(Exane) Will Fillon be the French Thatcher ?

Now comes the difficult part
François Fillon’s victory in the right primary shows many French voters reject populism and desire wide-ranging reforms. But now comes the difficult part: 1) being elected in the Presidential election next spring against the Front National and possibly several centrist candidates and, 2) implementing the reforms proposed during the campaign.
The Le Pen risk is higher than with Juppé
We continue to believe that the risk of Marine Le Pen being elected President next year is low (c.10%). There remains a majority of French people united against the Front National in major elections. However, the risk is higher with François Fillon than with Alain Juppé given the former’s more radical agenda, which is likely to scare some centrists, not to mention left-wing voters.
Would Fillon then deliver as President?
Fillon’s public savings programme looks too ambitious to be realised in five years, in our view, and poor social cohesion and low market pressure could slow reforms. But, if elected, Fillon would have a real mandate for reform and his referendum on a unique social regime could help break union opposition. All told, the French elections could be the positive surprise of 2017.
Investment ideas – Consequences of a Fillon Presidency
Fillon’s tax cuts could give a short-term boost to the economy and French corporate profits could rise by c.23%. His plan would be more negative for consumers due to the VAT hike. In our mid-cap universe, our analysts believe his policies could benefit Korian (+), Orpea (+) and Lisi (+) and should be neutral / slightly positive for property developers such as Nexity (=) and Kaufman & Broad (+). We also assess the possible impact on staffing, utilities and defence names.

NY Post : Luxury retailers take steps to increase online presence

It’s no secret that luxury retailers are behind the times when it comes to e-commerce.
Chanel lets you purchase its fragrances, beauty products and sunglasses online — but not its handbags. Hermès allows you to purchase some bags and other items on its Web site — but not its signature Birkin and Kelly bags. Celine lets you view its goods online, but you can’t purchase any of them that way.

But now these companies are taking steps to be more Web-friendly, The Post has learned.

Celine, the French luxury ready-to-wear and leather goods brand, recently began including its prices online though you still can’t buy anything.

A spokeswoman declined to comment on the development, but store employees confirmed that Celine updated its Web site, adding prices for the first time.

Chanel also revamped its Web site.

“Since October, prices listed on Chanel.com are given in the local currency depending on the geographical location,” the company said in a statement to The Post, adding, “The user now has access to the prices applicable to the country where he/she is.”

But the company declined to discuss the reason for this change.

A store employee offered that Chanel “just went through a globalization of the brand because it was running into problems” with different prices in different countries.

“It’s been a big adjustment for the brand,” said the employee.

These retailers are “slowly succumbing to the fact that you have to be accessible online,” said Gabriella Santaniello, founder of A Line Partners, a retail research firm. “They are very late to e-commerce, but some of it is by design because limiting their products online is a way of controlling their brand.”

(MS) 2017 Global Macro Outlook : Faster Reflation, Fatter Tails

The global recovery is likely to gain more momentum in 2017 on the back of faster US growth, stable DM growth and rebounding EM momentum. While growth becomes more balanced, material risks emanate from late-cycle fiscal stimulus, faster Fed rate hikes and a broad globalisation backlash.

Bull-bear scenarios – mapping out higher risks, fatter tails: The 2017 outlook is subject to material uncertainty, not least due to a new US administration taking office, key ballots in Europe and the formal start of Brexit. The fatter tails of the distribution of macro outcomes will make for an interesting and intense macro debate. More than
ever, we will rely on our bull-bear scenarios.

(GS) Vallourec : A muted recovery story; reinstate at Neutral

We remove the Not Rated designation from Vallourec’s shares and reinstate with a Neutral rating, as we see better risk-reward elsewhere. We believe the risk-reward potential for the European oil services sector looks skewed to the upside in the near term should an agreement be announced and implemented at the November 30 OPEC meeting. However, the
medium-term picture for the industry continues to look deflationary, capping any price increases in the OCTG market in which Vallourec operates.

