French cable group suffers earnings power shortage 18 Jun 2018 Nexans lost almost a fifth of its value after saying EBITDA may fall 15 pct. The company’s racy growth plans rest on trends like offshore wind and soaring data use, but investors value it as a sector basket-case. Given the profit warning and a departing CEO, that looks fair.
Renault M&A race sidelines governance niceties 15 Jun 2018 Investors backed CEO Carlos Ghosn’s pay despite the French state’s opposition. His 7.4 million euro package was greased with soft targets. Yet the high proportion of shares at least gives Ghosn an extra incentive to push for a value-boosting merger with Japan’s Nissan.
Hermes loses niche status in fashion and finance 15 Jun 2018 The fashion group is joining rivals LVMH and Kering in France’s CAC 40 index. The Hermes family must get used to hoi polloi like ETFs and hedge funds crowding into its stock, and tougher disclosure norms. For companies, like luxury handbags, there’s a cost to going mainstream.
Casino sell-off is part of a bigger debt gamble 12 Jun 2018 The French supermarket is selling 1.5 bln euros of assets to pay down loans. Controlling shareholder Rallye relies on dividends to service its own heavy debts. The risk is Chairman and CEO Jean-Charles Naouri is running the grocer for financial needs higher up the food chain.
G7 risks becoming G-zero without consensus 7 Jun 2018 President Donald Trump is the sore thumb among leaders meeting in Canada on Friday. Last year’s G7 pledges were already watered down, and he hadn’t then left the global climate accord or started erecting trade barriers. The forum loses relevance if it lacks U.S. economic backing.
Air France check-in lacks logic for AccorHotels 4 Jun 2018 Buying the French government’s 450 mln euro stake in the ailing airline might help it get tough with unions. But the hotel group would not enjoy any strategic benefits. That AccorHotels is even considering the purchase shows the state’s continuing sway over the private sector.
Vivendi’s soccer loss may be winning tactic 30 May 2018 Chinese-owned Mediapro beat the media conglomerate’s pay-TV group Canal Plus in a 1.2 bln euro auction for rights to show France’s top matches. The winner is taking a gamble since the value of those rights leapt 60 percent. Vivendi avoided overpaying and can withstand the loss.
World Cup Soccernomics 29 May 2018 Who will lift soccer’s ultimate trophy in Russia this summer? Breakingviews ranked the 32 contenders according to player values, population, home support, and participation in the sport. Put them all together, and Germany is best placed to successfully defend its crown.
Numbers add up to Germany retaining World Cup 29 May 2018 Who will lift soccer’s ultimate trophy in Russia this summer? Breakingviews ranked the 32 contenders according to player values, population, home support, and participation in the sport. Put them all together, and Germany is best placed to successfully defend its crown.
Latest M&S overhaul lacks a clear price tag 23 May 2018 The UK retailer will close 100 stores in an attempt to reverse falling like-for-like food and clothing sales. The revamp, sped up by new Chairman Archie Norman, set the group back half a billion pounds last year. With few details about future costs, investors can shop elsewhere.
French telco M&A requires more than regulatory nod 22 May 2018 The sector’s supervisor has had a change of heart and is now open to dealmaking. Price wars and investments have bled operators dry. The weakest, Altice and Iliad, are the likeliest targets. But the former is too laden with debt and the latter may be cheaper in a year’s time.
Insurers risk retreading banks’ pre-crisis folly 22 May 2018 Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.
Vivendi music IPO rests on chart-topping valuation 17 May 2018 The French media group is deciding whether to float Universal Music. A $40 bln valuation suggested by CEO Arnaud de Puyfontaine could boost its shares by 40 pct. Yet a more realistic price tag would create little value, and give shareholders less reason to own Vivendi stock.
Italian radical agenda is a recipe for chaos 16 May 2018 A leaked plan by likely coalition allies 5-Star Movement and League says states should be able to exit the euro zone and cancel debt. That, along with a soaring budget and proposals for a shadow government, promise conflict with the EU. Bond markets are too complacent on Italy.
Europe’s payments crown does not come cheap 15 May 2018 Worldline is paying 2.3 bln euros for the credit card processing arm of Switzerland’s SIX. That will strengthen its position as Europe’s largest electronic payments group. But the French company had to pay a hefty multiple - and accept a humdrum return - to secure its dominance.
Saint-Gobain and Sika build happy truce 11 May 2018 A takeover battle dating back to 2014 is resolved. The French company ends up more than 600 mln euros better off after buying a stake of Sika and then selling a chunk back. Its former Swiss target pays a relatively low premium for freedom. Shame peace took so long to break out.
Liberty Global is a $25 bln bet on EU telecoms M&A 7 May 2018 The group chaired by “cable cowboy” John Malone may sell its German and eastern European businesses to Vodafone. If regulators give the thumbs up, Liberty’s remaining assets would be prime targets in a wave of telecom dealmaking. Its valuation does not reflect that possibility.
France’s M&A boom is about more than Macron 7 May 2018 French companies were involved in deals worth $226 billion in the year since President Emmanuel Macron was elected, a decade high. Though his policies helped business confidence, a global merger wave also helped. And state meddling is still a deterrent for overseas buyers.
Elliott wins partial victory at Telecom Italia 4 May 2018 The US activist succeeded in installing a majority of independent directors on the telco’s board, snatching control from investor Vivendi. Other shareholders will now be more fairly represented. But to keep CEO Amos Genish the directors will have to forget any strategy overhaul.
Air France-KLM staff chaos allows IAG to fly ahead 4 May 2018 The European airline warned that much of its 2018 operating profit will be wiped out by French strikes. Higher fuel charges and increased competition are creating headwinds for all carriers. But British Airways owner IAG’s success in slashing costs helps protect its bottom line.