Luxury slowdown dirties Hermes’ hems 10 Feb 2016 The maker of 10,000-euro handbags warned it may miss its sales target this year. Hermes has some of the best revenue growth of the large luxury labels, and a stock market rating to match. With rival LVMH strengthening and the sector’s high-end softening, its lead may narrow.
BNP Paribas merits shift up EU bank pecking order 5 Feb 2016 France’s largest bank’s 30 pct discount to tangible book value implies investor fears about its so-so capital and exposure to stricken oil groups. BNP Paribas’ top line in its three main arms still grew in the final quarter. It should be trading nearer the likes of ING.
It’s time bully Louis Vuitton was sent packing 4 Feb 2016 The French fashion house’s often dubious trademark lawsuits are pricey to fight, so most targets fold. That can squelch free speech and fair competition. One tiny handbag maker just beat LVMH and wants it to pay its attorneys. Legal hubris may finally become an expensive luxury.
Time for European bank weirdos to simplify 3 Feb 2016 Austria’s Raiffeisen Bank International would give its regional-banking parent a capital bump if the pair merged, its boss reckons. Streamlining the ownership of France’s Credit Agricole also would improve its balance sheet. Neither has made a good case for convoluted structures.
LVMH shows there is life after China 3 Feb 2016 Sales at the French luxury giant grew a smart 6 percent in 2015. Jewellery and perfume were standouts. The Dior owner’s shares have taken a sharp tumble since China stock market jitters roiled the sector in August. These results suggest the discount is overdone.
Vanguard is rearguard in Vivendi’s Italian coup 19 Jan 2016 French funds helped the media group win four board seats at Telecom Italia in December. Yet Vivendi also was backed by long-term holders, including Vanguard, newly released data shows. It suggests in this age of activism that even the most passive of voters can’t be taken for granted.
Credit Agricole’s tortuous saga takes hopeful turn 19 Jan 2016 The French group is mulling the sale of its stakes in over three dozen regional banks, echoing a similar 2013 disentanglement by Natixis. It wouldn’t end Credit Agricole’s cumbersome mutual structure. But greater simplicity, plus a potential cash payout, would be welcome.
Renault flash crash unmasks car confidence crisis 14 Jan 2016 Reports that the carmaker’s offices were searched by investigators knocked the shares. Renault says no signs of emissions-masking devices have been found. Unlike VW, it does not sell cars in the U.S. But it still shares a problem with its German rival: a lack of investor trust.
Matching Boeing margins is Airbus final frontier 12 Jan 2016 Fortunes are turning in the epic rivalry between the two airline manufacturers. Europe’s Airbus is winning more orders, has higher shareholder returns and trades at a 20 pct valuation premium. Closing the profitability gap with U.S. Boeing is its biggest remaining challenge.
French telcos’ next call: sweet-talking consumers 5 Jan 2016 Orange and Bouygues are eyeing a tie-up that would give the French telecoms operators half the market. The state’s 23 pct stake in Orange makes the deal more likely to succeed, unless the EU intervenes. The key may be convincing customers of the long-term benefits.
BNP concedes on capital with U.S. bank rethink 24 Dec 2015 France’s largest bank by assets may sell its Hawaiian arm to boost its lowly 10.7 pct common equity ratio. Nixing the dividend for a year would have about the same effect. But that would be a bigger indignity for BNP Paribas, a serial acquirer playing catch-up on capital.
French telco M&A could be triumph of the smallest 23 Dec 2015 Past attempts to reduce the number of mobile operators have failed. A mooted tie-up between Orange and Bouygues may fare better, though with tough remedies. The beneficiary could be market No. 4 Iliad, which may get the chance to pick up some cheap offcuts.
Short-seller attack on Casino ultimately healthy 18 Dec 2015 A withering critique of the French retailer’s book-keeping by a short-seller sent shares down by almost a fifth. Casino is riled. Muddy Waters’ approach raises ethical questions. But one way to see this conflict is as a beneficial kind of pessimism-tinged activism.
Bollore’s offensive on Telecom Italia looks clumsy 14 Dec 2015 The Vivendi chairman pulled support for Telecom Italia’s plan to convert non-voting shares into the regular kind. The move comes as his bid for TI board seats is struggling. If it works, he avoids dilution, but creates a messy conflict with the board and other shareholders.
New Renault-Nissan pact is only roadside repair 14 Dec 2015 France’s growing power at Renault is curbed, as is the French carmaker’s sway in Japan. It ends months of distraction for the auto alliance led by Carlos Ghosn. But the fiddly legal fixes only go so far. It would be better to see the duo drive towards a full merger.
Savoy and Plaza sale means trophies for all 9 Dec 2015 Accor is buying the owner of the luxury London and New York hotels for $2.9 bln from its Saudi and Qatari investors. Adding higher-end lodging may help the French group make its online booking system more competitive. The price, however, looks too high to create much value.
O2 deal may get hung up on UK telco concessions 9 Dec 2015 Brussels’ trustbusters are assessing the market impact of Hutchison’s 10 bln stg bid for Telefonica’s UK arm. It would be odd to push the bidder to surrender spectrum: rivals have more. A demand for it to create a new operator looks sounder but would hurt the deal logic.
Far-right poll success jeopardises French reforms 7 Dec 2015 Marine Le Pen’s National Front won more votes than mainstream rivals in the first round of regional elections. Anti-euro and anti-immigration, the party espouses protectionism and state intervention. Its rise may force the ruling Socialists to rethink economic reform plans.
Container shipping deal stacks up in multiple ways 7 Dec 2015 French giant CMA CGM is buying Singapore’s ailing Neptune Orient Lines for $2.4 billion plus debt. Offering majority owner Temasek and public shareholders close to book value – a 49 percent premium – looks generous. But the unlisted buyer can chart a course to value creation.
Air Liquide’s bid for Airgas leaves value vacuum 18 Nov 2015 The French gas company’s $13.4 billion acquisition melds two complementary businesses – the larger Air Liquide supplies mainly big customers; its U.S. rival serves smaller outfits. Yet unless the buyer can superheat the synergies, the deal will leave its shareholders worse off.