Renault-Nissan love-in swerves main bumps in road 12 Mar 2019 The French carmaker has agreed its chairman will no longer chair its Japanese partner. That’s a step forward from the Carlos Ghosn era. But mutual talk of equality is no substitute for solving the alliance’s fundamental problems – not least its suboptimal cross-shareholdings.
TIM shareholders should reject Bolloré board slate 12 Mar 2019 The Vivendi boss wants to replace five directors of the Italian telco’s board with his own. They don’t deserve to win, and the French mogul is already well represented. But the infighting needs to end. After the vote, TIM needs to appoint a new chairman who can unite both fronts.
French banks’ pain may worsen 8 Mar 2019 The Bank of France may raise capital buffers to dampen loan expansion. That is justified given credit is growing much faster than the economy is expanding. But combined with pitiful lending margins, the move would add to the profitability problem which is plaguing Gallic banks.
LVMH-Pernod bid talk makes for watery cocktail 4 Mar 2019 Ever since activist Elliott showed up at Pernod, Paris has been awash in speculation that LVMH covets the $46 bln spirits group. Adding booze brands like Absolut to its portfolio would dilute LVMH’s luxury profile. Bernard Arnault’s public disavowal of a deal is believable.
Engie demystifies before activists come calling 28 Feb 2019 The French gas and power group is decluttering its complex structure by exiting 20 markets. Engie’s state ownership and Belgian nuclear albatross act as a brake on activism, but won’t always save it if its undervaluation lingers. Still, steps to close the gap with big wind and solar peers suggest a capacity for self-help.
Universal Music auction could end on bum note 28 Feb 2019 Buyout group KKR and China’s Tencent may bid for part of Vivendi’s label, Reuters reports. On paper it’s the best way to gain exposure to fast-growing streaming. That means getting emerging market fans to pay for music. Investing alongside Vincent Bolloré also brings risks.
John Malone wins most in Europe’s telco M&A whirl 28 Feb 2019 The cable cowboy’s Liberty Global is selling another business, this time to Swiss group Sunrise for $6.3 bln. As in Germany, Malone gets a premium for a sub-scale operation. The benefits for the buyer from bundling mobile, TV and internet services may be competed away.
Dutch activism could ground Air France recovery 27 Feb 2019 The Hague has snapped up 12 percent of the carrier to counter the influence of the French government and protect Dutch jobs. More state meddling may undermine new boss Ben Smith’s cost-cutting plan, and exacerbate tensions with French unions, raising the risk of more strikes.
Cruising Peugeot risks running out of gas 26 Feb 2019 The French group’s shares are the best-performing of European carmakers in the past year, helped by CEO Carlos Tavares’ swift turnaround of Opel-Vauxhall. Yet his new targets are modest, and a push into the tough U.S. market could flop. Peugeot’s premium valuation may not last.
Franco-German industry push sullies EU principles 21 Feb 2019 The two biggest euro zone countries want to limit the European Commission’s antitrust powers, and subsidise strategic sectors. Their fear of Chinese dominance is fair. Yet the reforms may help governments to prop up national champions, and undermine the bloc’s single market.
European telco giants are cheap for a reason 21 Feb 2019 Deutsche Telekom, Orange and Telefonica appear undervalued relative to the past five years given their rising sales, stable EBITDA margins and M&A options. But they look less of a bargain once hefty network investment needs and the possibility of low returns are taken into account.
If Chanel were a normal company, it’d be in play 19 Feb 2019 The Parisian fashion house’s designer for 36 years, Karl Lagerfeld, has now died at 85. Its co-owners, two brothers, are approaching retirement. LVMH boss Bernard Arnault has the firepower to make a $40 bln purchase. Bankers may be salivating, but a deal looks a long way off.
Danone’s self-help plan B gets more important 19 Feb 2019 The French dairy giant is inching towards its 2020 revenue growth target. But operating margins lag peers’ and it trades at a tangible discount. To face down future activism, CEO Emmanuel Faber should be compiling a list of further cuts or deals to buy faster-growing brands.
Italian grudge may steer Vivendi’s big M&A mandate 18 Feb 2019 Vincent Bolloré may be sore about JPMorgan’s work with activist Elliott in Italy. Yet the U.S. bank’s analysts lead the pack in valuing Universal, at a whopping $50 bln. As the media group chooses advisers to sell half of Taylor Swift’s music label, bygones may not be bygones.
Vincent Bolloré shores up Vivendi activist defence 15 Feb 2019 The French billionaire treats the media group like a family hedge fund. The latest instance is a new share buyback that allows the tycoon to boost his control without personally coughing up a penny. Any activist that wants to improve governance will have to move quickly.
Jumbo reality check frees Airbus to fly higher 14 Feb 2019 The European aerospace group will stop making A380s in 2021. Passengers who love the spacious cabins will regret the decision more than the airlines that fly the gas-guzzling behemoth. A focus on nimbler, greener two-engine jets will help narrow Airbus’ valuation gap with Boeing.
New Vivendi band member requires artistic vision 14 Feb 2019 Vincent Bolloré’s group may sell half of music label Universal. The returns are low at a mooted $40 bln price tag. That favours buyers with a strategic interest in controlling music rights over financial investors. Tencent, Apple and Liberty Media are the most likely auditionees.
EU risks picking wrong fight with foreign giants 13 Feb 2019 France and Germany want to help companies fend off Chinese and U.S. behemoths by merging. Yet Europe’s fragmented markets and limited state subsidies mean it will never win the size game. Better to double down on strict antitrust rules while blocking unfair foreign buyers.
Chancellor: A 300-year lesson in bubble inflation 13 Feb 2019 In December 1718, the newly nationalised Banque Royale became France’s first de facto central bank. Under Scotsman John Law, it proceeded to issue paper money in what was arguably the first instance of quantitative easing. Central bankers take note: it ended very badly.
Norwegian investors only winners in bourse battle 11 Feb 2019 Euronext has hiked its bid for Norway’s stock exchange to $785 million. The hefty premium may no longer cover expected cost savings, and does not guarantee a victory against rival bidder Nasdaq. Shareholders in the Oslo exchange are beneficiaries of the larger groups’ largesse.