuals. But UBS Economist Martin Lueck doubts whether Merkel will deliver fully on the tax cuts considering that the nation’s debt is already soaring because of stimulus spending. “The tax cuts are far from carved in stone,” Luecke says in a note to investors.
The new government is also unlikely to tamper with laws that make it hard to dismiss workers. Business has long pined for more flexibility to hire and fire employees, but weaker job protections are highly unpopular even among conservative voters. Merkel has made it clear she doesn’t plan to go there.
Continue reading "Business Expects Cautious Reforms From Merkel"
