BNP Paribas earns benefit of capital doubt 31 Oct 2017 A drop in trading profit failed to do much damage at the French bank, which reported an impressive 11.6 pct return on tangible equity in the third quarter. Beating its own return targets, even though they’re modest, should help dispel perennial questions over BNP’s capital level.
Banks draw short straw from ECB 26 Oct 2017 The central bank will trim its monthly bond purchases but promised to keep buying for longer. That balances the demands of those who oppose money printing with the wishes of rate-setters who fear growth is still fragile. The losers are banks, whose negative rate pain will endure.
Time for Kering to hang up its boots at Puma 24 Oct 2017 The sneaker maker has been a poor investment for the fashion group and sullies its luxury image. Puma’s recovery could let Kering get out without a loss, even if finding buyers looks tricky. Spinning off the 5 billion-euro unit would be easier, and leave less cash to squander.
To restructure European banks, break the M&A taboo 23 Oct 2017 Cross-border deals are back on the agenda in Europe, while an activist is agitating to break up Credit Suisse. Investment bank mergers have a terrible track record. But combining Europe’s struggling wholesale lenders is the only way to boost scale and improve returns.
Publicis pick-up the exception to ad land gloom 19 Oct 2017 The French group reported higher revenue, defying rivals WPP and Havas which binned growth targets this summer. That’s cold comfort for advertising bulls. Publicis seems to be taking a bigger share of a still-challenged market. Past underperformance makes it a poor barometer.
Danone’s chair-CEO blend leaves sour taste 18 Oct 2017 Boss Emmanuel Faber is taking on both roles three years after the yoghurt maker split them. Yet shareholders are increasingly unhappy with such poor corporate governance at French companies. And with an activist to contend with, the board’s decision looks complacent.
Spanish toll-road bid steamrollers Benettons 18 Oct 2017 ACS has made a 17 billion euro offer for infrastructure operator Abertis, using the balance sheet of its German unit Hochtief. The price is better than a rival bid from Atlantia, controlled by Italy’s Benetton family. It owes more to cheap debt than economic sense.
Vivendi can live with Italy’s “golden power” move 17 Oct 2017 Premier Paolo Gentiloni wants Telecom Italia to install state-backed directors and a special appointee to handle security matters. It’s a headache for top shareholder Vivendi. But government sentinels are preferable to being forced to spin off assets or accept state investment.
Danone has to work to milk turnaround tale 17 Oct 2017 Strong third-quarter sales lifted the French yogurt maker’s shares to record highs. Rebounding Chinese demand will help make the most of a strong portfolio of brands. But cost cuts and making a success of its WhiteWave acquisition are key ingredients for an even richer valuation.
ACS faces bumpy road to join Abertis battle 13 Oct 2017 The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.
EU bank plan exposes mutualisation mirage 11 Oct 2017 The euro zone is pushing a joint deposit insurance scheme to complete its banking union. But the revised backstop might only kick in if national banking systems pass an invasive health check. It’s a reminder of how far European countries are from underwriting each others’ debts.
Vivendi needs to swallow bitter pill in Italy 9 Oct 2017 The French conglomerate is in talks with Silvio Berlusconi’s Mediaset, after falling out over a deal to buy the mogul’s pay-TV unit. Vivendi may not get a good price, but attacks by regulators and Berlusconi’s rising political clout could make a protracted dispute more painful.
Mantra should have reservations over Accor bid 9 Oct 2017 Accor has offered $917 mln for the Australian hotel group. The French suitor’s bid looks cheap set against previous deals in the sector, and given the financial benefits Accor could reap. Mantra’s board could afford to ask for a bit more before handing over the keys.
Catalan banks fairly punished for wrong reason 4 Oct 2017 The prospect of Catalan independence has hit Barcelona-based lenders CaixaBank and Sabadell. A schism from Spain and the EU could trigger deposit runs and losses, but the risk of that is low. Stagnant interest rates and weak profitability are a bigger threat than self-rule.
Europe faces bigger tax foe than Amazon and Apple 4 Oct 2017 The bloc’s antitrust chief ordered Luxembourg to collect 250 mln euros from the e-commerce giant. She is also pursuing Ireland over a 13 bln euro Apple case. The EU is winning the loophole battle. But a bigger war to level the global tax playing field may meet U.S. intransigence.
Telco banks may be consigned to fringes of finance 4 Oct 2017 Orange and Altice plan to offer banking services to capitalise on a boom in digital finance. It’s a novel solution to slowing telecom revenue growth, and similar ventures were a hit in Africa. But mobile operators are entering a crowded field, with no obvious advantage.
Nestlé can pre-empt Dan Loeb with refreshed board 3 Oct 2017 The Kit Kat maker’s directors are light on consumer and digital expertise. Half of them are Swiss, a market worth just 2 percent of sales. Nestlé’s latest revamp plans are far from radical, and the activist may next seek boardroom changes. The company could beat him to it.
Central bankers’ superpowers are looking spent 2 Oct 2017 Between taming inflation, fighting the financial crisis and averting a breakup of the euro, monetary policymakers acquired an aura of omnipotence. Their responsibilities are growing and their mandates have turned into a fetish. A painful collision with reality is overdue.
Telecom Italia CEO’s job: fix governance discount 29 Sep 2017 The telco named Amos Genish its new boss. The Israeli’s to-do list includes mending relations with the Italian government and clarifying those with shareholder Vivendi – as well as fighting fresh competition. Unless he addresses these problems, TI’s lowly valuation will endure.
Amazon European shopping talk is wishful thinking 28 Sep 2017 Supermarkets Carrefour and Sainsbury have been floated as potential targets following the e-commerce giant’s $13.7 bln purchase of Whole Foods. But CEO Jeff Bezos already owns the one grocer he really needs. Bid speculation only obscures the broader competitive pressures.