>>> Immofinanz should launch EUR 23.5 cash offer for CA Immo - activist Petrus

Immofinanz should launch EUR 23.5 cash offer for CA Immo - activist Petrus

The following is a letter sent by London-based activist investor Petrus Advisers to Immofinanz [VIE:IIA] CEO Oliver Schumy and CFO Stefan Schonauer on 14 March 2017:
Dear Sirs,

Following thorough due diligence proving the quality and fair value of their respective real estate portfolios, Petrus Advisers have become significant shareholders in both Immofinanz and CA-Immobilien (“CAI”).

We are shareholders alongside some of the most renowned Austrian industrial families such as Fries, Scherb, Rauch, Schaschl and Gröller as well as the successful real estate investor Ernst Vejdovszky (S-Immo AG) – who all seem to appreciate the bargain Immofinanz’ share price currently offers.

The market evidently does not approve management’s current efforts. Leading London based investors are betting on further share price declines – a situation that is similar to OMV and RBI last summer.

We appreciate that you have started to undertake significant restructuring efforts and are convinced that the planned merger with CAI will be highly value creative. However, both Immofinanz and CAI shares are trading at a significant discount to NAV of 38.7%1 and 17.2%2, respectively. This is due to obvious performance issues:

- Your Russia portfolio has repeatedly delivered negative surprises. A string of write-offs combined with delays of the planned divestiture has unnerved investors.

- Historically low occupancy rates of your office portfolio as well as inefficient cost structures at Immofinanz.

- For years, Immofinanz and CAI have been disposing of properties and consequently, both companies are now overcapitalised compared to peers with LTVs of 47.6% and 33.2%, respectively3 – this represents a drag on profitability.

- The pending merger with CA-Immo is, amongst others, subject to the condition precedent of the sale of the Russia portfolio and consent on the valuation will have to be found. The resulting uncertainty regarding timing and terms has affected the valuation of both companies. We believe this needs to change so that synergies can be reaped promptly and the leadership vacuum at CAI be ended.

We are therefore demanding the prompt implementation of our action plan for value creation at Immofinanz:

1) Russia: Sale of the Russia portfolio at market prices

2) Sale of non-core assets: Swift execution of the communicated non-core divestiture programmes at both Immofinanz and CAI

3) Cash Deal for CAI at Euro 23.5: Takeover offer to all shareholders of CAI at Euro 23.5 followed by conclusion of a profit and loss transfer agreement

4) Share buy-back: Buy-back of Immofinanz shares to offset the dilution from the convertible bond in January 2017

The combined entity will have assets of Euro 8.8 billion with an LTV of 53.9%4 and will be one of the leading European office real estate players. Similar to the RBI and OMV examples – which show a share price performance since last summer of 114% and 54%, respectively5 - it can be expected that short sellers will have to cover their positions; which would contribute to achieving share prices closer to the fair values of Immofinanz and CAI.

Our models show a price range for Immofinanz with an appropriate capital structure of Euro 3.50 to 3.80 and hence the potential for the share price to more than double.

We would be pleased to assist you in any way necessary for a swift implementation, as we believe a fresh start will require full focus now.

FT : Eon to cut 1,300 jobs and sell assets in bid to cut debt by €7bn

Eon to cut 1,300 jobs and sell assets in bid to cut debt by €7bn

German utility makes record loss as it shifts away from fossil fuels and nuclear

Eon, the German utility, recorded a net loss of €16bn for 2016 — the largest in his history — and unveiled ambitious measures to reduce debt by €7bn through asset sales and cutting 1,300 jobs.

The loss reflected impairments on Uniper, the new fossil fuel power company spun out of Eon last year, as well as payments Eon is having to make into a new state fund to cover the cost of disposing and storing Germany’s nuclear waste.

But it said its balance sheet for 2016 will be the “last to reflect the burdens of the past”, leaving the company free to focus on its three core businesses — energy networks, customer solutions and renewables.

“2016 was a transitional year,” said Johannes Teyssen, Eon’s chief executive. The impact on the company’s balance sheet from the Uniper spin-off and the nuclear deal with the government “marks a turning point and clears Eon’s way into the new energy world”, he said.

Eon’s results come less than a month after its rival RWE unveiled a €5.7bn loss for 2016 — the largest in its 119-year history — and said it was scrapping its dividend for the second year in a row.

