ECB Sets Strict Deadline for Paschi Capital Plan, Casino Guichard to Buy Cnova

Sarla Buch
27 Dec, 2016
New York City

The European Central Bank rejected plea for three-week extension to meet the capital shortfall to Banca Monte dei Paschi. Sports Direct sell its sportswear brand Dunlop for

[R]4:00 PM Frankfurt – The European Central Bank rejected plea for three-week extension to meet the capital shortfall to Banca Monte dei Paschi. Sports Direct sell its sportswear brand Dunlop for £112 million to Japan-based Sumitomo Rubber.[/R]

Financial markets in muted trading edged up in Europe after a 3-day weekend and investors remained focused on the brewing banking crisis in Italy.

In Frankfurt, the DAX index rose 13.93 to 11,463.60 and in Paris, CAC 40 index edged up 5.01 to 4,844.82. Markets in London were closed.

Banca Monte dei Paschi di Siena SpA, after the European Central Bank said that Italy-based banking services provider’s capital shortfall has increased to €8.8 billion from €5 billion.

The European Central Bank rejected plea for three-week extension until January 20, to raise €5 billion from the private group of investors, as its liquidity position suffered a “rapid deterioration” between November 30 and December 21.

In November month, the liquidity of the bank declined 7.6% to €7.7 billion from €12.1 billion.

Yesterday evening, the struggling bank said the ECB warned of the “rapid deterioration” and asked the bank to meet an end-of-year deadline to clean up its balance sheet.

However last week, the Italian government approved €20 billion bailout to stabilise the fragile financial institutions. On Friday, the trading in lender’s stock was suspended after the declaration of government assistance.

Casino Guichard Perrachon SA fell 0.6% to €45.29 after France-based discount store operator said that it had offered to acquire the U.S.-based online retailer Cnova NV for €0.05 per share in cash and $5.50 a share to the U.S. resident shareholders.

The offer will expire on January 25, 2017.

Lactalis Group, France-based privately held food and beverages maker plans to launch a voluntary tender offer for Italy-based Parmalat for the remaining 12.26% stake at a price of €2.80 per share.

Lactalis already owns 87.74% stake and the offer is aimed to delist Parmalat from the Milan Stock Exchange.

Parmalat SpA stock surged 10.1% to €2.83.

Sports Direct International Plc slipped 1.5% to 272.40 pence after the U.K.-based sporting goods retailer agreed to sell the 107-year-old sportswear brand “Dunlop” for £112 million or $137.5 million, including licensing business to Japan-based Sumitomo Rubber Industries Ltd.

The transaction is expected to close before May 31, 2017.