FT : Abu Dhabi’s sovereign wealth fund held detailed talks to buy Lazard

Abu Dhabi’s sovereign wealth fund held detailed talks to buy Lazard
Also in today’s newsletter, UBS faces penalties over Archegos and Adobe’s Figma deal faces EU probe

Abu Dhabi’s sovereign wealth fund ADQ held detailed talks to take Wall Street investment bank Lazard private, in a move that underlined the oil-rich emirate’s ambitions to acquire a western financial services company.

The talks were held this year between Lazard, led by outgoing chief executive Ken Jacobs, and ADQ, led by Sheikh Tahnoon bin Zayed al-Nahyan, the fund’s chair and Abu Dhabi’s powerful national security adviser, said people with direct knowledge of the matter.

Negotiations fell apart after both sides walked away from a deal. Lazard, which is best known for its advisory business in Paris, New York and London, had been focused on maintaining operating independence, one person added.

Lazard said: “As you’d expect, we talk to people all the time but we don’t comment on speculation.” ADQ declined to comment.

A deal would have marked the end of a remarkable 175-year run for Lazard as an independent financial house that withstood world wars, massive shifts in the global economy and various tensions between its larger-than-life rainmakers on both sides of the Atlantic.

>>> What to look at today - 20th of June 2023

Stocks declined Tuesday as the rally in global equities lost momentum and investors fretted over China’s tepid post-pandemic recovery. European equity futures ticked lower, US contracts declined after Wall Street was shut for a holiday Monday and Hong Kong shares led declines in Asia, with the Hang Seng China Enterprises Index falling more than 2%.  The broad negative moves pointed to further anxiety about Chinese growth and the lack of fresh stimulus from Beijing. Chinese property companies were among the decliners after disappointment at the magnitude of cuts by banks to their lending rates, with the 10-basis points reduction to the key five-year rate on Tuesday coming in less than some projections. The yen weakened to 142 versus the dollar as Japan’s loose monetary policy weighs on the currency. The yuan depreciated slightly, taking declines to a third day. The cost for banks to borrow Hong Kong dollars from each other for a month rose to the highest level since 2007. The move comes after prolonged currency intervention shrank the city’s liquidity pool and demand for cash climbed.  The Australian dollar dropped 0.7% after minutes from the latest central bank decision — when rates were unexpectedly hiked — showed that the case to move in either direction was finely balanced. Australian stocks extended gains and short-term yields on government bonds changed direction and fell after the central bank minutes were released.  US Treasury yields rose after the break from trading Monday.  Meanwhile, with the path of Federal Reserve interest rates increasingly uncertain, US traders are vacillating between the lure of the rally and concern it’s exhausted and that the market has become overbought. Looking ahead, Fed Chair Jerome Powell will give his semi-annual report to Congress on Wednesday. Federal Reserve Bank of St. Louis President James Bullard and his counterparts in New York and Chicago are also among this week’s speakers. Policymakers at the Fed kept interest rates unchanged at their latest meeting but warned of more tightening ahead. The decision last week came with forecasts for higher borrowing costs of 5.6% in 2023, implying two additional quarter-point rate hikes or one half-point increase before the end of the year. Gold inched lower while oil fell as China’s plans to support its economy were seen as insufficient to reignite demand.

Macro :
- SPAIN TO END BIG FOUR LABOR PROBE WITH NO MAJOR SANCTION: CONFI
- EU Prepares to Launch Adobe-Figma Antitrust Probe This Year: FT

