French video games co. dangles bleak Xmas over Sony, Xbox next-gen push

By Lionel Laurent

PARIS, Oct 16 (Reuters) - Shares of French videogames publisher Ubisoft slumped more than 25 percent to an eight-month low on Wednesday after delaying the release of two titles until next year, missing the holiday season in the hotly competitive industry.

Although the home-console market is no stranger to delayed releases, Ubisoft's move is the latest sign of mounting pressure in an industry where increasingly big-budget titles are having to fight harder to attract gamers' time and money in the face of nimbler and cheaper mobile alternatives.

"In a world of mega-blockbusters, we have now come to the conclusion that the team needed additional time," Yves Guillemot, chief executive of the company behind the Assassin's Creed and Far Cry series, told investors on a conference call.

Ubisoft blamed the delay on pressure to meet consumer expectations in the $66 billion hit-driven videogames industry and said the decision would cause it to swing to an operating loss for its 2013 to 2014 fiscal year.

The announcement, in a statement after Tuesday's market close, follows the huge success of Grand Theft Auto V, released last month by a unit of Take-Two Interactive, in which hedge-fund billionaire Carl Icahn owns a stake.

The delayed games, dystopian hacking adventure Watch Dogs and racer The Crew, were due to launch alongside next-generation consoles from Sony and Microsoft, making the sacrifice for quality a risky one in some investors' views.

"This is a pretty severe downward revision - these games were supposed to come out in time for Christmas," said Gregoire Laverne, a Paris-based fund manager at Roche Brune.

"They're being delayed for reasons of quality, which is a good thing, but companies like Ubisoft already have a tendency to restrict the amount of titles they produce. If they release fewer games they have to be a blockbuster every time, there is no room for error."

CONSOLE WARS

Shares of Ubisoft ended the day down 26.2 percent at 8.19 euros, giving it a market value of 782 million euros. The stock fell as low as 7.55 euros, its lowest since February.

The company now expects to report an operating loss of between 40 million euros ($54 million) and 70 million, against a previous target for a profit of 110 to 125 million.

Ubisoft also cut its sales forecast for 2013 through 2014 to between 995 million euros and 1.05 billion from a previous target of 1.42 to 1.45 billion.

The console market is trying to shrug off declining sales and the rising quality of mobile games with the launch of new high-powered machines, which themselves need major triple-A titles to generate interest.

"Console game revenues have been falling for a few years now, which has been very difficult for the games companies and one reason why there has been a focus on a smaller number of blockbuster titles," said Ed Daly, managing partner at Tenshi Consulting.

"People are managing to get their fix of games on other devices, especially smartphones."

The rapid growth of mobile gaming, thanks to devices such as the Apple iPhone, contrasts with consoles' woes and is attracting investor interest: Japan's SoftBank Corp is offering Nokia 150 billion yen ($1.52 billion) for a majority stake in Finnish mobile games-maker Supercell.

Publishers like Ubisoft and industry heavyweight Electronic Arts are also pouring resources into mobile: Ubisoft earlier this month announced the acquisition of mobile studio Future Games of London, while mobile and digital accounted for over 76 percent of EA's fiscal first-quarter revenue.

"The big-budget massive console releases, the triple-A releases, those gambles are becoming increasingly important to get right," said Nick Gibson, founder of Games Investor Consulting.

A pack of Gauloises and a savings account, please

By Lionel Laurent and Matthias Blamont

PARIS, Oct 16 (Reuters) - The French will soon be able buy their cigarettes and do their banking at the same time with the launch of a stripped-down, cut price bank account by the country's huge network of tobacconists.

France's 27,000 "tabacs", whose distinctive red, diamond-shaped signs dot the nation's streets, will be out to win business from the likes of BNP Paribas and Societe Generale as established banks cut back their retail networks in a stagnating economy.

The Nickel bank account, which after initial tests is due to be expanded nationwide next year, will offer customers a debit card and a current account for 20 euros ($27.17). That compares with about 28 to 30 euros for the cheapest payment cards at BNP, SocGen and Credit Agricole.

Though Nickel clients will be charged fees for depositing and withdrawing money, the tabac association CBF still estimates the cost of having an account at less than 50 euros a year. The association says this is a third less than the cost of an account with Bank of France.

Nickel, co-founded by ex-SocGen communications chief Hugues Le Bret, also wants to lure people on the fringes of the system who may be unable to open a traditional bank account.

"With this account, we are bringing banking access to those who feel they've been forgotten, notably in rural areas, or simply shut out because of a mistake along the way," Pascal Montredon, head of the CFB network, told a press conference.