Eon said its core operating business was healthy, despite the net loss. It said adjusted earnings before interest and taxes stood at €3.1bn, at the upper end of its guidance range. It said it would pay out a dividend of 21 cents per share for 2016, rising to 30 cents for 2017, and said it expected adjusted ebit of between €2.8bn and €3.1bn in 2017.

Eon’s loss reflects the continuing crisis in Germany’s power sector, caused by its radical shift away from nuclear and fossil fuels towards renewables. Cheap solar and wind power have squeezed energy produced from gas and coal out of the market and suppressed electricity prices, making some conventional power stations uneconomic.

The utilities have also been hit hard by Germany’s decision in the wake of the Fukushima disaster to switch off all its nuclear reactors by 2022. Berlin announced last year that nuclear operators would have to pay €23.6bn into a new nuclear waste storage fund — much more than they had provisioned for. 

Eon says it will have to chip in €10bn — €2bn more than expected. It said on Wednesday it could fund this through a capital increase of up to 10 per cent and by issuing hybrid bonds.

Eon and RWE have responded to the crisis in the sector by splitting themselves in two. Eon hived off its fossil fuel power plants into Uniper, which floated on the Frankfurt stock exchange in September. RWE pooled its grid, renewables and retail businesses into a new company, Innogy, which debuted in Frankfurt a month later.

Innogy’s shares have surged this week on a Bloomberg report that Engie of France was eyeing the company.

Eon said it planned to lower its debt from €26.3bn at the end of 2016 to about €20bn. It said options include selling some of its shares in Uniper, in which it still owns a 46.65 per cent stake, transferring its stake in the Nord Stream 1 gas pipeline into a pension fund, divesting non-strategic businesses and issuing a scrip dividend.

The company also said it would lower annual costs by €400m by 2018, resulting in the loss of 1,300 jobs — 1,000 of them in Germany. That, it said, represented about 3 per cent of its current workforce of 43,000 employees. It also said it had reduced its investment budget for the next three years by €2bn to €8bn. 

(Makor) Zodiac : UPDATE FOLLOWING Q2 RESULTS: PRICE CUT NOW AN EVENTUALITY

UPDATE FOLLOWING Q2 RESULTS: PRICE CUT NOW AN EVENTUALITY
Zodiac Q2 trading update published yesterday are likely to be seen as disappointing by the market. The magnitude of the warning will be seen as a threat to the deal in our view by some investors. We think the deal is still on, but the spread is likely to widen significantly short term. TCI comments arguing that ZC is now in breach of covenants, are in our view misplaced and strengthening the thesis that this deal is a rescue with the support of the French government and shall indicate that the deal will go through.
Nevertheless, the risk of seeing a price cut is now a potential scenario, which should weight on the spread. Such a scenario would mean that both the tender terms and merger terms would have to be renegotiated. We will give an update on the modality of such an adjustment later on today once we have consulted with our French legal counsels. The eventually of a price cut in our view strengthens the case for a successful outcome to the transaction as it would repel in a way TCI criticisms of overpaying.
Regarding Safran comments that this warning “are new Developments” we would argue that they are tactical in their nature, following the accusation by TCI Funds that Safran and Zodiac were acting in concert. Such a statement is in our view meant to show that there is no concerted action between the 2 parties when it comes to operations and management, thus silencing TCI remarks in that regard.
We think that Safran is still committed to the deal, and the rescue nature of the transaction is even more clear in our view, hence fully supported by Safran main shareholder the French Government. In that respect, we think the commitment to the deal is very strong, but a price cut is now a very likely scenario.

(Liberation.fr) Renault: cars option pollution included

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From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 03/15/17 07:45:45
Subject: (Liberation.fr) Renault: cars option pollution included

Are we headed for a Renaultgate? Justice suspects the manufacturer of having deceived its customers on the true level of pollution of its diesel engines. "Libération" was able to consult the document at the origin of this investigation, which could cost to the group and its CEO, Carlos Ghosn.

