WEBVTT - WH Smith Up, Vivendi Slumps, Kering Drops

0:00:02.520 --> 0:00:07.440
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:08.560 --> 0:00:12.440
<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

0:00:12.480 --> 0:00:15.880
<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

0:00:16.560 --> 0:00:18.160
<v Speaker 3>Let's take a look at some stocks on the move

0:00:18.200 --> 0:00:20.680
<v Speaker 3>today in Europe. I'm Stephen Carroll and I'm joined Bubloomberg's

0:00:20.760 --> 0:00:23.800
<v Speaker 3>Breaking news editor Louise Moon for more. Louise, let's start

0:00:23.800 --> 0:00:26.599
<v Speaker 3>in the UK with the retailer W. H. Smith on

0:00:26.720 --> 0:00:28.360
<v Speaker 3>news of the resignation of its CEO.

0:00:29.480 --> 0:00:32.280
<v Speaker 1>Indeed, this is quite a dramatic bit of news this morning.

0:00:32.400 --> 0:00:35.360
<v Speaker 1>So their CEO has resigned with the media effect. That is,

0:00:35.440 --> 0:00:40.080
<v Speaker 1>after a independent investigation from Deloitte into an accounting era

0:00:40.200 --> 0:00:42.720
<v Speaker 1>in North America. So this was previously disclosed. It came

0:00:42.760 --> 0:00:45.640
<v Speaker 1>to light in April and at the time it caused

0:00:45.680 --> 0:00:48.120
<v Speaker 1>a Bootsmith to cut its profit outlook in North America

0:00:48.159 --> 0:00:52.239
<v Speaker 1>and shares plunged also at the time. So Deloitte then

0:00:52.240 --> 0:00:57.040
<v Speaker 1>investigated discounting era and released their findings essentially today, so

0:00:57.360 --> 0:00:59.840
<v Speaker 1>they've blamed the problem partly on a lack of oversight.

0:01:00.280 --> 0:01:03.560
<v Speaker 1>And then there was also quite a punchy line saying

0:01:03.600 --> 0:01:06.240
<v Speaker 1>that the US unit had, in their words, insufficient systems,

0:01:06.280 --> 0:01:11.319
<v Speaker 1>controls and review procedures. So WA Smith have announced this

0:01:11.360 --> 0:01:13.920
<v Speaker 1>to market today. They also at the same time set

0:01:13.959 --> 0:01:16.520
<v Speaker 1>out an even bigger hit to the North America unit

0:01:16.760 --> 0:01:18.920
<v Speaker 1>then they had previously forecast, so not good news, and

0:01:18.959 --> 0:01:23.119
<v Speaker 1>the CEO is resigning with immediate effect. Shares only fell

0:01:23.160 --> 0:01:25.120
<v Speaker 1>modestly on the news, and then they're actually now just

0:01:25.160 --> 0:01:28.320
<v Speaker 1>slightly ticking up into the green as analysts are saying

0:01:28.360 --> 0:01:32.320
<v Speaker 1>that they're essentially finding some positives away from the CEO news,

0:01:32.360 --> 0:01:34.520
<v Speaker 1>so they're saying that there is still a long way

0:01:34.520 --> 0:01:37.920
<v Speaker 1>to go to rebuild credibility, but that w Smith have

0:01:37.959 --> 0:01:40.880
<v Speaker 1>given some kind of reassurance on the UK market and

0:01:40.920 --> 0:01:42.680
<v Speaker 1>the West the rest of the world as well, as

0:01:42.720 --> 0:01:44.959
<v Speaker 1>that's a bit of a relief net. Death is lower

0:01:44.959 --> 0:01:48.280
<v Speaker 1>than expected then so there is some potential sill for

0:01:48.320 --> 0:01:51.240
<v Speaker 1>it to return to kind of long term growth, focusing

0:01:51.320 --> 0:01:52.560
<v Speaker 1>on their travel.

0:01:52.320 --> 0:01:55.120
<v Speaker 4>Unit, which is their main unit, and in North America

0:01:55.160 --> 0:01:55.520
<v Speaker 4>as well.

0:01:56.640 --> 0:01:58.600
<v Speaker 3>Okay, so that's a very interesting one to be watching.

0:01:58.720 --> 0:02:01.640
<v Speaker 3>Let's go to France next. The media group for Vendi's

0:02:01.680 --> 0:02:04.320
<v Speaker 3>share is down thirteen percent nearly in Paris.

0:02:04.360 --> 0:02:08.600
<v Speaker 1>What's going on indeed, so the French market regulator has

0:02:08.680 --> 0:02:13.359
<v Speaker 1>essentially said that the Vendi's majority shareholders, so the billionaire

0:02:13.440 --> 0:02:17.160
<v Speaker 1>Vincent Belore and his company must make a public offer

0:02:17.280 --> 0:02:20.200
<v Speaker 1>for the Vendi shares within six months. So what's happened

0:02:20.280 --> 0:02:23.240
<v Speaker 1>is Vendi broke up last year and the regulator says

0:02:23.280 --> 0:02:25.120
<v Speaker 1>that at the time they should have offered to buy

0:02:25.160 --> 0:02:28.680
<v Speaker 1>out other shareholders, so that they already own thirty percent,

0:02:28.720 --> 0:02:31.440
<v Speaker 1>they're they're the majority shareholders, but they should have offered

0:02:31.480 --> 0:02:33.919
<v Speaker 1>to buy out other shareholders at the time, and saying

0:02:33.960 --> 0:02:36.880
<v Speaker 1>that they now should make a bid for the shares

0:02:36.919 --> 0:02:39.480
<v Speaker 1>of what remains of the original company that's still listed.

0:02:40.360 --> 0:02:43.480
<v Speaker 1>So this this kind of falls in favor of an

0:02:43.560 --> 0:02:46.760
<v Speaker 1>activist investor. They've argued that the break up kind of

0:02:46.760 --> 0:02:50.040
<v Speaker 1>gave preferential treatment to Belore over minority shareholders. And it

0:02:50.440 --> 0:02:53.480
<v Speaker 1>all comes down to how much control the company has

0:02:53.520 --> 0:02:56.600
<v Speaker 1>over decisions due to the structure of a Vendi of

0:02:56.680 --> 0:02:57.240
<v Speaker 1>the company.

0:02:58.120 --> 0:03:00.400
<v Speaker 4>So we'll have to say see.

0:03:00.280 --> 0:03:04.280
<v Speaker 1>What happens if this this ruling by the regulator could

0:03:04.320 --> 0:03:07.480
<v Speaker 1>be overturned in appeal, and it's not clear how much

0:03:07.480 --> 0:03:10.519
<v Speaker 1>he would have to offer shareholders. But as you say,

0:03:10.639 --> 0:03:13.400
<v Speaker 1>shares a moving on that news this morning, and you know,

0:03:13.440 --> 0:03:16.920
<v Speaker 1>if this all goes through and shareholders to accept the offer,

0:03:16.960 --> 0:03:18.640
<v Speaker 1>then Vivendi could potentially dealist.

0:03:18.680 --> 0:03:20.520
<v Speaker 4>So we'll be keeping a close eye on what happens

0:03:20.520 --> 0:03:20.760
<v Speaker 4>with that.

0:03:21.160 --> 0:03:21.359
<v Speaker 2>Yeah.

0:03:21.400 --> 0:03:25.240
<v Speaker 3>Indeed, an opinion from the French Advocate General, so one

0:03:25.240 --> 0:03:28.200
<v Speaker 3>of the legal advisors to the court being reported by

0:03:28.240 --> 0:03:32.200
<v Speaker 3>Lamand newspaper this morning. Keep part of that share moving story.

0:03:32.480 --> 0:03:36.000
<v Speaker 3>Let's stay in France though and talk about caring warnings

0:03:36.000 --> 0:03:38.600
<v Speaker 3>that will have to scale back reliance on Gucci.

0:03:39.160 --> 0:03:42.520
<v Speaker 1>Indeed, Yeah, this so this was a report saying, yeah,

0:03:42.560 --> 0:03:45.200
<v Speaker 1>that they would reduce their reliance on Gucci, which is

0:03:45.200 --> 0:03:48.320
<v Speaker 1>obviously Carring's biggest brand, by kind of you know, developing

0:03:48.360 --> 0:03:51.960
<v Speaker 1>other brands and focusing on other ones like Blentciaga. Also

0:03:51.960 --> 0:03:54.000
<v Speaker 1>saying that they would need to scale back their store

0:03:54.040 --> 0:03:57.920
<v Speaker 1>network and have a rethink about their price positioning as well.

0:03:57.960 --> 0:04:00.840
<v Speaker 4>And this is all to return to growth.

0:04:01.800 --> 0:04:04.840
<v Speaker 1>Shares fell on the back of that the most nearly

0:04:04.880 --> 0:04:07.720
<v Speaker 1>two weeks unless is saying it's all quite vague, there's

0:04:07.760 --> 0:04:10.880
<v Speaker 1>no definition of growth targets, there's no kind of hard facts,

0:04:11.960 --> 0:04:15.760
<v Speaker 1>and the report did note that the actual officially official

0:04:15.800 --> 0:04:19.440
<v Speaker 1>strategy plan will be presented next year, so those details

0:04:19.520 --> 0:04:22.479
<v Speaker 1>potentially to come, but it just had to take a

0:04:22.520 --> 0:04:24.679
<v Speaker 1>step back with the wider context. So that the CEO

0:04:24.800 --> 0:04:27.360
<v Speaker 1>joined in June, and he was very welcome by investors.

0:04:28.320 --> 0:04:30.520
<v Speaker 1>And one of the key things was was a revival

0:04:30.520 --> 0:04:33.599
<v Speaker 1>of Gucci. So that hasn't yet happened. He has made

0:04:33.600 --> 0:04:36.400
<v Speaker 1>some changes, there's a new boss and you vowing to

0:04:36.440 --> 0:04:39.719
<v Speaker 1>cut costs and other measures. But all of these efforts

0:04:39.720 --> 0:04:41.920
<v Speaker 1>pointed to a revival, but potentially a bit of a

0:04:42.000 --> 0:04:45.000
<v Speaker 1>change in tone now saying that that Caring must reduce

0:04:45.040 --> 0:04:48.080
<v Speaker 1>their alliance on Gucci, so shares not reacting positively on

0:04:48.120 --> 0:04:48.640
<v Speaker 1>the back of that.

0:04:50.200 --> 0:04:54.200
<v Speaker 2>The Stock Mover's report from Bloomberg Radio. Check back with

0:04:54.320 --> 0:04:56.880
<v Speaker 2>us throughout the day for the latest roundup of companies

0:04:56.960 --> 0:04:59.920
<v Speaker 2>making news on Wall Street and for the latest market

0:05:00.120 --> 0:05:04.560
<v Speaker 2>moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube,

0:05:04.640 --> 0:05:08.120
<v Speaker 2>Bloomberg dot com, and on Applecarplay and Android Auto with

0:05:08.200 --> 0:05:09.679
<v Speaker 2>the Bloomberg Business app.