Valuation
Our 12-month price target of €4.5 is based on a target EV/EBITDA multiple of 10.5x (a 27% premium to the historical 2006-14 average of 8.3x) applied to our 2018 estimates.

Key risks
(1) Higher/lower oil prices than expected (Vallourec’s share price has historically been tightly correlated to oil price movements) 
(2) a better/worse-than-expected OCTG price recovery, (3) higher/lower-thanexpected plant utilisation levels and (4) balance sheet constraints.

>>> Pre-Market Indications

MF
*LVMH-Biver says '17 will be better for watchmakers,bottom reached.......+1% *SWATCH-Outlook positive for end-2016 and 2017 says CEO..................+1% *EON-Arms itself against potential hostile attack-Spiegel................+0.25%
*BMW-Raises Venture Capital Unit to €500m vs €100m(i Ventures)...........U/C *ENGIE-Expects to complete €15b divestment plan ahead of deadline........+1% *YOOX-Signs jv with Alabbar to sell Net-a-Porter in Mideast..............+1%
*ARYZTA-Q1 Rev 962.3m(974),FY17 finance rage 80-90m,o/l unch.............-2% *MAERSK-With Dong Energy hire advisers for Oil Unit Merger-S/Times.......+1% *SIEMENS-Wants younger managers,foregoing some margin 4 jobs.............U/C *NOVARTIS-Sandoz is looking for acq's but will not buy Amneal............U/C *ACTELION-FAZ says J&J could bid CHF250 a share,bidding war ?............+2% *DEUT POST-CEO sees 10% increase in holiday deliveries,8m a day..........+0.5% *LHA-More strikes Tues/Weds also talks over insolvency plan..............-1.5% *OSRAM-Siemens doesn't see its 17.5% stake as strategic anymore..........-0.5% *STABILUS-Rev 206.5m(204),Ebit 29.1m(28.3),Margin 14.1%(13.9),o/l lite...unch

CS
Aberdeen +2-3% Op Prof £328m cons £313m, AuM ahead, outflows lower
Aryzta -2% Sales €962.3m vs cons €973.4m, confirm FY guidance
Banco Pop -2% CS reiterate UNDERPERFORM (Over exposure to property)
Cap & Count UNCH On course to achieve its ERV target of £100 million
Engie +1% Plans to complete E15bn divestments ahead of schedule, CEO
Galenica +3-5% FDA removes warning for Veltassa (potassium removal drug)
Ladbrokes M/P Could bid for Tabcorp Holdings Ltd, Mail on Sunday
Miners -1% Copper +2.00%, Brent -1.20%, Iron Ore +1.80%, China +0.50%
RBS -1-2% May struggle to sell all of Williams & Glynn, S. Telegraph
Umicore M/P Completes sale of zinc units to U.S. private equity firm

ML
ICADE - CMD. Revise '16 guide upwards, expect EPS +7-8% v over +3% (65).....+3% 
ABERDEEN - EPS 20.7 beat v cons 19.3p but mainly on one-off FX gains (294)+2-3% 
CAPCO - Remain on track for £100m ERV at Covent Garden by end 2017 (270p)...+2% 
ANTO - Sell Michilla mine to a local mining co for $52m & copper +2% (730)..+1% 
TEF - In talks to sell a stake in its infrastructure biz; Economista (8)....+1% 
ENGIE - Expects to complete E15bn divestment plan ahead of '18 deadline (12)+1% 
WIRECARD - Small positive. Launch of open loop prepaid card in India (43)...+1% 
BATS - BUY. Inflection points could support potential TSR of 100% (44.5)....+1% 
NATIONAL GRID - UK ministers back off threats to break up the co (928p)...+0.5% 
DONG - Hire advisors to start work on merger of oil ops with Maersk (243)...u/c 
MINERS - Copper +2%, Iron Ore +1.4% with BHP OZ -2.6% and RIO OZ -1.1%......u/c 
LVMH - Said to be in talks to buy cyclewear co Rapha: Mail on Sunday (169)..u/c 
MAERSK - Hire advisors to start work on merger of oil ops with Dong (9230)..u/c 
ENI - Agree to sell 10% stake in their Egypitan Gas block holding (12.77)...u/c 
ITALIAN BANKS - Up to 8 banks risk failing if Renzi loses ref; FT reports.-0.5% 
INGENICO - -ve.Verifone announces expansion of Worldpay partnership (72.8)-0.5% LADBROKES - Spec weighs up bid for Australian betting giant Tabcorp (124.5).-1% 
LUFTHANSA - Woes continue. Pilots to strike again on Tues & Weds (12.48)....-1%