Diesel: the report that accuses Renault
For years, has Renault changed the performance of its engines so that they comply with emission standards ... only during the homologation tests? The question arises, in a lancinante way, reading a document overwhelming the French car manufacturer. This is a report drawn up by the Directorate-General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF), which Libération was able to consult. The Constable de Bercy wrote these 39 pages in November 2016, after several weeks of investigation. It highlights Renault's emissions behavior and is harsh: "Renault SAS deceived consumers about the controls carried out, and in particular the regulatory control of the approval of pollutant emissions [...]. The company used a strategy aimed at distorting the results of antipollution tests. " This piece is now the cornerstone of the judicial inquiry opened by the Paris prosecutor's office on 12 January and entrusted to three examining magistrates Of the Tribunal de Grande Instance, Paris, specializing in attacks on public health.

Test series
Back in the fall of 2015. On the other side of the Atlantic, a laboratory of the University of West Virginia revealed the existence of software embedded clandestinely on some Volkswagen vehicles, triggering the scandal of the dieselgate. It allows to temporarily limit the emission of polluting gases, until the model receives its homologation. The software then deactivates and the car "releases", releasing nitrous oxide responsible for respiratory diseases up to 40 times more NO x in the atmosphere . The US Environmental Protection Agency then decides to sue the German manufacturer.

In Paris, Segolene Royal does not remain dangling arms. The Ministry of the Environment is launching a series of tests on vehicles marketed in France, to see if they are engaged in similar practices. Bercy, who does not want to remain out of play, mandates his armed arm, the DGCCRF, with a specific mission: to look for possible deception. On January 7, a squad of investigators landed without warning at the Renault headquarters in Boulogne-Billancourt (Hauts-de-Seine) and at two research centers, for a search. The officials left with boxes of documents, Prelude to future hearings.

Obviously, the operation is shaking the direction of Renault. At the same time at the Ministry of the Environment, a series of meetings were held between car manufacturers and environmental associations, at the request of Ségolène Royal. Coordinator of the health-environment network at France Nature Environment (FNE), Charlotte Lepitre participated: "Before this operation, the discussions were quite extensive and we got answers to our questions. Afterwards, our interlocutors were much more defensive and our questions remained unanswered. Was there a causal relationship? " A few months later, the DGCCRF minutes provided the answer.

"Fraudulent arrangement"
The document highlights significant discrepancies between the performance of certain Renault engines at the time of their laboratory homologation and their use under actual conditions. That is to say by any driver on the roads of France. In this operation, the Renault Captur (Euro 6 standard) and the Clio IV (Euro 5) take off the pompom. The first exceeds the regulatory threshold for carbon dioxide emissions of 377% and the second of 305%! The investigators' comments are without appeal: "These results make it possible to suspect the installation of a fraudulent device which specifically modifies the operation of the engine, in order to reduce its NO x emissions under specific conditions of the homologation test, so that Emissions are within regulatory limits. " To a lesser extent, the Kadjar and Talisman models also emerge from the nails. Renault is suspected of "calibrating" its engines only to be allowed to circulate. This technique has a name: "preconditioning".

As the accused was in principle doubtful, the differences in emissions of engine pollutants could have been accidental. But several letters seized in the computers of Renault suggest the opposite. A mail exchanged on 25 November 2015 between the Director of Legal Affairs, the Director of Communications and the Head of Institutional Relations concludes: "This depollution system is therefore very quickly inoperative on the road but it works during the tests." For the investigators of the DGCCRF, the burdens are heavy since the analyzes in their possession "attest to the implementation of strategies fraudulent for more than seven years".

The calculation made by Bercy gives dizziness. Nearly 900,000 vehicles could have been marketed thanks to these questionable approvals, which represents 16.8 billion turnover. The icing on the cake: Unlike other large groups that are visibly more exposed to judicial risks, Renault has not put in place delegations of authority to its directors-general. It is therefore the CEO, Carlos Ghosn himself, who finds himself in the front line in the search for responsibilities. As for the Renault house, it faces a 10% fine of its annual turnover, ie 3.5 billion euros.

On February 10, when the results of Renault were presented , Libération asked its CEO whether it planned to provision in the group accounts in the future an amount to face a possible financial penalty. "For what reasons ? We do not know what is being blamed, " Carlos Ghosn said. On Tuesday, Libération again asked the management of the company to respond to the complaints of the DGCCRF. "Renault recalls that none of its services responsible for testing or marketing has infringed the complex technical and legal rules, European or national, concerning the approval of vehicles," the automaker replied by email.