Keep an eye on :
- ADP FP : ADP May Passenger Traffic +18.8%
- APPS SM : Apax, Apollo Mulls Bidding for Spain’s Applus: Expansion
- ARGX BB : Argenx Starts Second Cohort of Phase 2 ARDA Empasiprubart Study
- BP/ LN : BP Withdraws Objection to Orsted’s UK Offshore Wind Farm
- COREA SS : Sweden’s Corem Gets Negative Outlook on BBB- Rating at Scope
- EDF FP : EDF Head of Gas Trading Alex Watson Leaves Company
- HKY NO : Havila Kystruten Offering of 688.9m Shares Prices at NOK1.10/Shr
- EQT SS : BPEA EQT-Led Group Buys HDFC Credila for $1.3 Billion
- FRAS LN : Frasers Group Discloses 4.32% Voting Rights in Currys Plc
- GALP PL : Portugal’s ENSE Says Gasoline Consumption Rose 18% in May
- IGR LN : IG Design FY Revenue Misses Estimates
- DEC FP : JCDecaux Wins 6-Year Advertising Deal With Sporveien Media
- LAT FP : Latecoere Wins Boeing Wiring Systems Contracts
- LXS GY : Lanxess Set For Material Downgrades After Warning: Street Wrap
- LAZ US : Abu Dhabi’s ADQ, Lazard Deal Talks Held This Year Fell Apart: FT
- LOOK LN : Alpha Auto Group to Buy Lookers Plc for 120p/Share in Cash
- LHA GY : Lufthansa Pilots Union Says Pay Offer Insufficient
- NESTE FH : Neste, Finnish Energy Firms Plan Industrial Hydrogen Production
- NEOEN FP : Neoen Guidance Implies Meaningful Upside, Morgan Stanley Says
- OPG LN : OPG Power Ventures Says Performance is in Line With Market Views
- ORSTED DC : BP Withdraws Objection to Orsted’s UK Offshore Wind Farm
- OTEC NO : Otello to Start Share Buyback With Max Price of NOK15/Share
- SPIE FP : Spie Buys Enterprise Communications & Services GmbH; No Terms
- RNO FP : Renault CEO to Take on Leadership of EV Arm Ampere as Well
- SAGA LN : Saga Sees Earnings in Line With Guidance
- SGO FP : TotalEnergies, Saint-Gobain Sign 100 GW Biomethane Purchase Deal
- SAN FP : Sanofi Not Liable to Indemnify Boehringer Ingelheim for Zantac
- SANN SW : Santhera Licenses Vamorolone in North America to Catalyst
- GLE FP : SocGen to Bring Securities Back-Office Ops in-House by 1H24
- SOW GY : Silver Lake Secured 41% of Software AG After Bain Sold Stake
- STLA IM : Stellantis, Foxconn Create Semiconductors JV SiliconAuto
- STLN SW : Oliver Streuli Named CFO of Rieter Group, Effective August 1
- TIT IM : Telecom Italia Board Examining Netco Offers From CdP and KKR
- SWEDA SS : Swedbank Reaches Deal With US OFAC to Make Payment of SEK37m
- UHR SW : Switzerland May Watch Exports Rose 14.4% Y/Y
- TIT IM : Telecom Italia Nears Picking KKR for Network Sale Negotiations
- YIT GH : YIT Sees Potential to Release About €400M of Capital by End 2024

>>> Stoxx 600 Pre-Market Indications

  • Sanofi (SNW TH) +2.1%
    • Sanofi Not Liable to Indemnify Boehringer Ingelheim for Zantac
  • Imperial Brands (ITB TH) +1.6%
  • Heidelberg Materials AG (HEI TH) +1.5%
    • Heidelberg Materials AG Raised to Outperform at BNPP Exane
  • Airbus (AIR TH) +1.4%
  • Qiagen (QIA TH) +0.9%
  • BAT (BMT TH) +0.7%
  • Rio Tinto (RIO1 TH) +0.6%
    • Watch Europe Miners as Iron Ore Drops on China Lending Rate Cut
  • UniCredit (CRIN TH) -1.2%
  • Rational (RAA TH) -1.3%
  • Sartorius (SRT3 TH) -1.3%
  • Moncler (MOV TH) -1.4%
  • BASF (BAS TH) -1.5%
  • Evonik (EVK TH) -2%
  • Wacker Chemie (WCH TH) -2.1%
  • Covestro (1COV TH) -2.7%
  • AAK (6AA0 TH) -2.9%
  • Lanxess (LXS TH) -7.9%
    • Lanxess Set For Material Downgrades After Warning: Street Wrap

