Italy’s new bank giants hide elusive value 22 Feb 2016 A merger between Banco Popolare and BPM will begin a wave of dealmaking among Rome’s mutuals. It could create Italy’s third-biggest bank and add over 40 percent to the companies’ value. While cost cutting may be hard and merging disruptive, consolidation is long overdue.
Gucci gives sneak preview of life after turnaround 19 Feb 2016 Kering’s most important luxury brand beat sales estimates in the fourth quarter, the result of more desirable products and a slick advertising campaign. It looks to be putting three years of bumpy growth behind it. Yet falling operating profit margins will continue to drag on the valuation.
Anheuser rolls Asahi on middling beer brands 10 Feb 2016 Though the $2.9 bln price tag is a bit lower than expected, the Japanese brewer’s acquisition of Peroni, Grolsch and Meantime from Mega-Beer clocks in at some 25 times probable EBIT. It’s only justifiable under the demographic logic of the buyer’s shrinking home country.
UniCredit heads into market storm – in leaky canoe 9 Feb 2016 The Italian bank beat 2015 net profit forecasts, and boss Federico Ghizzoni is making progress on a plan to cut costs and boost revenue. Yet UniCredit still looks undercapitalised. It’s a bad time to be a bank, let alone one whose strategy rests on suddenly less-clear growth.
Italy ends up on wrong side of oil punt 8 Feb 2016 Rome’s sovereign wealth fund could lose more than 300 million euros on its investment in oil company Saipem. It’s a bad start for Prime Minister Matteo Renzi’s industrial policy.
Ferrari fiasco earns Marchionne demerit points 2 Feb 2016 Just a month after spinning out of Fiat, the Italian supercar marque has projected weak growth, sending the stock down 13 percent. Ferrari is still a great brand, but investors were wrong to buy boss Sergio Marchionne’s luxury spin. Even after falling, the shares look expensive.
Luxottica wears its dysfunctional governance well 2 Feb 2016 The revolving door at the Italian eyewear group hasn’t spooked the market as much as it should. The shares are up over 30 percent since Luxottica lost the first of three CEOs in 17 months. With steady growth and a rollout in emerging markets, it can afford the dramatics for now.
Italy’s bad bank fit for its one real purpose 29 Jan 2016 The new plan to get bad loans off banks’ books is mind-bendingly complex. But the inputs are quite simple: banks’ desperation, investor greed and rating-agency whims. The lender where it’s most likely to work is Monte dei Paschi di Siena, which happens to be Italy’s biggest woe.
Marchionne’s new Fiat goals verging on fanciful 27 Jan 2016 The Italian auto boss has achieved the near-impossible before, turning around Chrysler, cutting debt and spinning off Ferrari at a luxury valuation. But his new plan to grow operating profit by 20 percent a year looks like a real stretch, especially with the U.S. market peaking.
Italian bad bank satisfies both Rome and Brussels 27 Jan 2016 Italy has a plan to make its lenders healthier by letting them sell toxic debt to new securitisation entities. But overly cushy terms would break state-aid rules. Rome’s fix is a guarantee for which the banks pay a premium – but whose cost is reduced via a sleight of hand.
Generali CEO exit bearish sign for corporate Italy 26 Jan 2016 Mario Greco’s imminent departure from the Trieste insurer to rival Zurich is a direct transfer of Italian talent across the Alpine border. His new employer could use the help. But concerns that Generali’s board was returning to its “salotto buono” days would be worrisome.
Italy nears bullet-biting time on bad debt mess 21 Jan 2016 Rome hopes to get the nod from Brussels for a bad bank to sort its lenders’ toxic debt. The snag: lenders may have to sell at even bigger discounts than Ireland’s did. After years of trying to avoid robust state action, Italy is realising that only brusque treatment will work.
Italy’s banks hit by home folly and European fist 20 Jan 2016 Italian financial stocks are collapsing amid fears that an ECB probe into their huge bad debts will undermine dividend plans. Rome’s weak growth and slow reforms are partly to blame. But European rules preventing bad banks and requiring bail-ins are fanning the flames.
Monte dei Paschi stuck in familiar limbo 12 Jan 2016 The Italian bank’s shares are whipsawing again. MPS doesn’t look like a bail-in candidate: it passed ECB capital tests and its bond values are steady. But with bad debts as a proportion of equity and reserves huge compared to EU peers, investor returns look set at sub-par level.
Brazil M&A saga will test Telecom Italia harmony 8 Jan 2016 Despite denials, speculation that the Italian telco could merge with Brazilian peer Oi is growing. Consolidation makes sense, but a deal looks tricky. A key player is Telecom Italia shareholder Vivendi, which just won board seats. If it favours a quick deal, TI management may not.
Rail feud could set Italy on good governance track 4 Jan 2016 Minority shareholders in STS think Hitachi is offering them less than it effectively paid for a 40 pct stake from Finmeccanica. A decision from regulator Consob could shed light. A vote in favour of small investors would suggest Italian governance is changing for the better.
Bollore and apathy triumph at Telecom Italia 15 Dec 2015 The chairman of Vivendi forced through a bid for board seats at Telecom Italia, despite opposition from other shareholders. The clincher was a low turnout at the vote, a poor sign for TI’s management. Investors apparently prefer uncertainty to unexcitement.
Greater China slowdown bedevils Prada 15 Dec 2015 Over nine months of 2015, U.S. and Middle Eastern sales slipped. But Greater China was the showstopper. Local currency retail sales tumbled 24 pct in the region. The $9 bln label’s chosen focus – it even listed in Hong Kong – is looking like the wrong economic and fashion choice.
Pininfarina deal shows money buys taste after all 15 Dec 2015 Indian conglomerate Mahindra is paying a modest price to control the storied Italian car designer, saving it from high debt, anemic earnings and a jaded business model. As peers Ferretti and Pirelli already found, even Italian engineering flair doesn’t go very far without cash.
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.