January 22, 2018 / 10:06 AM / a year ago

LIVE MARKETS-Views from the Street: Richemont's offer for YNAP

    Jan 22 (Reuters) - Welcome to the home for real time coverage of European equity markets
brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on
Messenger to share your thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net 
    Surging up to the top of Italy's stock index is Yoox Net-a-Porter, up 24
percent to a record high after Richemont put in a bid for the remaining shares in YNAP,
at a 26 percent premium to Friday's closing price. 
    "The deal seems to reflect Richemont's aim to expand but at the same time control its
distribution channels," note Baader Helvea analysts. The deal is in a similar vein to
Richemont's recent move to increase its stake in duty free retail company Dufry.
    "Given the lack of interesting acquisition targets up for sale in their core business of
hard luxury, Richemont has decided to put at work its big cash pile investing into distribution
channels," write Bernstein's Mario Ortelli and team.
    Crucially, Bernstein analysts note, Richemont will continue to run YNAP as a separate
business in order to make sure third-party luxury brands continue to see it as a neutral
    The already strong ties between the companies mean analysts don't see counter-bids as
    We're just under the offer price of 38 euros now. Richemont shares meanwhile are down 1
percent as investors digest the bid. "Due to [YNAP's] relatively lower ROIC profile, some
investors may question the group's decision to go back to the lower return e-commerce business
rather than look to expand its existing brand portfolio," says Berenberg.    
    (Helen Reid)
    European shares have opened little changed with the broader pan-regional STOXX 600 stuck at
Friday's level and sectoral indexes also showing small moves. 
    Germany's DAX is up a little as Chancellor Angela Merkel's conservatives prepare for formal
coalition talks after the centre-left SPD voted narrowly to go ahead following months of
political deadlock.
    Below the surface, the price swings are much bigger.
    Top 2 movers on the STOXX 600 are Sweden's Orphan Biovitrum, up 15 percent, which
is a partner of hemophilia drug maker Bioverativ that Sanofi agreed to buy, and bookie William
Hill, down 14 percent after the Sunday Times reported that Britain will limit gambling
terminal stakes to two pounds. 
 (Danilo Masoni)   
    Investors betting on a pick of M&A deals in the pharma sector will likely be emboldened by
news that French healthcare group Sanofi has agreed to buy U.S. peer Bioverativ in a
$11.6 billion transaction.
    Check out our story here for more details on the cash deal which comes after
Sanofi had failed to land major takeovers in recent years. Separately, Biotest said
late on Friday it sold its U.S. operations, allaying U.S. national security concerns and paving
the way for the German blood plasma products maker's sale to a Chinese investor.
    Just in recent weeks there has been a flurry of M&A deals in the biotech space worth several
billion dollars. Here's a quick recap of dealmaking that has involved European companies: Novo
Nordisk/Ablynx; Roche/Ignyta; and Takeda/TiGenix
    (Danilo Masoni)

    It seems to be business as usual so far on European stocks markets with futures indicating
shares to rise slightly, expect in London with the FTSE losing a few points. 
    That could change however with a prolonged stalemate in Washington but in the meantime, in
Europe, prospects of talks between Merkel allies and the SPD should support  sentiment.
    Main newsmaker this morning is France's Sanofi, which confirmed a bid for U.S. peer
Bioverativ , another sign that M&A should indeed continue to spice things up. 
    Switching from spice to sugar, Italian airports and motorway operator Atlantia is open to
sweeten its bid to Abertis and other takeover preys, such as Ablynx in Belgium or GKN in  the
UK, expect their would-be suitors to cough up more cash to woo investors. 
    A deal is not always needed though for shareholders to get extra cash:  UBS  proposed an
increased dividend and new share buyback programme despite a hefty write down from a tax
overhaul in the United States. 
    Other movers today could include troubled South African retailer Steinhoff which plans to
sell about 7.5 billion rand ($620 million) of shares in investment firm PSG Group it scrambles
to plug a liquidity gap.
    Possible impact also of the chief executive of Dixons Carphone leaving Britain's largest
electricals and mobile phone retailer to run the Boots chain. 
    Also, platinum miner Lonmin reported a 65 percent drop in 2017 profit, citing higher costs
and subdued commodity prices but reiterated its 2018 targets
    Please have a look below for a summary of our main headlines.
    (Julien Ponthus) 

    Healthcare group Sanofi agrees to buy U.S. peer Bioverativ for $11.6 bln   
    Richemont offers 2.8 bln euros to buy Yoox Net-A-Porter    
    Steinhoff to place shares in PSG Group worth around $620 million  
    UBS ups investor returns as US tax overhaul socks bank with quarterly loss   
    Takeover target GKN raises forecast for electric driveline sales   
    Dixons Carphone reports 6 percent jump in underlying revenue   
    Dixons Carphone CEO James quits for job at Boots  
    TUI sees record sales, earnings in 2018-paper    
    Atlantia opens door to sweetening Abertis bid    
    Takeaway.com says merger with Delivery Hero an option –paper   
    UK Q4 motor insurance premiums fall 1.3 pct-survey   
    Britain to limit gambling terminal stakes to two pounds-Sunday Times   
    LVMH hires Hedi Slimane for Celine brand    
    Engie to keep separate CEO, board chair roles -finance minister  
    Deutsche Telekom expects steady dividend hikes –paper   
    Hearing on Vivendi's appeal against Italian antitrust ruling postponed     
    Schaeffler CEO says splitting company would be unwise -paper     
    UK Takeover Panel extends deadline for IWG bidding    
    Sika CEO says share price rise could end takeover battle   
    UK's Computacenter says to beat 2017 expectations, sees stable 2018   
    Lonmin reports 65 percent fall in 2017 profit on higher costs   
    (Tom Pfeiffer)
    Futures have opened with slight gains overal but London's FTSE 100 is seen, as earlier
indications from spreadbetters showed, opening in negative territory.  
    (Julien Ponthus) 
    While many see minimal impact on the economy from a short-term government shutdown, analysts
say a prolonged stalemate in Washington could dampen investors' confidence in U.S. assets.
   Here's how Nordea sums up what's to be expected based on the previous shutdowns:     
   (Julien Ponthus) 
    Good morning and welcome to Live Markets. European shares are set to open sideways on Monday
with the U.S. government still shut down but with hopes of an end to the political deadlock in
Germany with German Chancellor Angela Merkel's conservatives getting ready to start formal
coalition talks with the Social Democrats (SPD). 
    Earlier, U.S. stock futures, Asian equities and the dollar pulled back slightly as the U.S.
government is shut down amid a dispute between President Donald Trump and Democrats over
    London's FTSE 100 is expected to open 14 points lower, Germany's DAX 31 points higher and
France's CAC 40 up 5 points. 
    (Julien Ponthus)

 (Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)
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