>>> TradeGate Pre-Market Indications

DAX:
  • Qiagen (QIA TH) +1.7%
    • Qiagen Reinstated Equal-Weight at Morgan Stanley; PT 50 euros
  • Airbus (AIR TH) +1.4%
  • Heidelberg Materials AG (HEI TH) +1.4%
    • Heidelberg Materials AG Raised to Outperform at BNPP Exane
  • Sartorius (SRT3 TH) -1.1%
  • BASF (BAS TH) -1.5%
  • Covestro (1COV TH) -2.7%
    • Lanxess Set For Material Downgrades After Warning: Street Wrap
MDAX:
  • Evotec SE (EVT TH) +0.2%
  • Software AG (SOW TH) -0.7%
    • Bain’s Rocket to Sell Entire Software AG Stake for EU32/Share
  • Wacker Chemie (WCH TH) -1.8%
  • Evonik (EVK TH) -1.8%
  • Lanxess (LXS TH) -7.5%
    • Lanxess Set for Material Downgrades After Warning: Street Wrap
SDAX:
  • Adtran Holdings (QH9 TH) +1.6%
  • Elmos Semiconductor (ELG TH) +1.3%
  • Basler (BSL TH) -1.6%

>>> Europe : Brokers Upgrades & Downgrades - 20th of June 2023

>>> Up
* Barclays PT Raised to 320 pence from 300 pence at Jefferies
* Capital & Regional Raised to Add at Peel Hunt
* Heidelberg Materials AG Raised to Outperform at BNPP Exane
* Nordic Semiconductor Raised to Buy at Nordea; PT 160 kroner
* Philip Morris Raised to Buy at Citi; PT $117
* Supermarket Income Raised to Hold at Peel Hunt
* Vaisala Raised to Accumulate at Inderes; PT 44 euros

>>> Down
* Cherry Cut to Neutral at Oddo BHF
* Comet Cut to Market Perform at ZKB
* Getinge Cut to Hold at DNB Markets; PT 215 kronor
* Hexagon Cut to Hold at DNB Markets; PT 140 kronor
* Know IT Cut to Sell at Handelsbanken
* LXI REIT Plc Cut to Hold at Peel Hunt
* Mithra Pharma Cut to Hold at ING; PT 2.80 euros
* RWE Cut to Add at AlphaValue/Baader
* Sartorius Cut to Neutral at Oddo BHF; PT 325 euros
* Sats Cut to Hold at DNB Markets; PT 12 kroner
* Tritax EuroBox Cut to Hold at Peel Hunt
* Verkkokauppa.com Cut to Reduce at Inderes; PT 2.90 euros

>>> Initiation
* Qiagen Reinstated Equal-Weight at Morgan Stanley; PT 50 euros

>>> Call
* Man Group Rated Buy at Peel Hunt, Low Valuation Is ‘Anomalous’
* Neoen Guidance Implies Meaningful Upside, Morgan Stanley Says
* Peel Hunt Rejigs Real Estate Ratings With Three Raises, Two Cuts
* US Foods Upgraded at MS on Optionality, Performance Food Cut

WWD : Pharrell Williams on Louis Vuitton Debut: “It’s Like Love at First Sight.”

Pharrell Williams on Louis Vuitton Debut: “It’s Like Love at First Sight.”
The musician plans to double down on bags and the brand's signature Damier check in what he promises will be a "crazy show."

PARIS – Last Thursday, the countdown to Pharrell Williams’ debut for Louis Vuitton officially began with the reveal of his first campaign as creative director of menswear, featuring a pregnant Rihanna.

The image did not appear on Vuitton’s social media accounts. Instead, Williams posed in front of a giant billboard on the Seine-facing side of the Musée d’Orsay in Paris and posted the image to his Instagram account, underlining just how much clout he enjoys as the first global music star to take the reins of a top luxury house.

Later that morning, Williams appeared at Vuitton’s headquarters wearing the same outfit: a black biker jacket and flared pants made from the house’s signature Epi leather, which is more commonly used for bags and wallets. The look, it turns out, was pulled from his spring 2024 collection, due to be unveiled on Tuesday at 9.30 p.m. on the Pont Neuf bridge in Paris in the season’s most highly anticipated show.