Nickel estimates that 1 percent of the French population does not have a bank account, while there are 2.5 million people who are classified as "overindebted" and 6 million who are unhappy with their current bank.
It also said that it wants to help to fight debt problems by not offering loans and is using the slogan "100 percent useful, zero percent toxic".

Nickel is being launched at a time when French retail banking, traditionally a cash cow thanks to lucrative fees and widespread appetite for conservative savings products such as life insurance, is taking a hit from the stagnant economy and competition from cheaper online competitors.

Lenders themselves are trying to come up with alternatives even as they close branches. BNP this year launched the online-only Hello Bank in Germany, Belgium, France and Italy to bring in customer deposits without a bricks-and-mortar branch network.

Consumer association UFC-Que Choisir, which has railed against the rising cost of bank charges, said that Nickel might help hard-pressed consumers to save money on bank fees.

BNP declined to comment. SocGen and the French Banking Federation did not respond to requests for comment.

One of Europe's top bankers says the whole tax-haven thing is over. Others disagree.

(Reuters) - The practice of funnelling money to tax-free or low-tax countries such as Switzerland in order to avoid paying more punitive taxes at home is finished, the head of French bank Societe Generale (SOGN.PA) said on Tuesday.


Governments and regulators across the world have cracked down on tax evasion in the wake of the financial crisis, a drive which has seen the United States and Europe heap pressure on Switzerland, Liechtenstein, Monaco and others to surrender more information.

"With all the reforms today that have been done by various governments, tax havens - that is to say people with secret bank accounts hidden somewhere to avoid the tax authorities - in my view, that is over," SocGen Chief Executive Frederic Oudea told French television channel BFM.

Citing the example of Switzerland, he said: "What is happening right now means that nobody will take that kind of risk anymore."

Swiss banks last month publicly apologised for their role in helping tax cheats, following a landmark settlement with U.S. authorities that would allow lenders to come forward over tax evasion by U.S. customers and avert prosecution by paying a fine.

The crackdown has effectively meant that an incoming U.S. law requiring foreign banks to surrender information on U.S. account holders has become unnecessary, Oudea said.

The Foreign Account Tax Compliance Act, or FATCA, was enacted in 2010 but takes effect in July 2014. It requires foreign financial institutions to tell the U.S. tax authorities about Americans' offshore accounts worth more than $50,000.

"What is happening today, particularly in Switzerland, makes this law unnecessary," Oudea told BFM.
The head of UK advocacy group Tax Justice Network, John Christensen, said the idea that the days of tax havens were over at this stage "remains entirely wishful thinking".

"The use of secret bank accounts is rapidly being superseded by using offshore trusts and secret foundations," he said. "We're also seeing a wider number of jurisdictions, with Hong Kong, Singapore, Mauritius very rapidly gaining market share, and that is partly a reflection of what's happening as wealth concentrates in the Far East."

Interview: AXA Private Equity, now "Ardian", eager for deals

By Lionel Laurent and Matthieu Protard

PARIS, Oct 4 (Reuters) - French private-equity firm Ardian, recently spun off from insurer AXA AXAF.PA, expects to make two more deals before the end of the year after closing its latest buyout fund, one of its executives told Reuters.

Ardian, which has committed almost a quarter of the 2.4 billion-euro ($3.27 billion) fund, is riding a pickup in interest in European assets from foreign investors and is eyeing mid-sized targets in France, Germany and Italy that have international exposure and growth potential.

"We are looking to make two more transactions before the end of the year," Ardian Senior Managing Director Philippe Poletti said in an interview. "(European) companies are broadly in good shape... But not everyone has growth potential."

Formerly known as AXA Private Equity, Ardian manages $36 billion in assets and is headed by Dominique Senequier, one of France's best-known female executives. Recent acquisitions include German pharmaceuticals specialist Riemser, French engineer Fives and a minority stake in London's Luton airport.

As well as mid-sized buys, Ardian Managing Partner Dominique Gaillard said in the same interview that the firm was eyeing infrastructure assets like Vinci's SGEF.PA parking lots and more sizeable investments such as French catering group Elior.

"(Vinci Park) is something that interests us," Gaillard said. "If we look at it, it will be via our infrastructure fund. On Elior, there is no offer ... But we are interested."

Ardian also recently teamed up with China's Fosun 0656.HK to bid for French resort chain Club Med CMIP.PA, worth around 550 million euros. The bid was extended after shareholders issued a legal challenge but Gaillard said the bid would stay the same and that the complaints were "excessive".

Although deal making in Europe has been in the doldrums throughout the eurozone crisis, market conditions in the private-equity market have begun to improve with competition for assets less heated and banks more willing to lend, Poletti said.

There is also plentiful liquidity for the time being, he added, despite the risk of a knock-on effect in bond markets once central banks begin to unwind crisis-era liquidity support.

