Market could push BNP to lift capital ratios 30 Apr 2015 France’s biggest bank outdid forecasts with a 17.5 pct rise in first-quarter net profit to 1.6 bln euros. Yet BNP Paribas failed to grow its capital ratios. French banks aren’t yet under regulatory pressure. But with peers stronger, investors may require higher levels.
Serial dealmaker makes smart truck stop in France 29 Apr 2015 Bradley Jacobs’ XPO is paying an undemanding 3.2 bln euros with debt for French trucking firm Norbert Dentressangle. The U.S. buyer’s timing is good: the euro is weak while France is increasingly open to deals. And the capital markets could hardly be better for M&A machines.
Capgemini reboots with big bet on North America 27 Apr 2015 The once-cautious French group is bidding $4 bln for private equity-backed IGATE. The friendly deal is at a pricey 22 times 2015 earnings. Still, the boldness could pay off. The IT services giant gets a faster-growing, higher-margin business, heft stateside, and tax benefits too.
French investment banking has less than meets eye 23 Apr 2015 Returns at BNP Paribas’ and Societe Generale’s trading and advisory businesses are better than peers. But the pair’s divisions carry less equity against gross assets than rivals. Before dashing in, investors should consider what the return would be with greater leverage restraint.
Hairy deals mean European animal spirits returning 15 Apr 2015 Shell-BG and Nokia-Alcatel are complicated, long-mooted deals finally coming to fruition. Exor’s move is just plain ballsy. American firms powered last year’s $3.5 trln global M&A bonanza. With Old World boards and bosses becoming more daring, Europe looks set to catch up.
Nokia engineers surprisingly clean Alcatel terms 15 Apr 2015 The Finnish group is set to buy its French rival for 15.6 bln euros. There are a few concessions to keep France happy but this is clearly a takeover not an unwieldy “merger”. Paying in stock keeps Nokia’s balance sheet healthy and synergies look decent - if rather distant.
Nokia will struggle to cut through Alcatel tangle 14 Apr 2015 An all-stock takeover by the Finnish company would create a roughly 40 bln euro telecoms equipment giant. Nokia investors are understandably sceptical. A deal would mean another big restructuring and stretch the buyer’s industrial expertise. The French connection adds complexity.
SocGen hints at end to bank commodities exodus 10 Apr 2015 The French bank is acquiring energy and metals trading positions from Jefferies. Higher capital charges and deleveraging have seen peers, apart from Citi and Goldman, shrink their activity. But clients still need to hedge exposures – and business may slowly be ticking up.
Bollore gets better of activists in Vivendi tussle 9 Apr 2015 Vincent Bollore has made peace with U.S. activists circling the media group he chairs. A vow to return 6.75 bln euros to shareholders is handy: Vivendi had been too vague about plans for its huge cash pile. But the French tycoon’s antagonists seem to have compromised more.
France becomes Renault activist – to stop activism 8 Apr 2015 The state is temporarily hiking its stake in the carmaker to prevent other investors opting out from a law to double government voting rights. The reform is meant to protect long-term investors. As it is, Paris is using activist-style techniques to safeguard its own interests.
Hermes shares look too glossy 25 Mar 2015 The French group weathered luxury market headwinds well in 2014 and will pay a 530 mln euro special dividend. Rivals Kering and LVMH were hit harder but are recovering. That makes the silk tie-maker’s luxury valuation of 32 times forward earnings more difficult to justify.
Accor CEO wins elbow room with investor selldown 25 Mar 2015 Backers Colony Capital and Eurazeo have sold 1.1 bln euros of shares in the French hotel group, halving their combined stake to 11.2 pct. That helps boss Sebastien Bazin, a former Colony employee, prove he is his own man – and makes Accor an easier sell to outside investors.
Activism is lost in translation at Vivendi 23 Mar 2015 The French media group is the object of a transatlantic clash between U.S. investor Peter Schoenfeld and group chairman Vincent Bollore. Vivendi could indeed be more shareholder-friendly. But Schoenfeld may struggle to win large institutional support in Paris.
Poll rout could end Hollande’s French reform push 23 Mar 2015 The defeat of the president’s Socialist party and the strong showing of far-right National Front will weaken an already tentative commitment to economic change. Hollande may hope that a euro zone recovery and ECB help will pull France out of the doldrums. That gambit is risky.
Holcim scores clear victory in Lafarge deal 20 Mar 2015 The Swiss cement maker has reset deal terms with its French partner. That’s fair – the new exchange ratio keeps the tie-up a merger of equals. But Holcim has also managed to veto Lafarge’s Bruno Lafont as CEO. Lafarge’s concession suggests its shareholders are anxious for a deal.
Chanel’s China price cut signals luxury turbulence 20 Mar 2015 The fabled French brand has taken the unprecedented step of lowering prices in Asia. The weak euro has fed a troublesome grey market and fueled perceptions high-end groups are ripping off Eastern shoppers. Despite the risk to their bottom lines, rivals may have to follow suit.
Lafarge-Holcim merger can be rescued as takeover 16 Mar 2015 The European cement makers disagree about the financial terms and governance of their planned tie-up. A “merger of equals” has foundered yet again. To keep the deal’s benefits, the way forward would be for Lafarge to agree to be bought for a suitable premium.
Holcim can push for more in Lafarge tie-up 13 Mar 2015 The Swiss cement group is outperforming its French rival, creating cracks in their $44 bln union. A special dividend or higher exchange ratio could fix matters. That is more likely to happen than deal failure, given that both sides would suffer if it fell apart.
French telco buyout shows dealmaker in a hurry 2 Mar 2015 Vivendi is selling its residual 20 pct in Numericable-SFR to the mobile operator itself and parent Altice for 3.9 bln euros. This helps Altice’s billionaire boss Patrick Drahi prepare for a follow-on deal with Bouygues. It’s harder to see why Vivendi would accept a big markdown.
Weak euro can lift Airbus profit further 27 Feb 2015 The European aircraft maker pleased investors with higher-than-expected operating profit and a 60 pct dividend hike. Higher profitability was driven by a weaker euro. With that currency tailwind likely to persist, the annual results give a foretaste of future improvements.