Louis Vuitton chairman and chief executive officer Pietro Beccari, joining via Zoom from a car somewhere in Greece where he had just attended the brand’s high jewelry presentation, gently chided his new recruit.

“Pharrell is unveiling the collection piece by piece, because it is already 20 days that he wears the show,” he said, noting that Williams is approaching the assignment from the perspective of a prolific luxury shopper. “He’s impatient and I said, ‘He’s the client, right? So that’s it.’”

“I am the client,” assented Williams, who had accessorized the look with a $1.2 million Richard Mille RM 88 Automatic Tourbillon Smiley watch, solid gold grills, a yellow diamond necklace spelling out the words “God Is,” and an updated version of the custom-made Tiffany & Co. diamond sunglasses that have become his signature eyewear over the last 18 months.

That distinctive style has made the “Happy” hitmaker a hot commodity for luxury brands for the last two decades.

Lest anyone forget, Williams has been active in high-end fashion since codesigning a line of eyewear with Marc Jacobs at Vuitton in 2004.

That was followed by a jewelry collection for the house in 2008, when Beccari was a senior executive at the brand; projects with Moncler and Moynat, and a partnership with Chanel, in addition to his involvement with the more mass-market G-Star Raw and Adidas labels.

Williams appeared in Chanel campaigns, walked in its runway shows, and created a one-off sneaker with Chanel and Adidas Originals in 2017 that generated a waiting list of 120,000 people for 500 pairs. After that came a unisex clothing collection in 2019, designed with the brand’s late creative director Karl Lagerfeld.

“He started in fashion with Louis Vuitton; he went to university with Karl and now he’s got the job of his dreams, which I think he deserves, because he’s a genius at large,” Beccari declared.

Williams is aware that not everyone is thrilled with his appointment, which cements Vuitton’s positioning as a “cultural” brand with broad reach across segments including sports, gaming, music and art.

Some commentators were disappointed that the job didn’t go to one of the young designers rumored to be in the running, even though his predecessor Virgil Abloh also came from a non-fashion background, redefining the role of creative director into something closer to a curator.

“I didn’t go to Central Saint Martins, but I also didn’t go to Julliard either in music and I mean, we see how that turned out,” said the performer, who has won 13 Grammy Awards. “It’s cool. That’s a very fair observation. But neither did Vivienne Westwood, right? Tadao Ando was self-taught. I mean, he’s the GOAT, right? I only aspire to express myself.”

As unexpected as the offer was, “it feels natural,” he continued.

Williams was first introduced to Louis Vuitton through rappers and Harlem tailor Dapper Dan’s bootleg logo designs, but back then, the actual brand felt way out of his league.

These days, he’s firmly entrenched in the luxury world, notably through his friendship with Japanese designer Nigo, who helped him to launch the streetwear labels Billionaire Boys Club and Icecream, and is now creative director at Kenzo, a brand also owned by luxury group LVMH Moët Hennessy Louis Vuitton.

Nigo helped him design the Millionaire sunglasses for Vuitton, and subsequently created several capsule collections with Abloh for Vuitton.

“It’s crazy because you can see a photo of myself with Kanye [West] and Virgil wearing the sunglasses, so it’s like all of this serendipitous connection,” Williams said.

After the picture was taken, West and Abloh went on to found their own fashion lines, laying the groundwork for the crossover between streetwear and luxury that is the template for most menswear today.

“Every day, I gotta to pinch myself because it’s an appointment, and I was chosen,” Williams continued. “Pietro saw something, and I’m touched by that and I honor that every day.”

The two started discussing the prospect of Williams taking on the menswear role in November last year. The announcement came swiftly after Beccari officially joined Vuitton from Dior on Feb. 1, capping a storied 17-year career at LVMH.

“What would you do? Right? Like, you know, you get to come in here with the world’s greatest house; dare I say, unlimited resources. I hardly ever hear ‘no,’ and when I do, it’s always for a real constructive reason, and then I’m given an opportunity to do something even bigger, even greater. This has been nothing but a gift,” Williams said.