>>> What to look at today - 28th of November 2016

Friday Close : Dow +0.36% S&P+0.39% Nasdaq +0.34% Russell +0.38% BEst Sector : Conglomerates Worst : Basic Materials
JPY leads in an active FX session as USD falls across the board amid growing uncertainty going into Wednesday OPEC meeting and Sunday referendum in Italy and elections in Austria; US presidential transition wrinkled by potential Clinton challenge of polls in battleground states. Fillon victorious in France center-right primaries; Juppe concedes. Crude oil falls as much as 2% on reports Saudi energy min no longer sees the need for production cuts ahead of Wednesday meeting in Vienna; Ministers to hold preliminary talks in Russia on Monday.

Nikkei -0.13% Hang Seng +0.94% CSI +0.60% Shanghai +0.64%

Eur$ 1.0643 CNH 6.9233 CNY 6.9027 JPY 112.04 GBP 1.2498 CHF 1.0102 RUB 64.7462 WTI$ 45.95 -0.26%

S&P -0.20% EuroStoxx +0.13% FTSE +0.02% Dax -0.10% SMI +0.06%

Macro :
- Even If OPEC Gets a Deal, It Risks Reviving Battered Oil Rivals
- Carney in Talks on ‘Brexit Buffer’ for U.K. Companies: S. Times
- Russia Says OPEC Needs Internal Consensus Before It Joins Deal
- EU Commission Accelerates Fight Against Online Tax Fraud: Welt
- Japan PM Abe's Council on Economic and Fiscal Policy approves budget guidelines, targeting spending of ¥97T for FY17/18, up form ¥96.7T in FY16/17 - Nikkei - Social security spending said to account for much of the increase, rising about ¥500B
- IMF Indecision on Bailout Criticized by Greek Economy Minister
- Spain Govt to Approve 2017 Spending Cap of About EU118b: EP

