something to smile about? - Euromoney Institutional Investor PLC

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Glasgow School of Art: part ofGlasgow’s cultural heritage“There is a ready supply of skilledtertiary-sector labour at extremelycompetitive levels,” says David Thorburn,COO at Clydesdale Bank, part ofthe National Australia Group. “This isone of the reasons why the bulk of ourUK treasury service centre operationsare now based in Glasgow.” DavidSmith, director of EMEA for theScottish Development International,an investment agency, agrees: “Much ofGlasgow’s growth and success can bedirectly attributed to a flexible, stableand motivated workforce with highlydeveloped skills for the treasury sharedservice centre.” That Glasgow-basedcorporates will pay 32% less in wagesthan London-based companies shouldalso be factored in.Glasgow’s financial districtThe International Financial ServicesDistrict (IFSD) is taking shape fast. MorganStanley, JPMorgan, esure andGoldfish have already moved in bringingwith them over 1900 new financesector jobs. It has been designed as a preequippedbusiness area to allow fasttrack occupancy. There is no waitingaround. If you decide that Glasgowoffers everything you need from a treasuryservice centre, you can pretty muchmove in tomorrow – subject to givingnotice to your current provider.The district is actively supported byScottish Enterprise Glasgow, and, whencompleted, will comprise over 20 millionsquare feet of office space. It willalso push Glasgow in to the top threecities in Europe for office availabilityand fifth for office value for money.GREATER GLASGOW & CLYDE VALLEY TOURIST BOARD“There is a ready supply ofskilled tertiary-sectorlabour at extremelycompetitive levels. This isone of the reasons why thebulk of our UK treasuryservice centre operationsare now based inGlasgow.“ David Thorburn,Clydesdale Bank“The treasury shared service centreis already a major employer in Glasgow.We now seek to build on thesestrengths by creating the highest qualitybusiness environment forcorporates. The competitiveness ofGlasgow in the market is compoundedby a cost base which is up to 40% lowerthan many of its main competitors,”says Ron Culley, chief executive of ScottishEnterprise Glasgow.World-class infrastructureWith the largest number of ISDN linesper capita in the UK and an extensivetelecommunications infrastructure it isno surprise to find Glasgow home to BTScotland, NTL and Thus. BT has evendesignated Glasgow as an eLocation,and is investing £50 million in its telecominfrastructure.New buildings in the IFSD have dualrouting – put simply, if there’s a problemwith one exchange, business isrerouted through the other with corporatesnone the wiser. “Our technicalpeople say the telecoms infrastructurein Glasgow remains better than almostanywhere in the UK,” says Eaton’sWard. But the excellent infrastructureprovisions don’t end at the phone lines.The IFSD offers excellent transportationlinks too.Glasgow offers the largest suburbancommuter rail network in the UK outsideLondon, and boasts two majorairports – Glasgow and Prestwick. “TheEaton Corporation is an $8 billionglobal business. Therefore, we have anumber of international clients. It isextremely important for us that ourEuropean and stateside clients andpersonnel are able to access Glasgoweasily and affordably,” says Ward, whocites Glasgow’s transport infrastructureas a compelling reason why EatonCorporation chose Glasgow. With theonset of the no-frills airlines such asEasyjet and Ryanair servicing the city,flights have become even cheaper andmore frequent.So would Ward recommend Glasgowto other corporates both as a placeto work and, perhaps moreimportantly, as a place to live? “The cityis flourishing. It’s a vibrant, bustlingplace to live. It’s got something foreveryone – lots of free museums, galleries,pubs and clubs, plus two majorfootball teams.” For those who perhapsdon’t follow Scottish football they areCeltic and Rangers. cfSHARED SERVICECENTRE OROUTSOURCING?Corporates can outsource back-officeoperations or create a shared servicecentre – the degree of control is thedefining factor. But which is best for you?“There is an increasing willingness tooutsource – a feeling that a shared servicecentre can take you to a certain point butno further,” comments Alex Hamilton, atLatham & Watkins. He has identified fourpressure points for corporates:»a desire to improve reporting and riskcontrol in treasury»cost pressures on the back office»increased requirements for treasurywhich is, in turn, struggling to growinternally»pressure to invest in new technologyThe question is a simple one. Can acorporate outsource its back-officetreasury operations and then repurchasethem at a lower price than it would haveotherwise cost? “Companies have to createa comfort zone. There has to be awillingness to allow providers to do certaintasks.” Though Hamilton admits there isan obvious corporate concern about a lossof control, it is largely a question ofswapping one type of control for another.corporatefinancemag.com March 2004 cf 41
