The flow of desperate people to Europe has a financial-world parallel. For companies, high returns attract new entrants who threaten incumbents’ comfortable state. The options for EU leaders are similar too: shut out competition, or find new, better ways to create profit.
Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.
Given that no party is likely to emerge from next month’s vote with a majority, it may be hard to form a strong government that can implement the country’s new bailout deal. There’s even a risk that there will be yet more elections. That could tip Greece back into crisis.
For oil majors desperate to protect their dividend, selling non-core infrastructure not linked to oil prices is a no-brainer. There is plenty of interest from investors, as Total’s pipeline sale in the North Sea shows. That should help overcome thorny deal issues.
The UK private equity fund is merging its Park Resorts caravan business with Parkdean, a rival. The terms suggest it has more than doubled its money in around three years. That will help Electra if Sherborne, its uppity 29 percent shareholder, raises new complaints.
The Spanish department store has ousted a dissident family shareholder after it objected to the 1 bln euro stake sale to a Qatari Sheikh. That seems draconian, even if the terms of the deal lately look better for the Sheikh. It reflects the big challenges facing the company.
Despite quadrupling sales in 10 years, the French group has kept supply below demand better than listed rivals. An operating profit margin of almost 33 percent has helped it dismiss sector woes with a Gallic shrug. The 50 percent premium to peers looks steep but justified.