Peugeot can beat its muted profit target 14 Apr 2014 Timid goals sent the French carmaker’s shares down 7 pct. While woes in Brazil and Russia will dent earnings, the new CEO seems to be trying to under-promise and over-deliver. The group is well placed for a recovery in Europe and has a plausible new strategy.
Lafarge and Holcim should get selling 10 Apr 2014 Investors worry the cement groups’ $50 bln merger will destroy value, with rushed disposals to win antitrust clearance. But if the Franco-Swiss duo has found the right assets to sell, and the synergies stack up, it’s worth swallowing some losses to get on with the integration.
Iliad has upper hand over Bouygues after SFR sale 10 Apr 2014 Having lost the fight for mobile group SFR, French conglomerate Bouygues could be better off selling its own telecoms unit to rival Iliad. But Iliad has little reason to pay the mooted 8 bln euro price tag, and time is on its side.
Even a $50 bln deal can be banker-lite 7 Apr 2014 Mega-mergers usually have every bank in town advising, led by local names. Holcim’s tie-up with Lafarge is different. The Swiss company is using one bank, a U.S. firm. Independents lead the French side. It’s good for investors: they’ll have more unconflicted research on the deal.
Lafarge-Holcim share jump has gone far enough 7 Apr 2014 The planned $50 bln merger of the French and Swiss cement groups has added a combined $5 billion to their market capitalisations. Credible synergies could be worth much more. But uncertainty over completion and the risk of value-destructive forced disposals justify scepticism.
Cement megadeal heralds industrial merger comeback 6 Apr 2014 Holcim and Lafarge are set to unveil a $55 bln cement behemoth. This “merger of equals” rests on skilful construction to assuage French politics. The ambition of combining two sector leaders amid big antitrust obstacles shows that CEOs are ready to take M&A risk to boost returns.
Vivendi snubs government with SFR sale to Altice 6 Apr 2014 The French group ignored state pressure and will sell its mobile division to cable operator Altice. It cites execution risks and a desire to keep a stake in SFR’s future upside as reasons for rejecting a rival offer by Bouygues. Consumers and Vivendi investors look better off.
Bouygues tries last-minute less-is-more SFR bid 4 Apr 2014 The French construction group has come up with its fourth offer for Vivendi’s mobile arm a few hours before a decisive board meeting of the media conglomerate. It proposes more cash for a smaller overall valuation. That places high hopes on Vivendi’s preference for cash.
French cabinet reshuffle creates policy confusion 2 Apr 2014 Francois Hollande has chosen an odd couple to tackle France’s economic malaise. Old hand Michel Sapin will be finance minister while anti-globalisation crusader Arnaud Montebourg will run the economy ministry. The crude effort to please both markets and the public will backfire.
New French PM’s main challenge: his own party 1 Apr 2014 Manuel Valls will take over the French government after the ruling Socialist Party’s debacle in municipal elections. The interior minister’s free-market leanings suit President Hollande’s new supply-side views. But to conquer, Valls must fight off more traditional Socialists.
Alstom warms up turnaround plans with $1 bln sale 1 Apr 2014 The ailing French engineering giant is selling its heat exchanger unit to private equity group Triton for 730 mln euros. It’s an important milestone, but Alstom’s asset disposal programme will have to go further. The group is also under pressure to deliver on cost cuts.
Russia good place to start for DSK’s macro fund 21 Mar 2014 Dominique Strauss-Kahn, the former IMF chief who quit under a cloud, is trying to raise $2 bln for a hedge fund. The first stop on the roadshow is China. But given current events, maybe his best bet is to convince his Russian friends that he’ll do better in finance than politics.
Bouygues’s latest SFR offer may still fall short 21 Mar 2014 The French group has made a new pitch for Vivendi’s mobile unit, with 1.85 bln euros more cash and the backing of state-owned bank CDC. That puts some pressure on preferred bidder Altice. But Bouygues’s deal remains riskier. It may need to offer more equity - and a big break fee.
Orange faces strategic bind in Spain 21 Mar 2014 The French telco is caught between Telefonica and a strengthened Vodafone-Ono. Orange needs a bigger high-speed network in Spain. Buying $3.8 bln Jazztel would help, but it is expensive. That leaves riding off other networks, or taking a gamble on pulling back from “quad play”.
Credit Agricole upends French bank hierarchy 20 Mar 2014 The farmers’ bank is reversing its failed pre-crisis strategy of careening into the euro zone periphery. CredAg will instead focus on a tighter range of European markets. Yet its return and payout pledges now look juicier than more celebrated domestic rivals BNP and SocGen.
Total’s solar boast may prove short-lived 17 Mar 2014 The French oil giant’s CEO has bragged about the profit made on a $1.5 bln stake in SunPower. But that’s hardly the benchmark if Total’s aim is to build a long-term solar business. Moreover, the panel maker’s rich valuation and dimming prospects could soon weigh its shares down.
Iliad wins either way in French telco battle 10 Mar 2014 The maverick outfit has sown upheaval in French telecoms. Now it is reaping the rewards. Either rival Bouygues buys Vivendi’s SFR, and sells assets to Iliad to preserve competition. Or cable rival Numericable buys SFR - which could push Bouygues Telecom itself into Iliad’s arms.
Market needs convincing that Bouygues can win SFR 6 Mar 2014 The family-backed group has bid 19 bln euros for SFR, Vivendi’s mobile unit. That’s far more than rival Numericable is said to be offering. Yet Bouygues shares are only pricing in a sixth of the promised benefits. Competition worries and a sweetened counterbid are real risks.
SFR sale would transform French telecoms 5 Mar 2014 Vivendi may sell its mobile unit to Numericable or Bouygues for 15 bln euros or more. The first option creates a big “quad-play” rival to Orange. The second curbs competition in France’s tough mobile market. Failure will hurt whoever loses. And more M&A could follow.
SFR deal would still leave loose ends at Vivendi 25 Feb 2014 A 15 bln euro sale of the French mobile unit would further reduce Vivendi’s conglomerate status. The reinvention has delighted investors but is incomplete. With a possible continuing stake in SFR, plus music, TV and Brazilian broadband, Vivendi’s raison d’etre is hard to fathom.