FRENCH IMAGE
When it comes to selling assets in Europe, the key will be taking advantage of growing cross-border interest from U.S. trade buyers and Chinese investors, Ardian's Gaillard said.

Although France has a reputation for being hostile to foreign takeovers - the French government scuppered a planned takeover of Dailymotion by U.S. web giant Yahoo YHOO.O - Gaillard said there was less uncertainty now on the tax environment and that he was optimistic about the future.

"We will see U.S. trade buyers come back ... And the Chinese have always been ready to seize opportunities," he said. "There is a gap between the (French) rhetoric and the reality, even though it's clear that the rhetoric has done a lot of harm."

As for Ardian's future strategy as an independent entity, with AXA retaining 23 percent in the firm, Gaillard stayed tight-lipped. Asked whether there could be an initial public offering of Ardian one day, he said it was not on the agenda.

Embattled head of pan-African Ecobank tells us he's open to changes

By Lionel Laurent

PARIS Fri Sep 27, 2013 6:32pm BST
 
(Reuters) - The chief executive of Ecobank (ETI.LG) said on Friday he was open to changing how the African lender decides on compensation and selection of board members amid Nigeria's continuing inquiry into governance issues at the bank.


While CEO Thierry Tanoh reiterated there was no substance to allegations of misconduct by a former employee that first triggered the probe by Nigeria's SEC, he told Reuters there were certain changes he believed could improve transparency and governance at the pan-African bank that operates in 34 countries.

"One issue that has already been raised is that Ecobank's group chairman is also the chairman of the governance committee," Tanoh said in an interview.
"There are other things: we could have a remuneration committee for certain executives and a selection committee for board members."

Ecobank, which is often touted as a pan-African banking success story, has seen its image take a hit from the Nigerian probe. The bank says the group's suspended head of finance, Laurence do Rego, has alleged she was asked to misstate 2012 results and that assets were being unnecessarily sold at a loss.

"I arrived in October 2012 ... How could I have put pressure in order to go back and misstate results?" said Tanoh, who dismissed the alleged activity as illogical and impossible to achieve without misconduct at all levels of the bank. "The SEC is obliged to investigate ...(But) the claims are impossible."

According to Ecobank, do Rego was suspended after she was caught lying about one of her qualifications and only then filed her complaint.

"I obtained permission to suspend (do Rego) ... I informally suggested she look for other opportunities ... And then she triggered everything," Tanoh said.

Looking to the future, Tanoh said he had no intention of stepping down but that calls for Chairman Kolapo Lawson to resign could only be answered by Lawson himself.

The CEO also said that he was confident in Ecobank's ability to drive growth organically and to cut costs.

 He said the bank's cost-to-income ratio should fall to below 70 percent next year from 71.3 percent in the first half of 2013.

"We have to work in a more efficient way ... This could mean taking a bank branch with too many staff and reallocating headcount elsewhere," he said.

Europe set for financial M&A pick-up, private-equity fund says

By Lionel Laurent and Matthias Blamont
PARIS, Sept 11 (Reuters) - Financial dealmaking will pick up in Europe as slow growth and tougher regulation prompts banks to try to slim down and boost profits, the co-founder of private equity firm BlackFin said on Wednesday.

Paris-based BlackFin has built up a portfolio of niche financial businesses across Europe since launching a 220-million-euro ($290-million) fund in 2011.

It expects to make more acquisitions of up to 100 million euros each and is eyeing Spain, Germany and Central Europe, Paul Mizrahi told Reuters in a telephone interview.

BlackFin is part-owner of brokerage Kepler Capital Markets, which recently struck a deal to buy French bank Credit Agricole's CAGR.PA broker Cheuvreux.

The firm sees more buying opportunities in asset management, insurance and equities brokerage and may launch a new fund within the next year or two, Mizrahi said.

While BlackFin focuses on small niche investments, there is increasingly deep-pocketed competition for European banking assets in general. Carlyle Group, Warburg Pincus and Apollo Global Management have all focused on European financials in recent years with varying degrees of success.

"This is a pretty ripe market for investment," Mizrahi said. "We are seeing an increase in the number of asset sales, either by insurers or banks, of subsidiaries that are no longer seen as strategic ... It's a big opportunity."

European banks have been under pressure since the 2008 financial crisis to sell assets to meet tougher post-crisis capital requirements. However, depressed valuations and the euro zone's troubles have deterred major cross-border deals.

"In asset management, whether in France or Germany, we once saw banks actively buying boutique firms ... some were successful but others were left by the wayside," said Mizrahi. "We are really interested in this sector."

BlackFin already owns wealth management advisory firm Cyrus Conseil.