"Deception"
The report of the DGCCRF was sent to the public prosecutor's office in Paris at the end of December. A few days later, a judicial investigation was opened for "deceit on the substantial qualities and the checks carried out". Significance of the file, it is not one but three investigating judges who have been appointed. They immediately reported to the Central Office for Environmental and Public Health (OCLAESP), a 70-gendarme unit that investigated the effects of the Mediator, PIP breast prostheses, and is currently working On Volkswagen engines. He will resume the investigation since the start, "a charge and a defense," according to an official close to the file. New searches, but also hearings of Renault officials are to be expected. Accustomed to the "road shows" that lead them to defend the performance of their company in the financial centers of the world, Renault executives will now have to prepare themselves for a long judicial journey.

(Liberation.fr) Renault : des voitures option pollution incluse



From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 03/15/17 07:43:14
Subject: (Liberation.fr) Renault : des voitures option pollution incluse
Se dirige-t-on vers un Renaultgate ? La justice suspecte le constructeur d’avoir trompé ses clients sur le véritable niveau de pollution de ses moteurs diesels. «Libération» a pu consulter le document à l’origine de cette enquête, qui pourrait coûter cher au groupe et à son PDG, Carlos Ghosn.

Diesel : le rapport qui accuse Renault
Renault a-t-il, pendant des années, modifié les performances de ses moteurs afin qu’ils respectent les normes antipollution… uniquement pendant les tests d’homologation ? La question se pose, de manière lancinante, à la lecture d’un document accablant le constructeur automobile français. Il s’agit d’un procès-verbal (PV) rédigé par la Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF), que Libération a pu consulter. Le gendarme de Bercy a rédigé ces 39 pages en novembre 2016, après plusieurs semaines d’enquête. Il met en lumière le comportement de Renault en matière d’émissions polluantes et se montre sévère : «Renault SAS a trompé les consommateurs sur les contrôles effectués et notamment le contrôle réglementaire de l’homologation sur les émissions de polluants […]. La société a utilisé une stratégie ayant pour objectif de fausser les résultats des tests antipollution.» Cette pièce est aujourd’hui la clé de voûte de l’enquête judiciaire ouverte par le parquet de Paris le 12 janvier et confiée à trois juges d’instruction du tribunal de grande instance de Paris, spécialisés dans les atteintes à la santé publique.

Série de tests
Retour à l’automne 2015. De l’autre côté de l’Atlantique, un laboratoire de l’université de Virginie-Occidentale révèle l’existence d’un logiciel embarqué clandestinement sur certains véhicules Volkswagen, déclenchant le scandale du «dieselgate». Il permet de limiter momentanément l’émission de gaz polluants, le temps que le modèle reçoive son homologation. Le logiciel se désactive ensuite et la voiture se «lâche», libérant dans l’atmosphère jusqu’à 40 fois plus de NOx, un oxyde d’azote responsable de maladies respiratoires. L’Agence américaine de protection de l’environnement décide alors de poursuivre le constructeur allemand.

A Paris, Ségolène Royal ne reste pas les bras ballants. Le ministère de l’Environnement lance une série de tests sur les véhicules commercialisés en France, histoire de voir s’ils s’adonnent à des pratiques similaires. Bercy, qui ne veut pas rester hors jeu, mandate son bras armé, la DGCCRF, avec une mission bien précise : chercher d’éventuels faits de tromperie. Le 7 janvier, une escouade d’enquêteurs débarque, sans prévenir, au siège social de Renault à Boulogne-Billancourt (Hauts-de-Seine) et dans deux centres de recherche, pour une perquisition.Les fonctionnaires repartent avec des cartons de documents, prélude à de futures auditions.

Visiblement, l’opération ébranle la direction de Renault. A la même période au ministère de l’Environnement, a lieu une série de réunions entre des constructeurs automobiles et des associations de défense de l’environnement, sur l’injonction de Ségolène Royal. Coordinatrice du réseau santé-environnement au sein de France Nature Environnement (FNE), Charlotte Lepitre y participe : «Avant cette opération, les discussions étaient assez étendues et nous obtenions des réponses à nos questions. Après, nos interlocuteurs étaient beaucoup plus sur la défensive et nos questions sont demeurées sans réponse. Y a-t-il eu une relation de cause à effet ?» Quelques mois plus tard, le PV de la DGCCRF apporte la réponse.

