Santander offers scant relief for capital seekers 9 Jan 2015 The Spanish bank raised 7.5 bln euros of equity in a few hours. The huge placing required a 10 pct headline discount – large for a bookbuild, but reflecting the size and a position of need. Santander had some advantages. Others will have to work harder to remedy capital denial.
Response to Paris attacks caught between two risks 7 Jan 2015 The killings at the Charlie Hebdo weekly put French and European authorities at the confluence of two dangers – individual acts of violence and excessive countermeasures. Fringe parties may benefit if the response is too weak. Media freedom might suffer if it is too strong.
Europe returns to Franco-German axis of neurosis 2 Jan 2015 A prolonged economic slump highlights Europe’s core problem: a crisis in the French-German partnership. Populist parties are rising and the UK could leave the EU. Although many countries still want to join, it’s up to Paris and Berlin to make the case for a rejuvenated Europe.
Uber’s law flouting could bring joyride to a halt 15 Dec 2014 The taxi app company is covering drivers’ fines for illegal pick-ups. That may be just another business expense to a firm that earned a $40 bln valuation by moving quickly and breaking the rules. But the legal, lobbying and PR costs of reckless behavior are accelerating fast.
Technip’s M&A ambitions need firmer foundations 15 Dec 2014 The French oil services company has dropped plans to buy rival CGG. Relieved shareholders pushed the thwarted bidder’s shares up 7 pct: scepticism about pairing an engineer with a marine surveyor was rife. Technip still wants to diversify. It will have to make a better case.
Airbus investors are caught in crosswinds 11 Dec 2014 The aircraft maker disappointed investors with a lacklustre 2016 outlook, mainly due to big R&D outlays and increasing costs of producing new planes. Yet medium-term prospects look good and a sale of the $5 bln Dassault stake could bridge temporary shortfalls.
Saint-Gobain’s deal cunning could backfire 8 Dec 2014 The French materials group is seizing control of Swiss peer Sika by paying $2.8 bln for a minority family stake which has majority voting rights. Sika’s board is laudably indignant. And Saint-Gobain’s tactics have a hidden cost of upsetting other investors and the target’s staff.
Debt powers Altice into European TMT’s big league 1 Dec 2014 Patrick Drahi’s telecom group paid $23 bln for France’s SFR and is nearing a $9 bln Portuguese purchase. More deals may follow. Cheap debt and euphoria about cable have helped. The billionaire’s team will have to excel at integration to run an empire that dwarfs many blue chips.
Investors can forgive BT going back to the future 26 Nov 2014 If the former British Telecom buys Telefonica’s UK mobile business, it will regain a unit demerged in 2001. The round-trip is unusual but forgivable. 02’s demerger delivered good returns for BT investors who kept their stock. BT refocused, and its re-entry to UK mobile is timely.
Areva holders pay for years of state blunders 19 Nov 2014 The French nuclear plant maker lost a fifth of its market cap after a profit warning. The state still owns 90 percent of the group, limiting the damage. But the collapse is an opportunity to review a long series of destructive government errors, both industrial and political.
Investors might get hurt in French privatisations 17 Nov 2014 The government is planning to sell 5-10 billion euros of assets this year, starting with stakes in state-owned utilities. That’s welcome, but in the process Paris wants to increase its voting rights of the remaining stakes, disadvantaging outside shareholders.
Euro zone stuck between health and healing crisis 14 Nov 2014 The dreary 0.2 pct quarterly increase in GDP is a reminder of the region’s inability to shake off its long-standing malaise. But the news is nowhere near bad enough to spur any of the radical policy changes which might make a substantial difference.
BNP Paribas could make an MPS merger work 11 Nov 2014 After a tough year, doubling up in Italy to buy ailing Monte dei Paschi would be a bold move for France’s biggest bank. But synergies could exceed 3 bln euros, while political obstacles and asset quality fears have eased. If BNP was tempted, it could drive a hard bargain.
Hermes shows it is immune to luxury brand fatigue 6 Nov 2014 The French leather goods maker is riding high on strong sales, outpacing rivals LVMH and Kering in every region of the world. This can last as long as the group’s firm hand on expansion prevents the over-exposure now hurting the bottom line of its growth-hungry peers.
SocGen investment bank stuck with revenue problem 6 Nov 2014 France’s second-largest listed bank had a poor third quarter in trading, with its top line falling faster than at peers. SG’s track record in cost control should help sustain returns in investment banking. Further out, the integration of broker Newedge may come to the rescue.
Publicis overpays with $3.7 bln digital takeover 3 Nov 2014 The French ad giant is buying U.S. digital specialist Sapient. The all-cash takeover comes at a big premium and with limited scope for synergies. This looks a value-destructive attempt to distract from Publicis’ faltering performance after its failed merger with Omnicom.
BNP’s U.S. demons repelled but not quite banished 31 Oct 2014 France’s largest listed bank rebounded from a U.S. mega-fine with an 11 pct rise in Q3 profit. A big drop in volatility helped everything but trading. Now, though, volatility is up and the upcoming temporary dollar-clearing ban for U.S. sanctions breaches may cause more pain.
Alcatel shifts up a gear despite U.S. worries 30 Oct 2014 Surprisingly good news on profit margins lifted the telecoms equipment firm’s shares. The stock is volatile and still down sharply this year. But Alcatel looks to be coping with a U.S. spending slowdown better than some rivals. Its sweeping restructuring remains on track.
Sanofi board chaos risks derailing recovery 29 Oct 2014 The French pharma group has dumped its chief executive. Chris Viehbacher’s position may have been untenable but his exit hurts Sanofi at a fragile time. Chairman Serge Weinberg will temporarily take the CEO mantle. He needs to act fast to stabilise the governance.
France’s cable king closes in on mobile prize 29 Oct 2014 Patrick Drahi’s Numericable has launched a 4.7 bln euro rights issue to help fund the takeover of French telecoms rival SFR. The harder work will come once the cash is in. Numericable has to find 10 bln euros in promised synergies and cope with stiffer competition from Bouygues.