There are also more bolt-on acquisitions to find for businesses like Kepler, which has struck deals with Italy's Unicredit CRDI.MI as well as Credit Agricole; the next step could be acquiring a broker in Spain, said Mizrahi, who also cited Germany as another market where deals could be made.

"We are seeing more and more offers from Germany," he said, noting that the country's banks were "not ahead of the pack" in terms of balance-sheet clean-up.

Mizrahi says BlackFin's portfolio, which includes French paycard provider Moneo, Italian insurance website Chiarezza and German online finance marketplace Finanzen, was overall bought relatively cheaply at around 6 to 7 times earnings before interest, tax, depreciation and amortization (EBITDA).

"We are already getting offers for a few of our holdings," he said. "In a world where there is zero growth, where the overall size of the market is not increasing, you must invest in the small players."

Special Report: Inside Qatar's (Tax-Free) Luxe Property Empire

(Full story)

My investigation of Qatar's property holdings in France, using a mix of public regulatory filings, turned up 6 billion euros' worth of luxury real estate and prompted TV coverage such as this report: http://videos.tf1.fr/infos/2013/le-parc-immobilier-du-qatar-en-france-depasserait-les-6-milliards-8260647.html

 
(Reuters) - The Champs-Elysees lures millions of tourists every year to enjoy shopping at the Elysees 26 mall, poker at the Aviation Club, plush cars and futuristic architecture in the Citroen showroom, or feather-clad showgirls at the Lido cabaret.


But for all their Parisian charisma, none of these attractions are French-owned. They belong to the royal family of Qatar, a resource-rich emirate about 3,000 miles away.

Some Muslims may frown on investments in gambling, alcohol and high-kicking dancers, but over the past few decades the buildings have helped bolster Qatar's global portfolio of trophy assets, including London's Harrods and Singapore's Raffles Hotel. The latest French addition was a chain of upscale malls under the Printemps banner, bought by a fund controlled by Qatari royals in August for 1.7 billion euros ($2.23 billion).

For oil-rich royalty from the Arab Gulf, part of the attraction of the United Kingdom has been the fact it charges no taxes on profits foreign investors make when they sell real estate. Five years ago, Qatar sealed a similar agreement with France. The treaty was agreed by former center-right president Nicolas Sarkozy in 2008, and is one of the most generous Qatar has secured, exempting Qatari investors from taxes on the profits they make when they sell properties.

In a country where 3.6 million people lack decent housing, according to Abbe Pierre, a charity, that is controversial.

Politicians, including some in Francois Hollande's new Socialist government, have been critical. In April budget minister Bernard Cazeneuve called the treaty "an exception that we do not wish to duplicate." Others have asked if the accord brings economic benefit to compensate for the lost tax revenue.

The government has said it is examining the treaty, but an official at the French finance ministry told Reuters that Qatar's purchases don't have to be declared, so it is impossible to see how much tax is at stake.

A Reuters examination of regulatory filings, court documents and other data sheds new light on Qatar's property assets. Reuters mapped around 40 properties in France that are owned by Qataris, a total investment of 5.9 billion euros ($7.8 billion) over the past decade, including 4.8 billion since 2008. At current values they would be worth around 6.3 billion euros.

The Qatari state and its sovereign wealth fund own about a dozen of the properties, together worth around 3 billion euros, Reuters found; the rest belong to members of the ruling al-Thani family. A personal fund set up by Sheikh Hamad bin Khalifa al-Thani, the previous emir, controls about nine of them; his children, including the current emir, six. The rest were bought either by other relatives, or businessmen with strong ties to the al-Thanis, such as Ghanim bin Saad al-Saad.

Each property is owned by a holding company that is itself held by one or more entities, some of them outside France. This makes it hard to track when properties change hands, to see how much tax the French have forgone with the deal.

If there had been no treaty, though, market values at the end of 2012 suggest the French government would have collected at least 145 million euros in tax if the entire portfolio were sold and taxed at the lowest applicable rate, according to Reuters calculations which were assessed by three experts.

While that's less than a day's gas export revenues for Qatar, in France it would equate to a year's pre-tax pay for some 4,500 schoolteachers or nurses.

The Qatari authorities and the sovereign wealth fund Qatari Diar did not respond to questions. Chadia Clot, whose company French Properties Management handles private investments made by the al-Thani family, did not respond.

Gilles Kepel, a professor at the Paris Institute of Political Studies, Paris, said Qatar's financial gains symbolize how the emirate has gained influence by spending its resource wealth, but has also triggered friction.

"Qatar has had a full-speed-ahead investment strategy in France, forged under the previous French administration," said Kepel. "But this has led to antagonism."

 (Full story)