KEY POINTS:
Vicki Salmon's departure from Restaurant Brands this week is a sign that the sale of the business is going very badly.
It is unlikely she would have gone had a sale been imminent. Her departure brings her career as a chief executive to a messy close and Restaurant
Brands will struggle to get a new CEO while the business is up for sale.
Chairman Ted van Arkel says the company is in talks with three potential buyers, one of them a "serious contender". But we've heard that before from Restaurant Brands.
It's easy to see why buyers aren't queuing up to get their hands on the fast-food franchise. First, there are the well-known problems with Pizza Hut. The pizza business is a tough one at the best of times and Pizza Hut has been squeezed by the likes of Hell Pizza and Australian entrant Domino's.
A new marketing campaign last year and store refurbishments haven't helped. Nor has the company's launch last year of gourmet pizzas turned it around.
Anyone buying Restaurant Brands would have to throw some serious money at Pizza Hut to resuscitate this tired old brand.
And while private equity buyers aren't averse to investing capital in businesses they buy, they have to see a return. The pizza business is low margin and has low barriers to entry - anyone with an oven and a bag of flour can start a pizzeria.
Private equity buyers prefer leading businesses with strong cashflows in sectors with high entry costs.
Second, there would have to be questions over the long-term viability of the company's profit engine, KFC. With obesity an increasingly important issue, attracting the attention of government, the sustainability of a business whose primary product is deep-fried chicken is far from certain. The chicken franchise rebranded globally a few years ago to KFC, but we all know what the F stands for.
Long-suffering Restaurant Brands shareholders grimly holding on for a windfall from the sale might be facing a long and disappointing wait.
Clipping The Kiwi's Wings
Alan Bollard this week admitted that when he sets interest rates, he has in the back of his mind the effect an increase might have on pushing up the New Zealand dollar.
Ironically, and in a roundabout sort of way, it might be this caution that has seen the currency remain so strong for so long.
"In recent years we have not wished to add to upward pressure on the New Zealand dollar," the Reserve Bank Governor told his audience at a speech in the Wellington Club on Thursday. "This has meant we have been more cautious in our OCR tightening path than might otherwise have been the case."
But earlier in the same speech, Bollard noted that house prices and the kiwi have a very strong correlation. When house prices rise, they push up inflation, which in turn pushes up interest rates, making the kiwi more attractive to foreign investors, forcing the currency to rise.
Reversing all that, Bollard said: "Accordingly, a sustained retracement in the NZ dollar from the highs seen in recent years could be contingent on our efforts to rein in domestic inflation pressures." In other words, only by slowing the economy - raising interest rates - will he get inflation sufficiently under control to start thinking about cutting interest rates.
Overseas investors need only a sniff of a rate cut to start selling the kiwi, as Bollard acknowledged when he said "the attractiveness of the NZ dollar for offshore investors is not just a reflection of the current level of interest rate differentials, but also investors' views regarding their sustainability".
Economists such as Deutsche Bank's Darren Gibbs have argued that the best way to see the kiwi fall this year would be to raise rates again to slow economic growth and facilitate a rate cut, whatever the short-term consequences for the currency.
Bollard seems to be coming round to that point of view too.
Three Into One
There was an intriguing suggestion this week that Telecom would appoint three chief executives, each to report direct to the board, rather than just the one to replace Theresa Gattung.
Company sources said the idea was nonsense and wasn't being considered, which is a pity, but not surprising.
While the idea might sound odd, it could help ensure a better-functioning broadband market.
As part of its crackdown on Telecom last year, the Government said it would force Telecom to split into three operating units - one to manage its network, one to wholesale Telecom services to other phone and internet companies, and the third to retail Telecom services.
While there will be some checks and balances to try to ensure that Telecom gives competitors fair and equal network access, there are questions over how effective this would be.
After all, there will still be the one chief executive overseeing all three divisions. Maximising profit by tipping the scales to favour Telecom's retail arm over its competitors might prove a little too tempting.
Having a chief executive for each individual unit might have helped ensure that the units operated more independently and weren't so inclined to do each other favours.
But with chief financial officer Marko Bogoievski at pains to tell investors how the Government's market reforms will slash the company's market share, Telecom was unlikely to endorse the three CEOs idea.