Keep an eye on :
- AIR FP : WTO May Rule Boeing Received Illegal Subsidy on Jetliner: WSJ
- ALO FP : French Industry Secretary to Meet Alstom CEO on Belfort Center
- AAL LN : Anglo American Los Bronces Mine Occupied: Co. Statement
- ALO FP : Alstom Requested Additional Information From Renfe About Tender
- ARYN VX : Aryzta 1Q Total Revenue Declines 3.3%; EPS Outlook Unchanged
- BARC LN : Barclays to Revamp Stockbrokers, Rename as Direct Investing: FT
- BPE IM : Popolare Emilia Approves Transformation Into Joint-Stock Company
- BMPS IM : Qatar Fund Cuts Possible Paschi Investment to EU750m: Repubblica
- BMW GY : BMW Raises Venture Capital Unit to EU500m: Handelsblatt
- BARN SW : Barry Callebaut CEO Wants to Make Sustainability Norm: Blick
- BWO NO : BW Offshore 3Q Net Loss Widens; To Carry Out Reverse Share Split
- COB LN : Cobham directors accused of unlawfully transferring cash - FT
- DBK GY : Deutsche Bank Owes Over EU30m in Bonuses to Ex-Managers: Welt
- DPW GY : Deutsche Post CEO Sees 10% Increase in Holiday Deliveries: BamS
- DTE GY : Deutsche Telekom Network Down in Parts of Germany
- DNLM LN : Dunelm Said to Be in Talks to Buy Retailer WorldStores: Sky
- EDF FP : France’s EDF, Veolia Interested in Bulgarian Nuclear Plant: Trud
- EMS SW : EMS CEO May Move Activity Abroad If Corp. Tax Reform Fails: SZ
- ENGI FP : Odebrecht Sells Project in Peru to Brookfield Asset, Suez: Valor
- EOAN GY : E.ON appoints team to fend off hostile takeover attempts
- EOAN GY : EON Risks Priced In, RWE Continues to Face Uncertainty: HSBC
- IFX GY : Infineon has not been approached by potential bidders from China999
- LCL LN : Ladbrokes Planning Bid for Australia’s Tabcorp: Mail on Sunday
- LSE LN : CME Group Tables Bid for LSE’s Clearing Ops in France: S. Times
- LHA GY : Pilots Discussed Lufthansa Strike Extension Until Nov. 30: Bild
- LHA GY : Lufthansa Pilots Plan to Strike Again on Tuesday, Wednesday
- MC FP : LVMH’s Biver Says 2017 Will Be Better for Watchmakers: SZ
- MC FP : LVMH Said to Be in Talks to Buy Cyclewear Company Rapha: Mail
- MBWS FP : Marie Brizard Unit Gets Coca-Cola Poland Distribution Contract
- MAERSKB DC : Maersk, Dong Hire Advisers for Oil Unit Merger: Sunday Times
- MHG NO : Marine Harvest May Get 4 Development Licenses for Egg Concept
- MRK GY : Merck to Close Several Sites After Sigma-Aldrich Purchase: FAZ
- NG/ LN : National Grid to be spared from break-up - FT
- NOVN VX : Novartis Unit Sandoz Is Looking for Acquisition Target: SZ
- PLND LN : U.K.’s Poundland to Close as Many as 80 Stores: Telegraph
- RBS LN : RBS May Struggle to Sell All of Williams & Glyn: S. Telegraph
- RDSA NA : Shell Won’t Return to Alaska for Exploration, CEO Tells Dagblad
- SAN FP : Bozzetto attracts interest of Sanofi - Il Sole 24 Ore
- STM GY : Stabilus Full-Year Ebit Margin Rises, Sees 2017 Sales Increase
- TEF SM : Telefonica Negotiating Partial Sale of Telxius: El Economista
- FP FP : Capital increase reserved to employees. Total plans to offer 18 million shares with a nominal value of €2.50 each, representing a total nominal amount of €45 million, which is the equivalent of 0.7% of the Company's share capital as of October 31, 2016. Employees held 4.9% of the Company's share capital as of December 31, 2015.
- UCG IM : UniCredit Still Underweight at Barclays Ahead of Dec. 13 CMD
- VER AV : Verbund open to acquisitions in Germany
- VIE FP : Veolia Fires Water Executive and Auditor, Echos Says

>>> Europe : Brokers Upgrades & Downgrades - 28th of November 20

>>> Up
*ASOS Raised to Buy at Goldman, PT 6200p
*CNH Industrial Raised to Neutral at Piper Jaffray, PT $8
*EON Raised to Hold at HSBC, PT EU6
*Husqvarna Raised to Hold at Nordea Securities, PT SEK70
*Inwido Raised to Hold at Nordea Securities, PT SEK97
*Italgas Rated New Hold at Jefferies, PT EU3.40
*Meyer Burger Technology Raised to Neutral at Citi, PT CHF1.90
*Ophir Energy Raised to Outperform at Macquarie
*Prologis Raised to Outperform at Baird, PT $55
*Terna Raised to Buy at Jefferies, PT EU4.50
*TGS Raised to Neutral at UBS, PT NOK170

