Italy would have much to gain from Renzi’s success 19 Feb 2014 The power grab by the 39-year-old would-be prime minister has pushed Italian bond yields to near-record lows. If Matteo Renzi can form a government that delivers reform, investors will start to price in the country’s growth potential. The Italian rally could go much further.
Hugo Dixon: Renzi rolls the dice 14 Feb 2014 Italy’s likely new leader is taking big risks by kicking out Enrico Letta. His majority is unstable, he knows little about governing and he is relying on Silvio Berlusconi for a critical reform of the constitution. If Matteo Renzi fails, Italy may need to call in the troika.
Renzi must be more than Italy’s “demolition man” 13 Feb 2014 Matteo Renzi promises change, but his rise to power is starting to look like a classic Roman coup. His rival, Prime Minister Enrico Letta, couldn’t revive Italy’s dormant economy. Renzi may find the task equally tough, and a victory without an election doesn’t help.
Fiat-Chrysler debut marred by Agnelli power grab 29 Jan 2014 The Italian carmaker not only bought its U.S. rival on the cheap. It’s also creating a “loyalty scheme” giving long-term holders extra voting rights. That may help ward off activist investors. But it could also boost the founding family’s control from 30 pct to more than 40 pct.
Hugo Dixon: Renzi-Berlusconi pact gives Italy hope 20 Jan 2014 A constitutional reform deal between the leader of Italy’s largest party and the leader of the opposition addresses one of the country’s biggest problems: its ungovernability. Now Renzi needs to put his energy behind key economic reforms, especially jobs and public spending.
Euro QE puzzle misses French and Italian pieces 16 Jan 2014 Mario Draghi’s dovish stance has raised hopes the European Central Bank could launch asset purchases. Europe’s fragmented money markets and weak lending mean the payoff could be significant. But it can only be done if France and Italy embrace reform.
Europe could live with Italian deficit heresy 7 Jan 2014 Matteo Renzi, Italy’s likely next leader, has suggested Rome could break euro zone fiscal rules. Higher deficits could be good economics and shrewd politics. But to keep markets and euro zone peers from panic, he has to offer lower public spending and faster privatisations.
Stock surge stretches Fiat acceleration hopes 2 Jan 2014 Shares of the Italian carmaker leapt 15 percent after it secured an affordable way to take full ownership of Chrysler. The deal is good news and underpins an expected recovery in earnings. But investors are in danger of overpaying for the stock.
Chrysler deal gives Fiat a new year’s turbo boost 2 Jan 2014 Boss Sergio Marchionne comes out on top in the $4.3 bln pact with the union trust fund for the rest of the carmaker’s shares. It ends a messy dispute, avoids an IPO, doesn’t overtax the Italian firm’s finances and gives Marchionne more resources to get Fiat driving forward.
Foundation puts MPS in scorched hot spot 30 Dec 2013 The Sienese charity that owns one-third of Italy’s oldest bank has bought itself some time. By delaying a much-needed rights issue, it may salvage more value from its shareholding. But it is playing with fire. The foundation, and Banca Monte dei Paschi, could be badly burned.
Deutsche, MPS find convenient exit from swaps mess 20 Dec 2013 Monte dei Paschi has settled a lawsuit with Deutsche Bank over their controversial financing deal. MPS pays 220 mln euros less to close the position and pleases regulators by cutting exposure to Italian government bonds. Deutsche gets shot of one of its trickier legal issues.
Italy gathers ingredients for a slow-cooked reform 19 Dec 2013 Shifts in Italian politics are making reform possible. Silvio Berlusconi has been chased out of government; a reformist leader is taking over the centre-left. Italy needs speedy political and economic medicine to escape its debt trap. At least 2014 won’t be worse than 2013.
Versace’s valuation is as full-on as its outfits 3 Dec 2013 The Italian fashion house is sizing up outside investors and reckons it can triple in value in 3 years. There is real potential, because Versace is so far behind industry trends. But a big price tag for a skimpy stake alongside a powerful family? That’s a hard look to pull off.
Hugo Dixon: Italy has two chances post-Berlusconi 2 Dec 2013 The first is that PM Enrico Letta will push through reforms now Silvio Berlusconi has been kicked out of parliament. If not, Matteo Renzi – who is expected to become the Democrats’ leader on Sunday – should force elections and show he is as radical in deed as he is in words.
Moncler asks investors to wear premium valuation 29 Nov 2013 The private equity-backed maker of feather-filled winter jackets is preparing a Milan IPO of up to $1.1 bln. Entrepreneurial Chairman Remo Ruffini has built an impressive business, with plenty of growth potential. But the price looks rich set against established luxury brands.
Monte dei Paschi poised to perform Houdini act 27 Nov 2013 Not long ago, the ailing Italian lender looked unlikely to fill its 3 bln euro hole privately. Now it’s secured underwriters. For local worthies that once owned half, it should mean near-total dilution; for other investors it’s a cheap option on a still-elusive Italian recovery.
Italy finds a hidden trove of bank capital and tax 15 Nov 2013 The government wants the nation’s banks to revalue their stakes in the Banca d’Italia. It says the move addresses a conflict created by banks owning central bank shares, but the deal would look more like a tax grab by a cash-strapped treasury, and a mini-bailout for the banks.
Telecom Italia buys time for better Telefonica deal 8 Nov 2013 The Italian telco will exit Argentina, issue convertible bonds, and sell mobile phone towers to cut debt and boost investment at home. The plan, backed by part-owner Telefonica, won’t entirely solve TI’s debt problem. But TI avoids a firesale of its prized Brazilian unit.
Chrysler needs $18 bln valuation to justify IPO 30 Oct 2013 That’s the point where the union trust fund that owns 41.5 percent of the Detroit automaker would reap more than it could ever get from Fiat. Hitting that figure is doable but would require margins to double by 2015 and investors to forgo a minority discount. It’s a big gamble.
Ferrero could be worth $25 bln 21 Oct 2013 The Nutella maker denied reports of a bid from Nestle and says it’s not for sale. Still, the family-owned firm boasts top brands, fat margins, scarcity value and emerging-market potential. Despite a huge price tag, one day it could fit well with the Swiss giant or another rival.