Exor S.p.A. Investment Conglomorate (EXORF)

[Wildbilly]

Exor Spokesman Denies Fiat in Takeover Talks With VW


By Eric Sylvers

MILAN--A spokesman for Exor SpA, the holding company through which the Agnelli family controls Fiat SpA, denied Thursday that the clan is in takeover talks with the controlling family of Volkswagen AG.
A German magazine reported that the Agnellis and the Piech family, which controls Volkswagen, have held talks about a possible merger. Shares in Italy's Fiat SpA surged early Thursday, rising nearly 5% at one point. They were 3% higher in early afternoon trading in Milan. Volkswagen shares were down nearly 3%.
According to a pre-release of an article to appear in the German monthly business magazine Manager Magazin, the two families are in talks about merging the car makers, with VW anxious to bulk up in the U.S. market through Chrysler, which is merging with Fiat. At the same time, the deal would allow the Agnelli family to focus on its luxury Ferrari brand and get out of the mass market. Spokesmen for VW and Fiat declined to comment.
In May, Fiat unveiled an ambitious five-year plan to boost its car sales by 60% by 2018. Under the leadership of CEO Sergio Marchionne, Fiat has engineered a takeover of Chrysler, whose strong performance has helped Fiat balance deep losses in its legacy European business.

Write to Eric Sylvers at [e-mail]

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(END) Dow Jones Newswires
July 17, 2014 07:51 ET (11:51 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.- - 07 51 AM EDT 07-17-14
Source: DJ Broad Tape

[Wildbilly]

EXOR shares rise sharply on Fiat/Chrysler deal

Turkish Lira, South African Rand Tumble -- Update)

By Tommy Stubbington
The Turkish lira sank to a fresh all-time low Thursday, as the first trading day of the new year sparked a renewed selloff in emerging market assets.
The South African rand also tumbled, hitting a 41/2 year low against the dollar, with the repercussions of last month's decision by the U.S. Federal Reserve to scale back its bond-buying stimulus program continuing to echo through financial markets.
Countries such as Turkey and South Africa, which rely on foreign cash to fund their current account deficits, have been hit hard by the coming reduction in the Fed's largess.
Meanwhile, investors have continued to fret about a corruption scandal that has engulfed Turkey's ruling party.
The dollar climbed 1.4% against the Turkish lira to trade at 2.1826 lira, a fresh all-time high. Shares also suffered. Turkey's benchmark BIST 100 stock index fell 1.9%, recouping some of its losses after declining by as much as 2.4% in early morning trading.
But the selloff wasn't limited to Turkey, with analysts pointing to rising yields on U.S. Treasurys as the trigger. The 10-year U.S. Treasury yield, a key indicator of dollar interest rates, climbed above 3% Wednesday.
"The sharp increase in dollar rates puts pressure on countries with current account imbalances, and there's a psychological effect associated with the 3% level," said Aurelija Augulyte, a foreign exchange analyst at Nordea Markets.
The dollar gained 1.3% against the South African rand to trade at 10.629 rand, a 41/2 year high. The Indian rupee wasn't spared, losing 0.7% against the greenback.
Political instability in Turkey has "reminded everyone that some of these emerging market countries are very vulnerable," said Christian Lawrence, and emerging market currency strategist at Rabobank.
Even so, holiday-thinned trade was exaggerating the moves. "The real test will be how trading pans out next week," Mr. Lawrence said.
In wider European markets, stocks fell at the start to the new year, as the slide in Treasurys was echoed in European debt markets, and investors reacted to a slowdown in Chinese manufacturing.
U.K. government bond prices fell to near their lowest level since the summer of 2011. The yield on the U.K. bond, which moves inversely to prices, rose 0.04 percentage points to 3.08%.
The recent rise in yields has given equity investors pause for thought before driving 2013's stock rally any further, according to Jeremy Batstone-Carr, chief economist and strategist at London-based brokerage and wealth manager Charles Stanley, which has around GBP18 billion ($29.8 billion) in assets under management. A further increase could convince some investors to divert cash from stocks into bonds, he said.
"What's slightly worrying is the pace at which we are seeing the yield curve steepen [as longer-dated yields rise]," Mr. Batstone-Carr added.
The pan-European Stoxx Europe 600 index quickly shed opening gains to trade 0.4% lower, having closed at a 51/2 year peak Tuesday. Germany's DAX shed 0.6%, France's CAC 40 lost 1.1%, while London's FTSE 100 slipped 0.6%.
Italy's FTSE MIB fared better, falling just 0.3%. The index was helped by a hefty opening gain for Fiat after the car maker sealed a deal to buy the rest of Chrysler Group LLC. Fiat's largest shareholder, Italian investment company Exor, also saw its stock rise sharply.
Bonds issued by the euro zone's weaker nations bucked the trend, with Italian, Spanish, Portuguese and Greek debt all rallying sharply. Italy's 10-year yield moved below 4% for the first time since May last year.
Data released Thursday showed that the manufacturing purchasing managers index for the euro zone rose to 52.7, in line with an earlier estimate. A reading above 50 indicates expansion of the sector. Earlier, weak Chinese manufacturing data had weighed on most Asian markets.
In the U.S., futures contracts were indicating a 0.2% opening loss for both the Dow Jones Industrial Average and the S&P 500. Changes in futures don't always accurately predict market moves after the opening bell.
In commodities markets, gold leapt 1.5% to $1220.5 an ounce as investors covered bets on lower prices following recent steep declines. Brent Crude climbed 0.3% to $111.12 a barrel.
Write to Tommy Stubbington at [e-mail]

(END) Dow Jones Newswires
January 02, 2014 07:09 ET (12:09 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.- - 07 09 AM EST 01-02-14
Source: DJ Broad Tape

[Wildbilly]

Fiat Owner Sells Stake in Swiss Firm
By REUTERS
Published: June 3, 2013

MILAN — The holding company that controls 30 percent of Fiat said on Monday that it had sold its stake in a Swiss company, a move analysts said was to help prepare for Fiat’s eventual purchase of the rest of Chrysler.
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The holding company, Exor, which is run by a member of Fiat’s founding Agnelli family, said it had sold its 15 percent stake in SGS, a Swiss inspection and testing company, to the Belgian conglomerate Groupe Bruxelles Lambert for 2 billion euros, or $2.6 billion.

Investors saw the move as connected to Fiat’s plan to buy the Chrysler shares it did not already own, an acquisition that is likely to cost about $4 billion but whose final bill has not yet been determined.

Fiat has steadily increased its ownership in Chrysler since an alliance between the two automakers was announced in 2009. It now holds 61.8 percent of Chrysler.

The chairman of Exor and of Fiat, John Elkann, signaled his determination last week that Exor’s stake in Fiat would not be watered down in the Chrysler merger, which Fiat’s chief executive, Sergio Marchionne, has said may be partly financed by a share issue.

Mr. Elkann, a descendant of the Fiat co-founder Giovanni Agnelli, whose family has owned the Italian carmaker since 1899, was quoted as saying that Exor would use 1.2 billion to 1.3 billion euros already on its balance sheet to retain its interest once Fiat and Chrysler were merged.

“This transaction could seem like Exor wants to raise cash ahead of an investment in Fiat-Chrysler, in the event that Fiat needs to bolster its equity as it brings its stake in Chrysler to 100 percent,” Luca Arena, an analyst at the Istituto Centrale delle Banche Popolari Italiane in Milan, wrote in a note.

Exor, which also controls the truck maker Fiat Industrial, had been an investor in SGS for 13 years. It said it had purchased the stake for about 500 million euros.

Despite the prospects for a capital increase, Fiat shares held on to last week’s gains and closed on Monday at 6.32 euros, their highest level since August 2011.

When companies announce a capital increase, their shares usually fall as investors anticipate the cost of taking part or the risk of being diluted, but some analysts say Fiat’s recent resilience shows support for the Chrysler deal.

[Wildbilly]

Exor Chairman: No Capital Increase Needed to Fund Fiat Deal


  TURIN, Italy--Exor SpA (EXO.MI) Chairman John Elkann said his holding company had "absolutely no need" to raise fresh capital to fund Fiat SpA's (F.MI) planned merger with Chrysler Group, MF-Dow Jones reported.
  "We have all the capacity we need," MF-Dow Jones quoted Mr. Elkann as saying on the sidelines of Exor's shareholder assembly. Exor owns about 30% of Fiat.
  "It's far too soon to consider" whether Fiat itself might need to raise fresh equity capital to complete the planned deal, said Mr. Elkann, who is also chairman of the carmaker.
  He added there were no plans to split off Ferrari, a profitable division of Fiat.
  At 1325 GMT, Fiat shares are up 2.6% at EUR5.89. They have risen 30% in the past month on growing expectations that a deal with Chrysler will take place soon.
  Exor shares have risen only 8.5% in the past month and are up 1.2% to EUR24.95 on Thursday.
  Mr. Elkann said that it "can't be excluded" that the company reaches a deal with VEBA, the trustee of Chrysler's workers that owns more than 40% of the U.S. carmaker, before a court ruling over the contested price of a tranche.
  Write to Alberto Chimenti of MF-Dow Jones at [e-mail]

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  (END) Dow Jones Newswires
  May 30, 2013 09:40 ET (13:40 GMT)
  Copyright (c) 2013 Dow Jones & Company, Inc.- - 09 40 AM EDT 05-30-13
Source: DJ Broad Tape

[Wildbilly]

Exor S.p.A. Announces Unaudited Group and Parent Earnings
Results for the Year Ended December 31, 2012; Provides Financial Guidance for 2013; Proposes Ordinary Share and Preferred Share Dividend for 2012 Payable on June 27, 2013

Exor S.p.A. announced unaudited group and parent earnings results for the year ended December 31, 2012. For the year, on group basis, the company's NAV at December 31, 2012 was €7,620 million. This is an increase of €1,300 million from €6,320 million at December 31, 2011. The EXOR Group ended the year 2012 with a consolidated profit of €398.2 million; 2011 closed with a consolidated profit of €504.2 million. The decrease of €106 million is due to a reduction in the share of the results of subsidiaries and associates (€128.6 million), a decrease in dividends from investments (€10.2 million), an increase in net financial expenses (-€6.4 million), compensated in part by the increase in net gains realized during the year (+€15.8 million) and other net positive changes (+€23.4 million). Profit before income taxes was €398.8 million against €526.6 million a year ago. For the year, on parent basis, the company reported a profit before income taxes of €150.0 million and profit of €150.5 million against profit before income taxes of €60.3 million and profit of €58.7 million a year ago. Thus the board of directors resolved to propose to the shareholders' meeting the payment of unchanged dividends of €0.3350 to each ordinary share, €0.3867 to each preferred share and €0.4131 to each savings share for a maximum total of €78.7 million. The proposed dividends will become payable June 27, 2013 (stock market June 24 ex-dividend date) and will be paid to the shares on record at June 26, 2013 and to the shares outstanding, excluding treasury shares held directly by EXOR S.p.A. At the consolidated level, the year 2013 will show a profit which, however, will largely depend upon the performance of the principal subsidiaries and associates.

[Wildbilly]

Fact Sheet (PDF)

http://www.exor.com/uploads/637930-fact_sheet_20130424_EN.pdf

[Wildbilly]

Our history

EXOR sums up an entrepreneurial story based on more than a century of investments made through various companies controlled by the Agnelli Family.