Over the last few months, he has drip-fed clues about his debut collection. At his Something in the Water music festival in his hometown of Virginia Beach, Va., in April, the hip-hop star appeared on stage in a biker jacket with rhinestone patches.

An online teaser for the event showed him sitting on top of a monogram-embossed wooden pyramid with the tagline: “Virginia is for LVers,” a twist on the state’s slogan “Virginia is for Lovers” that appeared on Vuitton-branded merchandise sold at the event.

He noted that his appointment was announced on Valentine’s Day.
“It’s like love at first sight,” he said.
“LV is for Louis Vuitton, but it’s also for lovers, you know: lovers of the moment, lovers of detail, lovers of this time and people who want to absolutely squeeze the best out of life, down to the last drop.”

He sprinkled extra pointers into the teaser image, which showed Rihanna wearing a shirt in a pixelated Damier check that is only partially buttoned, exposing her pregnancy bump. Her arms are laden with Speedy bags of various sizes in Vuitton’s signature monogram, but in a range of primary colors, including red, yellow and green, and made of leather instead of canvas.

“Here, I knew I wanted to do a couple things: one, I knew I wanted to make my presence known in bags,” said Williams, citing past projects like the oversized purple Haut à Courroies bag he commissioned from Hermès, and his stint as ambassador for Chanel’s Gabrielle bag.

“Bags are very important to me, it’s very important to the house, and what better person to go on that journey with us than my really good friend?” Williams said of Rihanna, who also has a business partnership with LVMH on her Fenty Beauty line.

“The second thing is, I knew that I wanted to really lean into the Damier, something that hadn’t had such a great concentration in it, and we did so by using the Damier as a platform and as a new artistic discipline, and we have some really interesting expressions,” he said of the checkerboard motif.

Williams said he was building on the work of his predecessors, including Abloh, who made history by becoming the first African-American artistic director at the French luxury house. The men’s position had remained vacant since Abloh’s untimely death in November 2021.

“His spirit is still here and now that I’m here, it’s not cancelling out anything from the past. If anything, it’s just continuing to evolve,” he said.

Beccari noted that Williams is first and foremost a fan of the brand. “He loves details and loves to be very elegant in every occasion,” the executive said.

He described the push-and-pull that defines his relationships with designers, both in his previous jobs and now with Williams and Nicolas Ghesquière, the artistic director of womenswear at Vuitton.

“You have to find the equilibrium, to find the possibility of giving them the freedom of expression of the creative mind, and at the same time, you’re responsible for a huge business, and you have to get some rationality into it, and that’s the difficult part,” he said. “I believe I created special relationships with each single one of them, as I’m creating with Nicolas and with Pharrell, and that’s the pleasure part, when you see this balance.”

He said it involved making concessions on both sides. “I try to be always authentic with them and tell them what I think. I have no hidden agenda,” Beccari said.

He praised Williams for tackling the task with a “humble spirit” and establishing a good rapport with his team. “They see not the star, the superstar, they see a good human being. That’s what makes his coming to Vuitton not only very bold, but it makes it an incredible, positive, energetic addition to the fantastic team that we have,” he said.

Beccari declined to provide figures, but said that Vuitton has potential to increase its men’s business without adding new stores. “Pharrell has a very important role,” he said. “I believe we have a fantastic network. We need to exploit what we have, but in terms of potential, being already big, I think it can be even bigger, and with Pharrell, prosper even more.”

An entrepreneur whose activities extend to film and television, music festivals and nonprofits, Williams is acutely aware of the stakes at Vuitton, the world’s biggest luxury brand and the first to generate annual revenues of more than 20 billion euros.

“It’s a big, big, big, big, big, big plane that we take off in when we do it, you know? And here we are on a tarmac right now, headed toward the 20th, and we’re about to take flight,” he said.

It promises to be a spectacular event in every respect, and one that will go down in the annals of fashion. Williams confirmed that the front row of his show would be stacked with celebrity friends. “It’s like ‘Game of Thrones,’ House Vuitton. It’s very important. It’s just such a momentous occasion,” he said.