>>> Down
*CNH Industrial Cut to Neutral at MedioBanca, PT EU8.70
*Europris Cut to Neutral at Goldman, PT NOK40
*Heijmans Cut to Hold at Kepler Cheuvreux, PT EU5.50
*Man Group Cut to Neutral at Exane, PT 120p
*Pets at Home Cut to Neutral at Goldman, PT 235p
*RWE Cut to Reduce at HSBC, PT EU10.50
*Snam Cut to Hold at Jefferies, PT EU3.70

>>> PT Change


>>> Initiation
*ADLER Real Estate Rated New Hold at Jefferies, PT EU14
*ADO Properties Rated New Buy at Jefferies, PT EU38
*Deutsche Wohnen Rated New Buy at Jefferies, PT EU35
*Freenet Rated New Underweight at Barclays, PT EU23
*Grand City Properties Rated New Buy at Jefferies, PT EU19
*LEG Immobilien Rated New Buy at Jefferies, PT EU84
*Multiconsult Rated New Buy at Nordea Securities, PT NOK130
*Restaurant Group Rated New Reduce at HSBC, PT GBP2.90
*RWE Reinstated Hold at Deutsche Bank, PT EU12
*TAG Immobilien Rated New Hold at Jefferies, PT EU12
*Tele Columbus Rated New Overweight at Barclays, PT EU9.20
*Thule Rated New Neutral at UBS, PT SEK130
*Uniper Rated New Hold at Deutsche Bank, PT EU12.50
*United Internet Rated New Equal-Weight at Barclays, PT EU37
*Vallourec Reinstated Neutral at Goldman, PT EU4.50
*Vonovia Rated New Hold at Jefferies, PT EU32

>>> Call
>> Sector
*EUROPE INSURANCE UPPED TO IN-LINE VS CAUTIOUS AT MORGAN STANLEY

>>> Asian Update

Asia Mid-Session Market Update: China Industrial Profit growth accelerates; Oil prices fall as Saudi min talks down need for output cut; US holiday spending up low double-digits

***Friday US markets on close: Dow +0.4%, S&P500 +0.4%, Nasdaq +0.3%***
- At the close: VIX 12.3 (-0.1pts); Treasuries: 2-yr 1.12% (flat), 10-yr 2.37% (+2bps), 30-yr 3.02% (flat)
- Best Sector in S&P500: Conglomerates
- Worst Sector in S&P500: Basic Materials

***Weekend US Corporate Headlines***
- BA: WTO expected to find Boeing has received illegal state subsidies for its 777X - financial press
- UTX: Said to hold talks with incoming administration of Pres-elect Trump about preserving US jobs and potential tax overhaul discussed by Republican leadership - press

***Politics***
- (US) Clinton campaign says it will join efforts by the Green Party to push for recounts in some battleground states that had close margins of victory for Trump
- (FR) Alain Juppe concedes defeat in French presidential center-right primary; Fillon wins with estimated 68.2% of the vote
- (IT) Italy PM Renzi: Referendum measure to reduce the number of Senate members by 2/3rd (from over 300 to 100) is not to curb democracy but rather reduce bureaucracy - CBS 60 Minutes interview
- (KR) Hundreds of thousands of people marched in Seoul, demanding that Pres Park steps down as the leader of South Korea - press

***Asia Session Notable Observations, Speakers and Press***
- JPY leads in an active FX session as USD falls across the board amid growing uncertainty going into Wednesday OPEC meeting and Sunday referendum in Italy and elections in Austria; US presidential transition wrinkled by potential Clinton challenge of polls in battleground states.
- According to Adobe, Black Friday and Thanksgiving Day shopping totaled $5.27B, +17.7% y/y; Separately, comScore saw 25-days of US holiday spending up 12% at $24.5B.
- Fillon victorious in France center-right primaries; Juppe concedes.
- Crude oil falls as much as 2% on reports Saudi energy min no longer sees the need for production cuts ahead of Wednesday meeting in Vienna; Ministers to hold preliminary talks in Russia on Monday.
- China Industrial Profit growth rises; NBS notes structure of growth not ideal as profit of raw material production increased while tech and equipment profit growth slowed.
- BOE Gov Carney floated a buffer period for companies as part of Brexit process negotiations; Rejected by Brexit leaders.

