LSE-Deutsche Börse: Winter is here!

 Will the deal survive post-Brexit?

We have all heard executives at both companies tout the benefits of this marriage: creating a global derivatives powerhouse to rival the Intercontinental Exchange (ICE) and CME Group; becoming a leader in post-trade services, and of course a pioneer in market data as the combined entity would own the FTSE Russel, STOXX, and DAX indices.

However, the question on everybody’s mind remains: how will the UK’s historic vote to leave the EU weigh in on the deal? The risks are nothing short of real as executives reiterated ad nauseam in the days following the referendum that the deal will continue as planned. We are not so sure.

DSW to enforce special audit at Volkswagen by court decision

Despite heated debates at the general meeting of Volkswagen, voting results did not come as a surprise.

The company’s major shareholders, Porsche Automobil Holding SE (controlled by the Porsche/Piech family) , the government of Lower Saxony,  and Qatar Holding LLC ( private equity arm of Qatar Investment Authority), which collectively hold around 90% of the company’s voting rights voted against DSW’s resolutions to appoint an independent special auditor.

Shareholders brace themselves for ‘Dieselgate’ at Volkswagen (VW)

 It all started with a group of five scientists at the University of West Virginia. During live road tests, these scientists discovered that emissions from certain VW diesel engines exceeded limits set by the US Environmental Protection Agency (EPA). A larger probe by the EPA and the California Air Resources Board (CARB) corroborated these findings and found that VW had intentionally programmed its diesel engines to reduce nitrogen oxide levels during emissions testing in order to meet US standards. The ensuing scandal, made worse by the fact that the company shirked its responsibility to shareholders and intentionally hid these findings from the public for almost a year, culminated with the collapse in the share price and the resignation of Martin Winterkorn, its CEO and Ferdinand K. Piëch, its Chairman.   

More troublingly, the automaker reneged on its previous promise to release the finding of an investigative report surrounding the scandal by law firm Jones Day in April 2016 citing ‘unacceptable risks’ that may ‘jeopardize’ its ongoing negotiations with the US Department of Justice (DOJ), EPA, CARB, and Attorneys General from fifty US states.

Sir Martin Sorrel draws shareholder ire

Shareholder revolts taking the 2016 AGM season by storm in the UK do not seem to be losing any steam.

In what is building up to be an unusual season of anger over executive compensation, shareholders have rejected remuneration packages at BP (59%), Smith & Nephew (53%), and Weir (72%; pay policy) and mounted serious challenges at Shire (49%), Anglo American (42%), Reckitt Benckiser (42%), Ladbrokes (42%), CRH (40%), and Man Group (37%). WPP joined the fray yesterday where 33.5% of shareholders outraged by Sir Martin Sorrel’s ballooning pay voted against the remuneration report.


Will Carlos Ghosn for ever stay entrenched at Renault and at Nissan ?


Renault SA presents to the vote on April 29th. in resolutions 5 and 6 two related party agreements, one with its first shareholder the French State and the other one with its listed Japanese giant subsidiary Nissan Motors.  This so called  ‘stabilization agreement’  follows the adoption of a double voting right provision last year imposed by the French State and it includes an unexpected revision of the original balance of power between Renault and Nissan Motors. While this situation was foreseen by observers, for Proxinvest, this unneeded change is actually a “coup d’état” by Carlos Ghosn, the Chairman & CEO of two listed and integrated groups, arranged with the complacency of the Renault directors and insuring him a perfectly entrenched position as perpetual tycoon. For the record, under the 1999 agreement, Renault owns 43.44% of Nissan while Nissan owns 15% of Renault but has no voting rights. The French government has been since 1945  the largest shareholder , holding at the time of the alliance with Nissan  44% of Renault’s capital and now only 19.74%,  but since the  Florange law 23.56% of the voting rights.

French Yellow Pages (SOLOCAL) individual shareholders put company under pressure

 In a unique case of general investors mobilisation the individual holders of Solocal Group, a specialist of local advertising, recovering from the KKR led LBO on the  telephone register business of France Telecom, will possibly force the company management but also the French Government and the AMF to act and better protect the minority holders.


Some 602  individual holders of Solocal Group (formerly the Yellow Pages)  have regrouped to face an explainable drop in the share price  which reached 3.50 euros in late February at the bottom of a descent into hell that lasts for years. This trend followed the leveraged acquisition of the France Telecom subsidiary by financiers clustered around the famous American fund KKR for three billion euros. Proxinvest had then bought in 2005 at a price of € 18.82 before regrouping of the shares, i.e.teh equivalent of  € 564 a share which  traded at € 3.60 at the end of February 2016!

Exorbitant retirement boon for BBVA COO


Angel Cano Fernandez has made a killing for himself after a short stint as COO of Spain’s second largest bank by assets.

Sika : why Saint Gobain should withdraw from its foolish attempt.


The French glass and building material group had seven years ago a first negative experience resulting from its own potective double voting right statutory provision when Wendel pretended, with about 20% of the Saint Gobain shares , to rule the management… Nevertheless aiming for a tricky acquisition of the successful Swiss Sika, Saint Gobain keeps neglecting the opinions and rights of large communities of employees and shareholders.

Actually, as mentioned earlier on this site, like many Swiss companies, Sika lived under the “protection” of a kind of triple voting right provision which offers to the founder’s family Burckard no less than 52% of the AGM voting rights for an economic ownership of only 16% of the shares held in a private vehicle. Saint Gobain signed the promise to pay some € 2.75 billion, more than twice the stock price, fot this vehicle,  subject to securing the benefit of the majority control by June 30th. of this year.

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