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Panama Papers : Patrick Drahi cité dans le scandale des sociétés offshores

Les révélations du consortium international des journalistes d'investigation (ICIJ) sur la finance offshore, ont mis en lumière des milliers de personnes ayant eu recours à des sociétés offshores pour dissimuler des actifs. Parmi elles, le patron d'Altice, Patrick Drahi.

La révélation a fait l'effet d'une bombe et fait la une des journaux autour du monde depuis. Ce dimanche 3 avril, Le Monde et 106 autres journaux dans 76 pays ont publié une liste de 140 personnalités qui ont usé de montages offshore mettre leur argent à l'abri des services fiscaux. Le Consortium international des journalistes d'investigation (ICIJ) qui a coordonné l'enquête s'est pour cela appuyé sur 11,5 millions de fichiers d'archives du cabinet panaméen spécialiste de la domiciliation de sociétés offshore Mossack Fonseca (qui dénonce "un crime"). D'où le nom du scandale : "Panama Papers".

Au-delà de ces 140 personnalités (chefs d'Etat, célébrités…) ces documents impliquent plus de 200 000 sociétés écrans et des milliers de personnes dont près de 1000 français. Parmi eux Michel Platini, mais aussi, l'ancien ministre des finances Jérôme Cahuzac, le député-maire de Levallois-Perret Patrick Balkany ainsi que Patrick Drahi, patron d'Altice, la maison mère de l'opérateur français Numericable-SFR. C'est ce qu'affirme la boîte de production Premières Lignes en charge de l'émission "Cash Investigation" sur France 2 qui a participé à l'enquête de l'ICIJ et consacrera son numéro du 5 avril à ce sujet.

We saw Iliad as a play on consolidation while ORA and NUME had upside even if it failed. Our TPs were embodying 70-75% probability of consolidation following the recent bullish comments of the players involved. Scrapping

consolidation benefits from our TPs leaves 5% downside potential for Iliad, which we cut to Hold from Buy, 8% upside for Orange, which we cut to Hold and 29% upside for NUME, a buy on weakness as Q1 is unlikely to be a good

quarter due to high promotional activity from all players. Ytd outperformance vs. sector was +9/+7/+16% for ILD/ORA/NUME.

Orange had set clear conditions that were not met. Bouygues sees four reasons for the failure, of which execution risk and governance (no double vote accorded and no possibility of increasing the stake in ORA for some years, according to Les Echos) are the key ones, while a compromise could have been reached on valuation and employee protection. We highlighted in our January report that paramount to the Regulators’ greenlight was balanced resulting market shares for the three remaining players. With Iliad not taking mobile subs in the deal, we can see why Bouygues saw the execution risk as too high. We wonder if Iliad really wanted consolidation or just to disrupt Bouygues even further. Although Orange and Bouygues declared talks are off for the LT, we kept a 5% probability in our SOP because we still cannot believe that a deal that created value for all the parties involved is not happening after all of the hours of work spent on it.

We trimmed NUME sales -0.6%/-1.5%/-2.1% in 2016/17/18, respectively, and EBITDA -0.9%/-1.9%/-2.5% as we believe it may be tougher to achieve the targeted turnaround with the aggressiveness that may stem from the failed deal. 2015-18 EBITDA CAGR is still 8%.

We remind readers that TPs would be E278/18.9/47 with consolidation (for NUME, based on recent commentary, we conservatively assumed that the small dilution from a potential capital increase would have offset most of the market repair benefits). We use DCF-based SOTP to derive our target prices, with WACCs ranging from 7% to 13.1% (Orange’s African assets) and g from 0% to 5%. See details in the note. Upside risks: consolidation talks resumed. Downside: 1) M&A destroying value, 2) Orange/Iliad potential buyers in cross-border mergers.

* Banks’ relative PE is lower than at any point during the GFC and the relative PBV is close to all-time lows.

* Capital Goods appears overbought with an RSI of 74, but earnings revisions have been strong.

* 88% of Energy stocks have outperformed in the last 3M and relative price trends have significantly outperformed relative earnings.

* Telecomms have only been more expensive 4% of the time in the last 10Y.

* Banks’ relative PE is lower than at any point during the GFC and the relative PBV is close to all-time lows.

* Capital Goods appears overbought with an RSI of 74, but earnings revisions have been strong.

* 88% of Energy stocks have outperformed in the last 3M and relative price trends have significantly outperformed relative earnings.

* Telecomms have only been more expensive 4% of the time in the last 10Y.

Last year, while Stoxx Europe 600 earnings dropped c.2%, Euro area GDP grew a decent 1.5% (above trend). We investigate the dichotomy between the European equity market and the economy and find three key areas of substantial divergence: (1) sector and country composition, (2) international exposure, and (3) sector deflationary forces. We believe that a change in the deflationary narrative (a stabilisation in the oil price) and improvement in Financials would narrow the gap between the two spheres.

2016 EPS estimates have been revised down 8% year-to-date and marketimplied EPS growth by our DDM is negative. In the meantime, our economists expect 1.4% GDP growth in the Euro area in 2016 – this figure is above trend, and comes after a reasonably good outturn last year too.

Should the composition of the equity market be equivalent to that of the economy, SXXP earnings would have grown c.5% in 2015 rather than actually declining 2%. Financials is four times larger in the equity market, Oil & Gas represents 5% of the equity market vs. 1% of the economy, and UK equities are almost twice the size of German equities.

While the equity market has 40% international sales exposure (6% to China), the Euro area economy is mainly domestic, with only 1% exposure to China (% of GDP).

Our reconstructed price index, reflecting the sector composition of the European equity market, is much more subdued than actual Euro area CPI.