Energy:
- OPEC attempting last-ditch effort to secure agreement for production cut even as Saudi Arabia is now suggesting reduction of output is not needed; Ministers are flying to Russia for talks ahead of the meeting in Vienna this Wednesday.

China:
- (CN) PBoC Deputy Gov Yi Gang: yuan still a strong currency, should stabilize - financial press
- (CN) Moody's: Outlook for China's residential property market in 2017 is stable
- (CN) China should raise fiscal deficit to 3.5% from 3.0% and rely more on fiscal policy in 2017 - Chinese press op/ed
- (CN) JZ Securities chief economist: PBOC has effectively engineered a 25bp rate increase through the use of money market operations - press
- (CN) Societe Generale SAs chief China economist: China's "gyration of bubbles" has been heating up the commodities market - press

Japan:
- (JP) Japan PM Abe's Council on Economic and Fiscal Policy approves budget guidelines, targeting spending of ¥97T for FY17/18, up form ¥96.7T in FY16/17 - Nikkei
- (JP) Japan PM Abe: Free trade is at a crossroads, want to keep pushing TPP

Australia:
- (AU) JPMorgan: Australia quarterly CAPEX data due out this week will not be as dire as in recent surveys - press
- (AU) Australia Treasurer Morrison: No plans to take advice from former PM Abbott and his budget measures, including a A$7 Medicare co-payment and deregulation of all university fees - AFR

***Asian Equity Markets/Futures (23:30ET)***
- Nikkei225 -0.4%, S&P/ASX -0.6%, Kospi +0.4%, Shanghai Composite +0.5%, Hang Seng +0.7%
- Equity Futures: S&P500 -0.2%, Dax -0.2%, FTSE100 -0.1%

***FX ranges/Commodities/Fixed Income (23:30ET):***
- EUR 1.0595-1.0685; JPY 111.40-113.00; AUD 0.7430-0.7480; NZD 0.7030-0.7090
- Dec gold +1.2% at $1,192/oz, Jan crude oil -0.5% at $45.85/brl, Mar copper +0.4% at $2.69/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 6.6 tonnes to 885.0 tonnes; 11th straight decline; lowest since June 8th
- SLV: iShares Silver Trust ETF daily holdings fall to 10,766 tonnes from 10,796 tonnes prior; 6th straight decline; lowest since July 12th
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.9042 V 6.9168 PRIOR
- (JP) BOJ offers to buy ¥410B in 5-10yr JGBs, ¥190B in 10-25yr, ¥110B in JGBs with maturity over 25-yr, and ¥25B in inflation-indexed JGBs
- (KR) South Korea sells 3-yr Govt bonds at 1.773%
- (KR) BOK sells KRW300B in 3-month bills at 1.5%

***Key economic data:***
- (CN) CHINA OCT INDUSTRIAL PROFITS Y/Y: 9.8% V 7.7% PRIOR; YTD: 8.6% V 8.4% PRIOR
- (TH) Thailand Oct Customs Trade Balance: $0.25B v $1.9Be