Expect exclusive music on the soundtrack. “One [track] that I’ve been working on for, like, 10 years,” teased Williams, who has set up a mini studio in his office at Vuitton. “I’m getting into it. I want you to see it. I want you to feel it.”

He was confident ahead of his big night, buoyed by the support of his design studio and Vuitton’s master artisans. “When you add creativity to the highest arc of quality, you get this amazing alchemical reaction, which is a crazy collection, a crazy show, crazy energy and crazy messaging,” he promised.

FT : PwC and KPMG drawn deeper into Brazilian retailer’s accounting scandal

PwC and KPMG drawn deeper into Brazilian retailer’s accounting scandal
Audit firms scrutinised over collapse of Americanas which has shocked corporate

The accounting firms PwC and KPMG have been drawn deeper into the scandal over collapsed Brazilian retailer Americanas after the publication of internal correspondence showing how the company hid billions of dollars of debt.

Americanas’ new management told the Financial Times that it was seeking “context” to explain correspondence between former executives and the two audit firms, which was uncovered by an independent investigation into almost $4bn of accounting irregularities that sent the company into bankruptcy in January.

The retailer last week said for the first time that fraud lay at the heart of the collapse. While it pointed the finger at former executives, the development also raised the stakes for the company’s advisers.

A congressional inquiry was shown evidence on Tuesday that KPMG, which audited the accounts from 2016 to mid-2019, redrafted an internal report so that the final version played down concerns about the company’s financial controls.

And PwC, which was the auditor before and after KPMG’s stint in the role, gave Americanas executives advice in 2016 on how to describe the company’s complicated supply chain finance arrangements. These are alleged to have been used to hide its indebtedness, and the advice obscured key features, Americanas’ current chief executive, Leonardo Coelho, told legislators.

Americanas’ collapse has shocked corporate Brazil and threatens to cast a pall over investment in the country. The century-old retailer is a staple of the Brazilian high street whose largest shareholders — the billionaires Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira — are among the country’s most famous businessmen.

The three men, who have said they had no knowledge of the irregularities, are helping orchestrate a financial rescue by injecting new cash.

The collapse has led to recriminations between investors and creditors and the company’s banks and advisers, and between current and former management. Americanas said last week that an independent investigation launched by the company found evidence of fake advertising contracts as well as unapproved uses of supply chain financing.

Coelho told congress that former executives hid financial irregularities from the board of directors. The advice given by PwC and the changes made by KPMG helped them do so, according to his testimony.

In successive drafts of a report on Americanas’ 2016 accounts, KPMG removed a reference to “significant deficiencies” in the company’s financial reporting and ultimately agreed that the matters needed to be addressed only by management, not at board level, according to slides presented by Coelho.

He also showed an email from a PwC partner in 2016 in which she suggested alternative wording to describe supply chain financing arrangements, which he said obscured whether they should be counted as debt.

The partner “was indicating how to write a text in a final audit letter where the topic . . . was not clear to all involved,” Coelho said.

Americanas said that it would take appropriate legal action against all those responsible for the fraud.

“Regarding audit firms, the analyses are preliminary and need more context due to reports [having been] produced from falsified documents,” Americanas said. “Americanas reiterates that investigations are in progress by authorities and reaffirms that the company is the most interested in clarifying facts.”

Thaynara Rocha, a lawyer at Daniel Gerber Advogados, which is representing a group of minority shareholders, said the two audit firms had the “means of investigating inconsistencies, as well as having a duty to disclose them to the national financial system and capital market”.

“If these frauds were easily detected by [the independent investigation] in a very short period of time, why were they not detected by PwC and KPMG?” she said.

KPMG said it stood by its audit opinions on Americanas, “which were prepared in accordance with professional standards”.
PwC declined to comment either from Brazil or at its global headquarters.

Americanas’ trio of billionaire shareholders and creditors have been hashing out the terms of a financial rescue that would involve them injecting up to R$12bn (US$2.5bn), while creditors accept a debt-for-equity swap, according to local reports.

The company has also said it was selling some businesses, including its fruit and vegetable business, and considering options for others, such as its financing arm.