DEALANALYSISChampagne anyone?Bumper figures forM&A growth in 2004Any doubts surrounding the health ofthe global M&A market have beenresoundingly dispelled by the latestbatch of deal information fromDealogic. The announced volume ofM&A deals so far in 2004 has reached$471 billion – this represents awhopping increase of 170.9% oncorresponding 2003 figures. Given thenumber of announced deals – 3,274 and3,566 for 2004 and 2003 respectively –it seems that sheer deal size is responsiblefor the uplift.Goldman Sachs again leads the wayin the US M&A standings, consolidatingits position at the head of the packagainst rivals JPMorgan and MorganTOP 10 GLOBALM&ADEALS FEBRUARY 2004Stanley. And even though Goldmanactually advised on three fewer dealsfor year-to-date 2004 compared to 2003,total deal volume shows an increase of637.17%.In the US, energy and computerindustries led the way in the last weekof February with the decision by TransCanadato acquire Gas TransmissionNorthwest from National Energy & GasTransmission for $1.7 billion and FirstData acquiring Concord for $7.1 billion.And while America is traditionallythe most vibrant M&A market it isacross the Pacific in the islands of Japanthat has seen the most exciting M&Anews for some time. Yamanouchi Pharmaceuticalannounced its intention topurchase Fujisawa, its smaller Japaneserival, for around $8 billion. The deal –to be completed in April 2005 – willcreate Japan’s second largest pharmaceuticalcompany and may heraldfurther M&A speculation in Japan’s otherwisequiet M&A sphere.But it’s not positive news everywhere.PwC’s report ‘Power Deals’shows 2003 as something of a nadir forthe global electricity and gas markets;deal volume fell sharply from $84.9 billionin 2002 to $43 billion in 2003. Thegas market, in particular, is suffering asdeal values slumped from $36.3 billionin 2002 to a pitiful $3.3 billion in 2003.Announced Target Target Target Acquiror All Advisors Value $(m)Nationality Sector11/2/04 Walt Disney Co US Leisure & Comcast Corp Goldman Sachs, Bear Stearns, 66,603.98RecreationJP Morgan, Morgan Stanley,Quadrangle, Rohatyn17/2/04 AT&T Wireless Services Inc US Telecomms Cingular Wireless Goldman Sachs, Merrill Lynch, 46,770.00Lehman Bros, Evercore Ptnrs,Citigroup, JP Morgan, Rohatyn5/2/04 Canary Wharf Group plc (Bid No 2) UK Real Estate/ CWG Acquisition Cazenove, Deutsche Bank, 9,699.57Property Ltd (IBO) Merrill Lynch, Lazard24/2/04 Fujisawa Pharmaceutical Co Ltd Japan Healthcare Yamanouchi Pharma- Lehman Brothers, Morgan Stanley 7,880.77ceutical Co Ltd16/2/04 GreenPoint Financial Corp US Finance North Fork Bancorp Keefe Bruyette & Woods, Lehman Brothers, 5,671.65Sandler O'Neill & Partners, JP Morgan23/2/04 Wanadoo SA (29.4%) France Computers & France Telecom SA ABN AMRO, BNP Paribas, Societe Generale, 4,841.15ElectronicsMorgan Stanley2/2/04 Grupo Financiero BBVA Mexico Finance Banco Bilbao Vizcaya Goldman Sachs, Morgan Stanley 4,076.90Bancomer SA de CV (40.58%)Argentaria SA - BBVA9/2/04 NetScreen Technologies Inc US Computers & Juniper Networks Inc Goldman Sachs, JP Morgan 3,504.29Electronics19/2/04 Carlsberg Breweries A/S (40%) Denmark Food & Carlsberg A/S Goldman Sachs, Lehman Brothers, JP Morgan 3,279.02Beverage16/2/04 Industriforvaltnings AB Kinnevik Sweden Finance Invik & Co AB Handelsbanken, Deloitte & Touche, 2,838.64Morgan StanleySource: Dealogic44 cf March 2004 corporatefinancemag.com
Page 1 and 2: The magazine forthe internationalfi
Page 3 and 4: CONTENTSMARCH 200422 Lead storyThe
Page 6 and 7: conducted an internalinvestigation
Page 8 and 9: €6.4 billion or 40%. S&Ppoints ou
Page 11 and 12: Global consolidationefforts set to
Page 13 and 14: Follow-ons by Indian Issuers 01/01/
Page 15 and 16: Crudele strikes a chordwith Gibson
Page 17 and 18: ProxyMed recruitshealthcare veteran
Page 19 and 20: It is fair to say that France Telec
Page 21 and 22: TREASURER’SVIEWGetting to grips w
Page 23 and 24: Top 25 Japan (by market value)Compa
Page 25 and 26: Top 25 US (by market value)Company
Page 27 and 28: offered a cash dividend of €4.7 a
Page 29 and 30: MANAGING RISKFX FORECASTER OF THE Y
Page 32 and 33: What acorporateneedsThe modern corp
Page 34 and 35: Norbert Mayer, BMW: “Commercialpa
Page 36 and 37: Weatherfordchooses loanflexibility
Page 38 and 39: JT InternationalJT Internationalann
Page 42 and 43: EMEA ECM SECTORSPREADS ‘03 & ‘0
Page 44 and 45: FXFORECASTS10-year benchmark long-b

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