«Dispositif frauduleux»
Le document fait ressortir des écarts importants entre les performances de certains moteurs Renault au moment de leur homologation en laboratoire et leur utilisation en conditions réelles. C’est-à-dire par n’importe quel conducteur sur les routes de France. Dans cette opération vérité, le Renault Captur (norme Euro 6) et la Clio IV (Euro 5) décrochent le pompon. Le premier dépasse le seuil réglementaire d’émission de dioxyde de carbone de 377 % et la deuxième de 305 % ! Le commentaire des enquêteurs est sans appel : «Ces résultats permettent de soupçonner l’installation d’un dispositif frauduleux qui modifie spécifiquement le fonctionnement du moteur, pour en réduire les émissions de NOx dans des conditions spécifiques du test d’homologation, afin que les émissions respectent les limites réglementaires.» Dans une moindre mesure, les modèles Kadjar et Talisman sortent, eux aussi, des clous. Renault est soupçonné de «calibrer» ses moteurs uniquement pour qu’ils soient autorisés à circuler. Cette technique a un nom : le «préconditionnement».

Le doute bénéficiant en principe à l’accusé, les différences d’émissions de polluants des moteurs auraient pu relever du hasard. Mais plusieurs courriers saisis dans les ordinateurs de Renault suggèrent le contraire. Un mail échangé le 25 novembre 2015 entre la directrice des affaires juridiques, la directrice de la communication et le responsable des relations institutionnelles se conclut ainsi : «Ce système de dépollution est donc très vite inopérant sur la route mais il fonctionne pendant les tests.» Pour les enquêteurs de la DGCCRF, les charges sont lourdes puisque les analyses en leur possession «attestent de la mise en œuvre de stratégies frauduleuses depuis plus de sept ans».

Le calcul effectué par Bercy donne le vertige. Près de 900 000 véhicules auraient pu être commercialisés grâce à ces homologations contestables, ce qui représente 16,8 milliards de chiffre d’affaires. Cerise sur le gâteau : à la différence d’autres grands groupes visiblement plus rompus aux risques judiciaires, Renault n’a pas mis en place de délégations de pouvoirs à ses directeurs généraux. C’est donc le PDG, Carlos Ghosn lui-même, qui se retrouve en première ligne dans la recherche des responsabilités. Quant à la maison Renault, elle risque une amende de 10 % de son chiffre d’affaires annuel, soit 3,5 milliards d’euros.

Le 10 février, lors de la présentation des résultats de Renault, Libération a demandé à son PDG s’il comptait provisionner à l’avenir dans les comptes du groupe une somme pour faire face à une éventuelle sanction financière. «Pour quelles raisons ? Nous ne savons pas ce qui nous est reproché», avait répondu Carlos Ghosn. Ce mardi, Libération a de nouveau demandé à la direction de l’entreprise de réagir aux mises en cause de la DGCCRF. «Renault rappelle qu’aucun de ses services en charge des tests ou de la commercialisation n’a enfreint les règles techniques et juridiques complexes, européennes ou nationales, relatives à l’homologation des véhicules», nous a répondu par mail le constructeur automobile.

«Tromperie»
Le rapport de la DGCCRF a été transmis au parquet de Paris fin décembre. Quelques jours plus tard, une information judiciaire a été ouverte pour «tromperie sur les qualités substantielles et les contrôles effectués». Signe de l’importance du dossier, ce n’est pas un mais trois juges d’instruction qui ont été nommés. Ils ont immédiatement saisi l’Office central de lutte contre les atteintes à l’environnement et à la santé publique (OCLAESP), un service de 70 gendarmes ayant enquêté sur les effets du Mediator, des prothèses mammaires PIP, et qui travaille en ce moment sur les moteurs Volkswagen. Il va reprendre l’enquête depuis le départ, «à charge et à décharge», selon un fonctionnaire très près du dossier. De nouvelles perquisitions, mais aussi des auditions des responsables de Renault sont à attendre. Habitués aux «road shows» qui les amènent à défendre les performances de leur entreprise sur les places financières du monde entier, les dirigeants de Renault vont maintenant devoir se préparer à un long chemin judiciaire.