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Gapping down:
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SIA could merge with Nexi – report (translated)
15 OCT 2018
SIA, the Italian company operating in the monetics, could merge with Nexi, the Italian financial services group focused on card payment services, according to the Italian newspaper L’Economia de Il Corriere della Sera.
The report, which cites sources close to the situation, said that Cassa Depositi e Prestiti (CdP), SIA’s main shareholder, has already hired its advisor in order to consider such a merger. Following such a move, the company could also be listed, added the report.
The new entity is valued in the region of EUR 10bn and it would create synergies for EUR 100m per year, concluded the item.
A previous report noted that SIA had attracted the interest also from Poste Italiane [BIT:PST], the Italian postal service provider.
Anheuser-Busch InBev Stock Could Bring You Double-Digit Returns
Beer is boring. That’s Wall Street’s view—if the performance of the stock of the world’s biggest brewer, Anheuser-Busch InBev , is any guide. After a 24% drop year to date to $84 per share, the shares are back to where they were six years ago. Their all-time high was $133, hit in September 2016.
Still, the market’s dislike of AB InBev could offer an opportunity for double-digit returns for patient, income-oriented investors, making it our choice for Barron’s Pick, which showcases a stock pick every Wednesday morning on Barrons.com.
North American beer volumes, with the exception of craft and premium beers, have been flat to down for years, says Consumer Edge Research’s Brett Cooper. In the first half, AB InBev’s North American volumes were down 4.5%. The bad news, good news: AB InBev got 72% of its volume from emerging markets last year, a business hurt by economic woes and a strengthening dollar.
The long run looks brighter. AB InBev has a dominant position in markets that should grow long term. The company has strong management and unparalleled scale and efficiency, and has been reducing costs—$2.5 billion this year. Its game plan—growing sales organically while deleveraging—may not be sexy, but should provide a long-term edge. “We expect low- to mid-single-digit revenue growth translating into mid- to high-single-digit EPS growth,” says Cheviot Value Management portfolio manager Darren Pollock.
Then there’s the dividend, which boasts a 5.5% yield. Add that to stronger earnings and you get double-digit annual gains over the next several years. True, with $109 billion in debt, leverage is a concern. But as Pollock says, even with a dividend cut, AB InBev prospects look stout.
Roberto Cavalli sponsor hires Rothschild for minority stake sale, sources say
15 OCT 2018
Roberto Cavalli’s private equity owner Clessidra SGR has mandated Rothschild to sell a minority shareholding in the Italian fashion house, three sources close to and a source briefed on the situation said. The process should launch in the coming months, all three sources close said.
Last month, a news report said Swiss fashion group Philipp Plein is interested in buying into Roberto Cavalli. The same report cited Clessidra’s Managing Director Manuel Catalano as saying no exit from Roberto Cavalli is in the works. Roberto Cavalli is on course to generate a profit this year after an extended turnaround, the report quoted Catalano as saying.
Through investment vehicle Varenne, Clessidra has backed Roberto Cavalli since a 2015 buyout from the eponymous founder for an estimated EUR 390m. L-GAM Advisers and conglomerate Chow Tai Fook Enterprises [HKG: 1929] also hold stakes in the company. In 2017, Roberto Cavalli generated turnover of EUR 152.4m. It generated negative EBITDA of EUR 7.1m, against negative EBITDA of EUR 26.2m in 2016.
Rothschild and Clessidra declined to comment. Roberto Cavalli did not respond to requests for comment. L-GAM and Chow Tai Fook could not be immediately reached for comment at the time of publication.
Clessidra plans to use the proceeds from the stake sale to kickstart its rejuvenation of the Roberto Cavalli brand, all three sources close said.
Clessidra will tout Roberto Cavalli’s improving performance and bright prospects to potential buyers, the first source close said.
Clessidra will also seek to ride a boom in Italian fashion M&A, the source briefed said. In June, Missoni saw state-backed PE firm Fondo Strategico Italiano take a stake for an undisclosed sum. Last month, New York-based Michael Kors [NYSE:KORS] acquired Versace for an enterprise value of EUR 1.83bn.
by Micaela Osella in Milan and Barbara Pianese and Fabian Graber in London
Francois Fondeville into receivership, could be acquired by major player – report (translated)
15 OCT 2018
French family-owned construction group Francois Fondeville has been put into receivership by the commercial court of Montpellier on 9 October, French daily Les Echos reported. The report cited a source as saying that the court could consider a sale of the business, which owes a debt of more than EUR 20m, to one of the major players of the sector; the only deal that could ensure the survival of the company, the source added.
The report cited a spokesperson for Francois Fondeville as saying that it remains independent and that the company should be “viable” in 2019 thanks to restructuring changes. The spokesperson added that the rumours about the business were made by competitors with “malicious intent”.
Francois Fondeville was founded in 1910 and is run by the Fondeville family. It generates annual revenues of EUR 150m.
UK shopping centre owned by private equity forced into receivership
Facility is one of first collapses among retail assets bought by opportunistic investors
A shopping centre owned by private equity at the heart of Theresa May’s constituency has been forced into receivership as the crisis in Britain’s bricks-and-mortar retail threatens highly indebted properties.
The insolvency is one of the first significant collapses among dozens of UK retail property assets bought by opportunistic investors earlier this decade. The high levels of debt attached to these properties mean they are especially at risk of default.
Receivers BDO have been appointed to the Nicholsons Centre in central Maidenhead in Berkshire, two people briefed on the situation said, after it became unable to meet its financial obligations.
The failure comes after a series of retailers — including House of Fraser, Maplin, Poundworld and Toys R Us — fell into administration as they struggled with consumers’ shift to online shopping, along with higher wage and tax bills. Other high street chains have been cutting store numbers, reducing nationwide demand for retail property.
The Nicholsons Centre was bought by Vixcroft, the private equity backed property specialist, and hedge fund Cheyne Capital in 2015 for £37m, according to agents Cushman & Wakefield.
It was financed by a £26m loan from Hermes Investment Management, according to CoStar News, with a loan-to-value ratio above 65 per cent.
The price of the centre three years ago was already less than half the £85m paid by its previous owner, the insurer Irish Life, in 2007.
About 175 UK shopping centres are at risk of a similar fate, according to the property asset managers APAM, after being bought by private equity or other opportunistic owners with large loans between 2012 and 2015.
The centres were bought for a total of £7.5bn, though their value has now fallen, said APAM, which specialises in distressed assets.
Many of these are soon due to refinance, but banks are reluctant to extend new loans against retail assets, while private equity groups do not want to invest more capital. This means the centres risk breaching their loan covenants and falling into receivership or administration. Some are currently on the market at discounted prices.
“This is a big problem for the industry, for town centres, for local jobs,” said Simon Cooke, executive director at APAM.
“We are getting calls from banks and mezzanine [debt] providers in relation to loans they are worried about, asking how to manage once they get into default. This supports our suspicion that this problem is as deep as we think it is.”
The buyers of the Nicholsons centre had hoped to turn around its fortunes with a refurbishment and by redeveloping part of the site; Maidenhead also expects a boost from the eventual arrival of the Crossrail link to central London and Heathrow, expected late next year.
But Next, one of the largest stores at Nicholsons, left the centre this year, while another tenant, Argos, announced its departure last year. BDO have now appointed agents CBRE to sell the centre.
BDO, Cheyne and Hermes declined to comment. Vixcroft could not be reached for comment.