Activism anxiety will grip French establishment 12 Dec 2018 Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.
“Pere Noel” Macron won’t cheer marchers or markets 11 Dec 2018 France’s president pivoted from Teutonic austerity to Matteo Salvini-ish populism in response to violent protests over inequality. He pledged state cash to help the underpaid and pensioners. That may push up French borrowing costs without pleasing those in yellow vests.
Telecom Italia stuck in activist feedback loop 11 Dec 2018 Top investor Vivendi wants to overhaul the Italian telco’s board months after a coup by rival Elliott. Regaining control looks hard and Elliott would remain a thorn in the French group’s side. Unless the two find common ground, a governance discount will weight on TIM shares.
Albert Frere’s heirs can eliminate market discount 5 Dec 2018 The death of Belgium’s richest man casts a spotlight on GBL, the 13 bln euro group he co-founded. Despite past canny investments, it’s valued at a hefty discount to stakes in companies like Adidas and Pernod Ricard. Selling assets and beefing up private deals could change that.
Cox: Why I’m relocating to Paris in the year ahead 4 Dec 2018 Riots on the Champs-Elysées are not the best advertisement for President Emmanuel Macron’s fight against illiberalism at home and abroad. But homegrown protests like those of the “gilets jaunes” come with the territory in the global centre of the resistance – my new home.
French riots present Macron with stiffer test 3 Dec 2018 Previous presidents faced protests like the “yellow vests” who rampaged through Paris. As before, the supposed cause - fuel taxes - masks other grievances. But Emmanuel Macron lacks heavyweight ministers or credible opponents. That makes him a lightning rod for public discontent.
Allianz’s 2021 vision opens door to big M&A 30 Nov 2018 The German insurer promised more of the same with a set of modest goals for the next three years. Yet CEO Oliver Baete’s tweaked capital target suggests he is leaving room for a hefty deal. Rival AXA’s derided purchase of reinsurer XL, however, should serve as a cautionary tale.
Altice wins most from $2 bln fibre sale 30 Nov 2018 Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.
Viewsroom: Climate risk is investing opportunity 29 Nov 2018 Experts reckon unrestrained global warming will lop 10 pct off U.S. GDP by 2100. California’s wildfires prove it’s already having disastrous effects. But investors and companies alike can be part of the solution. Plus, Carlos Ghosn’s arrest leaves three carmakers in disarray.
How Nissan could get the upper hand with Renault 23 Nov 2018 After ousting Chairman Carlos Ghosn, the Japanese carmaker wants more say in an unequal alliance. Given the partnership’s lopsided governance, Nissan’s best bet would be to snap up shares in Renault, neutralising its controlling stake. Ghosn’s exit makes a hostile raid easier.
French telco fight will become ménage à trois 22 Nov 2018 Three tycoons and state-backed Orange are bleeding each other dry in a mobile price war that shareholders despise and consumers love. Something must give in 2019. A deal of some kind between Iliad and Bouygues makes sense, if billionaire owners can set aside their egos.
Ghosn cloud has thin silver lining for Japan Inc 22 Nov 2018 A whistleblower triggered the ouster of the Nissan chairman, the company says. Emboldened workers are a small but significant sign of progress, given wider resistance to better governance. Investors are louder too. Bringing more corporate woes to light is one path to improvement.
France can best help Renault by cutting it free 21 Nov 2018 Finance Minister Bruno Le Maire wants to consolidate the carmaker’s alliance with Nissan, which risks fraying after boss Carlos Ghosn was arrested in Japan. Selling the state’s 15 pct stake in the company is politically hard but would remove a big hurdle to a much-needed merger.
SocGen U.S. settlement has sting in the tail 20 Nov 2018 The French lender will pay $1.4 billion to U.S. authorities for sanctions violations. The hit is in line with its expectations, but a deferred-prosecution pact will push up compliance costs. That puts more pressure on boss Frederic Oudea to cut the bank’s bloated cost base.
Renault is biggest loser in Carlos Ghosn debacle 19 Nov 2018 The French carmaker’s CEO is being ousted as chair of alliance partner Nissan. Were cross-shareholdings unwound, Renault might enjoy a valuation boost. What is more likely before then is that a lopsided partnership will be recalibrated to the disadvantage of the Gallic company.
Renault-Nissan pays price for Ghosn key-man risk 19 Nov 2018 Both carmakers’ shares tanked after Nissan said its chairman had understated his income and might leave. With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership. That’s a big problem if he’s no longer there.
Euro budget is a withered carrot for fiscal rebels 19 Nov 2018 France and Germany want to set up a pot of money to fund investment in the euro zone. The fund will only be available to those who comply with EU fiscal rules. The idea is a nice one but there may be too little money and too much complexity for the incentive to be effective.
Richemont’s Alibaba tie-up can’t come soon enough 9 Nov 2018 The luxury watchmaker’s sales growth is lower than where it was, and where rivals are. An obvious way to expand is to hike online sales. Teaming up with the Chinese digital giant would give Richemont a greater chance of parity with European luxury peers.
Stability can help SocGen escape its value trap 8 Nov 2018 The French bank’s earnings jumped 19 percent in the third quarter, lifting its return on tangible equity to a respectable 11 percent. If boss Frederic Oudea can finally settle with U.S. regulators and minimise trading mistakes, the lender should shrug off its discount valuation.
Credit Agricole can shrug off its unwieldy discount 7 Nov 2018 The French financial conglomerate earned a 13 pct return on tangible equity so far this year. Its wide array of businesses has long weighed on its valuation. But if asset management and retail banking units can keep performing, the shares trading at around book value look cheap.