***Asia movers***
- Western Areas WSA.AU: Enters into a 3-yr offtake contract with Tsingshan Group; +5.1%
- Metcash MTS.AU: Reports H1 Underlying Net A$82.8M v A$84Me, EBIT A$128M v A$135Me; Rev A$6.63B v A$6.7Be; +4.3%
- IOOF Holdings IFL.AU: Perpetual may have revised interest in potential takeover of IOOF Holdings - Australian; +4.1%
- Regis Resources RRL.AU: Goldman Sachs Raised RRL.AU to Neutral from Sell; +2.9%
- Tabcorp TAH.AU: Ladbrokes Coral said to be interested in making an offer for Tabcorp; offer expected to be a mix of cash and shares - UK press; +1.9%
- Canon 7751.JP: CLSA Raised CAJ to Outperform from Underperform; +1.6%
- ANZ.AU: In advanced talks with HNA Group to its divest UDC financing business , valued around A$550M - AFR; -1.3%
- Amcor AMC.AU: Credit Suisse Cuts AMC.AU to Neutral from Outperform; -4.1%
- Alco Holdings 328.HK: Reports H1 Net profit HK$46.2M v HK$71.1M y/y, Op profit HK$49.8M v HK$69.4M y/y, Rev HK$931M v HK$1.38B y/y; -13.9%

FT : Cobham directors accused of unlawfully transferring cash

Cobham directors accused of unlawfully transferring cash
Claim by insolvency litigator alleges move left defence group’s subsidiary unable to pay creditors

Millions of pounds in cash was unlawfully transferred from one subsidiary of Cobhamto another, leaving the defence equipment company’s mobile technology unit unable to pay creditors, it is alleged.

Two former directors of MMI Research, a subsidiary of Cobham, have been accused of breaching their fiduciary duties by paying £2.3m in dividends to another Cobham company, leaving it little more than an empty shell.
The claim, brought by insolvency litigator Manolete Partners, alleges that this was done despite the fact that MMI faced a court order to pay costs after losing a legal battle over patent infringement, and unrelated claims from HMRC for more than £1m.
Manolete, which says it is one of the UK’s largest insolvency litigators, acquired the claim from a liquidator at Begbies Traynor in March after a two-year pursuit by creditors to reclaim assets and costs of £1.7m.
The Manolete claim, filed with the High Court last month, alleges that the directors “did not reserve any funds for the liabilities owed to creditors … although they knew or ought to have known that MMI was liable to those creditors for litigation costs and outstanding tax”.
The events are alleged to have taken place between 2012 and 2013, when Cobham, like many defence companies, was under pressure from falling military spending in the US. The group has warned on profits three times in the past year and has changed its chief executive. Last week its chairman, John Devaney, stepped down.
MMI’s alleged liabilities stemmed from a long legal battle with another mobile monitoring company, Cellxion, which began two years before it was acquired by Cobham and when it was owned by property entrepreneur Mark Slatter. MMI twice won its case for infringement of a patent on technology that identifies and intercepts mobile phones, but finally lost to Cellxion’s appeal in 2012.
According to the filing by Manolete, emails were then sent by MMI’s lawyer to directors Stephen Beeching and Christopher Jewell, as well as Cobham’s then vice-president for legal and compliance issues, Mark Thomas, stating that the costs remained to be decided.
Cobham executives were also allegedly advised that they should defer a long-planned transfer of MMI’s assets to a sister company, pending the decision. Nevertheless, in March 2012 assets were transferred and a dividend of £2.3m was paid by MMI to Lockman, another Cobham subsidiary, before the court had fully quantified costs, it is alleged.
MMI, now devoid of assets, was then sold to its previous owner Mr Slatter. Manolete claims that MMI’s parent had made a proposal to pay all liabilities before transferring the company to Mr Slatter. Cobham was also in dispute with the entrepreneur over issues related to its original acquisition of MMI and recovery of costs associated with the Cellxion litigation, the claim alleges. When the final £434,432 costs ordered by the court were not forthcoming, Cellxion petitioned to wind up MMI and a liquidator was appointed.
Manolete is now seeking the restoration of £2.3m plus interest from the directors.
Cobham declined to comment. Neither Mr Beeching nor Mr Jewell, who has since left the company, could be reached for comment. Nor could Mr Slatter be reached for comment. No defence has yet been filed.