Generali dark arts still allow Intesa bid 24 Jan 2017 The Italian insurer has snapped up a stake in the country’s largest bank, rumoured to be planning a takeover with Allianz. The step makes it harder for Intesa Sanpaolo to build a stake in Generali and wield influence. But as the market has noticed, it can still launch a bid.
BT’s Italy scandal is more than a wrong number 24 Jan 2017 The UK telecom found alarming levels of collusion, incompetence and fraud at an Italian business that had been closely vetted by itself and external auditor PwC. The collapse in BT’s shares – far more than the actual losses – shows a pressing crisis of trust, not just accounting.
Generali woes defy easy M&A solution 23 Jan 2017 The Italian insurer's stock jumped on talk of a takeover by German Allianz. Any deal could face antitrust challenges. A carve-up by rivals might make more sense but is still complex, and politically fraught. For shareholders, the road to value creation looks long and arduous.
Italy is a flytrap for activist investors 19 Jan 2017 The euro zone's third-biggest economy offers some ideal conditions for shareholder activism – and some great reasons to stay away. A fight between Elliott Management and railway-signal maker Ansaldo STS shows plenty of both.
Europe leaves Italian bullying to markets 18 Jan 2017 The European Commission wants Italy to cut its budget deficit. But the cut looks gentle compared with Brussels' rules, probably because elections are looming and anti-establishment forces gathering. In any case, as ECB bond-buying ends, markets will be less lenient.
Losing Luxottica could be strangely good for Italy 16 Jan 2017 The sunglasses-maker will lose its Milan listing in merging with France's Essilor. It follows the sale of other Italian icons like Italcementi and Pirelli, and may fuel angst over Gallic takeovers. In reality, it shows Italy is open for business, and cleans up a messy situation.
Eyewear megadeal more corrective than visionary 16 Jan 2017 Luxottica's founder is backing a 50 bln euro merger with French lens-maker Essilor, and is willing to cede control and some value to get the deal done. For the Italian group's other shareholders, that's a fair price for fixing governance issues and perhaps selling more specs.
Market bets Fiat mess is a muddle, not a fiddle 13 Jan 2017 After a rebound in the carmaker's shares, investors are pricing in a $1.8 bln emissions hit. Were Fiat Chrysler's sins to be like VW's, it would be up to $4.2 bln. For now investors seem to be hoping Fiat made a technical slip-up rather than an intentional manipulation.
Marchionne legacy in Trump administration’s hands 12 Jan 2017 Fiat Chrysler's CEO wants to retire in 2019 with the carmaker nicely profitable and flush with cash. A U.S. agency's charge of emissions cheating, and possible $4 bln-plus fine, could make that roadkill. Appealing to the Trump team's anti-regulatory zeal may be his only chance.
UBI takes slow road to Italian bad debt solution 12 Jan 2017 The lender is raising 400 mln euros to buy the remains of three failed small banks. It’s a good deal, but UBI could have raised more and boosted bad debt reserves, like larger rival UniCredit. A thin buffer places too much faith in Italy’s fragile economy and fraught politics.
UniCredit fixed pay cuts are double-edged sword 11 Jan 2017 The Italian bank's chair cut his salary by 40 pct, following the example of new CEO Jean-Pierre Mustier. UniCredit pay was too high relative to peers, and restraint is welcome. Risks associated with cutting fixed as opposed to variable pay mean it's unlikely to catch on, though.
More EU banks will be bailed out rather than in 4 Jan 2017 Monte dei Paschi's 9 bln euro recap using public funds seems at odds with reforms making creditors pay. Various loopholes make it just about kosher. Yet these fudges - plus the difficulty of nailing down when a bank is truly bust - imply more states will pay for lender follies.
ECB’s tough love is good for banks, bad for Italy 28 Dec 2016 The European Central Bank says Monte dei Paschi needs 9 bln euros of extra capital - up from 5 bln euros - after seeking state aid. Raising the bar is a prudent response to prolonged uncertainty. But it adds to Rome’s debt, and may push up the bailout bill for other banks.
Europe’s best antidote to populism is unpopularism 28 Dec 2016 Parties that promised to take on the elite had a roaring 2016. Even so, the withering of the moderate centre isn’t inevitable. In Greece the pendulum is swinging away from radical government. Liberals with sound economic policies can win – if they’re willing to make enemies.
Italy’s Monte dei Paschi bail-in is a bailout 23 Dec 2016 EU rules require states that rescue banks to force losses on creditors, or convert them into shares. Italy's MPS rescue allows retail investors to swap bonds for safer ones, leaving the government holding the bag. It's a 2008-style bailout, complete with financial engineering.
JPMorgan’s Monte Paschi flop is in eye of beholder 23 Dec 2016 The U.S. bank led the attempted private rescue of Monte dei Paschi and thus shares some of the blame for its failure. But lost fees hurt it too. Delaying a bailout until after Italy's referendum also means the career of ex-PM Matteo Renzi may have a second act.
Monte dei Paschi endgame can still be made fair 22 Dec 2016 Italy's third-biggest bank unsurprisingly failed to raise 5 billion euros. A forcible debt-for-equity swap would limit state money. If compensation was only paid to mis-sold retail creditors, MPS could be rescued within European rules and without unfairly hitting taxpayers.
Mediaset shares on the up bit of a rollercoaster 21 Dec 2016 Silvio Berlusconi's group has soared in value on hopes of a takeover by Vivendi, controlled by Vincent Bollore. The French tycoon may still unlock a breakup value higher than the current share price. Yet his objectives aren't clear, and Mediaset may also face a big dip.
Italy will find itself in market crosshairs again 19 Dec 2016 With rates rising, countries with high debt and fragile growth are vulnerable. Italy's political weakness makes tough choices on reform or spending cuts even harder. Even though the European Central Bank will keep buying government bonds in 2017, investors' nerves will be tested.
Intesa’s Iran fine brands it sinful but also inept 16 Dec 2016 Italy's second-largest lender has been fined $235 mln by New York regulators for sanctions breaches. Rivals have paid more and Intesa Sanpaolo hasn't been criminally charged. Investors may find the bank's widespread incompetence at least as vexing as its intention to skirt rules.