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Market Update

Activist Targets Nestle, Two Bank Bail Out in Italy Costs €17 Billion

Author: Sarla Buch
Last Update: 11:11 AM ET June 26 2017

4:00 PM Frankfurt – Banco Bpm plans to sell up to €6 billion in non-performing loans. Russian billionaire agreed to acquire Holland & Barrett for £1.8 billion. Italy rescued Intesa for €17 billion. Third Point acquired a major stake for $3.5 billion in Nestle.

In London trading, FTSE 100 index jumped 50.73 or 0.7% to 7,474.32 and in Frankfurt the DAX index increased 74.97 or 0.6% to 12,808.61.

In Paris, CAC 40 index advanced 51.20 or 0.9% to 5,317.64.

Allianz SE gained 0.7% to €175.20 after Germany-based financial and insurance services provider estimated to book a loss of about €200 million or $224 million from the sale of private bank Oldenburgische Landesbank to the U.S.-based private equity firm Apollo Global Management LLC.

On June 23, the insurer agreed to sell its entire 90.2% stake in Oldenburgische Landesbank AG in the bank for €300 million or $336 million.

Banco Bpm SpA, jumped 3.8% to €2.80 after Italy-based banking services provider’s chief executive officer Giuseppe Castagna said to Corriere della Sera''s L''Economia that the bank may sell €5 billion to €6 billion in non-performing loans in addition to the announced €8 billion with the European Central Bank.

Holland & Barrett Retail Limited, the U.K.-based privately held health food and supplements chain agreed to be acquired by the Russia-based billionaire Mikhail Fridman''s fund L1 Retail for £1.8 billion or $2.3 billion.

Carlyle Group acquired the retailer and Nature’s Bounty in a $3.8 billion transaction in 2010. Carlyle has been looking to sell retailers Nature’s Bounty and Holland & Barrett separately.

Intesa Sanpaolo SpA jumped 4.4% to €2.73 after Italy-based banking and financial services provider today signed a contract to acquire Banca Popolare di Vicenza SpA and Veneto Banca SpA.

The Italian government agreed to pay €5.2 billion to Intesa and also agreed to guarantee up to additional €12 billion to close two failed regional banks.

The emergency deal crafted over the weekend was approved by the European Commission and will cost the Italian government up to €17 billion or $19 billion.

""Those who criticize us should say what a better alternative would have been. I can''t see it,"" Economy Minister Pier Carlo Padoan said.

Nestle SA advanced 4% to 85.40 Swiss francs after Reuters said that the activist investor Daniel Loeb’s Third Point LLC hedge fund acquired a stake of 1.25% or $3.5 billion in the Switzerland-based food product maker to find the ways to accelerate growth through buy back stock and selloff non-core businesses.

""It is rare to find business of Nestle''s quality with so many avenues for improvement,"" Third Point said in a letter to investors.

Pirelli & C SpA, the Italy-based national daily newspaper Il Sole 24 Ore said that the tire manufacturer is preparing for return on to Milan stock exchange in the fourth-quarter of the this year.

The news report said that the tire maker is close to refinancing bank loan of €4.2 billion and restructure its balance sheet.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc