The ECB chief’s bid to boost asset-backed security markets has produced few new deals, and its purchase programme is small. But the falling cost of issuance is tangible enough, and regulatory hurdles are lifting. Besides, politics preclude Mario Draghi from buying riskier assets.
Europe’s two biggest players in selling fancy clothes online are combining in an all-share deal worth about 3 bln euros. Both should gain, and size matters as Amazon eyes luxury. Yoox of Italy gets clear control and scale, while NAP owner Richemont keeps a toe in a growing sector.
The darkest scenario of British banks’ annual stress tests sees prices fall for over a year at home, and nearly four in the euro zone. Last year the ECB didn’t factor in deflation risk at all. The Bank of England is obviously freer to consider the possibility of its own failure.
The Swiss travel retailer will pay 3.6 bln euros with debt, or 13.8 times reported 2014 EBITDA, for Italian-listed World Duty Free. That’s bold as Dufry digests another big deal. Despite a big equity-raising backed by wealth funds, debt will hit a punchy 4.3 times EBITDA.
The Dutch group sold 80 pct of its lighting components unit for $2.8 bln. An Asian tech fund paid a surprisingly high 1.65 times last year’s sales. Buyout firms’ hunger for corporate cast-offs helped lift the price. A bigger test looms: splitting off the main lights business.
Even if Greece avoids imminent default, its prime minister will have to break with radical allies before Athens’ position in the euro zone is secure. It is not clear he has the courage to do so. But such a move would make far more sense than a break with euro creditors.
German unions are proving a key ally for Mario Draghi. Civil servants and chemical workers have followed metalworkers in securing pay rises significantly above inflation. Real wages will keep rising, fuelling a consumption-driven recovery and softening deflationary forces.