1899
Giovanni Agnelli with some other entrepreneurs founds the Fabbrica Italiana Automobili Torino (FIAT). To learn more about FIAT's history, click here

1927
IFI - Istituto Finanziario Italiano - is founded by Senator Giovanni Agnelli to draw together, control and manage the holding in Fiat and various other companies: RIV, SAVA, Cinzano, Sestriere, Vetrocoke, Società Anonima Manifattura Pellami e Calzature, Società Aviolinee Italiane, Società Idroelettrica Piemontese (SIP), as well as numerous agricultural and real estate properties. IFI will enable Senator Agnelli and his successors (children and grandchildren) to exercise control over all the holdings in these companies.

1935
IFI purchases Ferrania and increases its holding in Cinzano, acquiring Cinzano Ltd. (which includes numerous Cinzano companies in Italy and abroad). Compagnia Generale Italiana della Grande Pesca (Genepesca) is established and the operations of SAVA are expanded, with the issue of interest-bearing bonds to offset the credit granted to finance the purchase of autos.

1937
IFI invests in the agricultural sector, acquiring an estate near Vercelli and an investment in Società Anonima Le Gallare, which conducts land reclamation operations in the Ferrara area.

1942
IFI increases its investments in cement and founds the companies Adriaportland and Dalmatia near Spalato, resulting in Cementerie Riunite of Spalato.

1946
IFI directs its investments towards post-war reconstruction. Motor vehicle and engineering factories are repaired and the production facilities of Manifattura Pellami are revamped. Società Esercizi Sestriere rebuilds all its hotels and installs new lifts, SAPAV replaces its vehicles and Vetrocoke starts to produce glass, coke and fertilizer again.

1953
During the reconstruction period, IFI creates Cementerie di Augusta, with an annual production capacity of 200,000 tonnes of cement, and increases the production capacity at two other plants which are already operating at Guidonia and Macomero.

1957
IFI acquires control of Istituto Commerciale Laniero Italiano, which conducts activities in the financial field, particularly in the textile and wool sector, and increases its holding in Technicolor Italiana (established jointly with the American company Technicolor Corporation).

1959
IFI invests in winter tourism, extending the water mains system and the infrastructures at Sestriere. The Albergo Principi hotel is expanded and renovated and new chair-lifts are built.

1963
Istituto Commerciale Laniero Italiano extends its operations to the banking system and changes its name to Istituto Bancario Italiano Laniero. Three years later, having spun off the banking business to Banca Subalpina, the company becomes Istituto Finanziario Italiano Laniero (IFIL), playing a parallel role to that of IFI and conducting similar investment management activities.

1964
IFI International (IFINT) is set up to draw together the Group's foreign holdings. In the same year, IFI exchanges its shares in Ferrania for a holding in the American company Minnesota Mining & Manufacturing (3M). Ferrania-3M is born.

1967
IFI lists the shares of the subsidiary SAI on the Turin and Milan Stock Exchanges and devises new development initiatives for Sestriere, including a hotel for Club Méditerranée.

1968
By an offering of its preferred stock for trading, IFI becomes a company listed on the Italian Stock Exchange. Its ordinary capital remains entirely in the hands of the Agnelli Family.

1970
IFI gains control of Gruppo Editoriale Fabbri.

1973
IFINT is listed on the Luxembourg Stock Exchange and opens branches in the U.S.A., France and Switzerland. In the following years, it acquires investments in the U.S.A., including Bentham Books, Southland Financial and Blackwell Land (1974), and Moog Automotive, a company manufacturing car components and spare parts (1977).

1979
IFINT acquires the entire capital stock of CR Industries (components for the automotive and machine tool sectors) and, together with Unicem, invests in River Cement Company (operating in the cement sector) in Saint Louis. Over the three following years it makes other investments in the cement business (Hercules Cement and Signal Cement).

1983
IFIL sets up Primegest, a financial company which is one of the first in Italy to start investment funds management operations. Next, it acquires the majority holding in the Toro Assicurazioni insurance company and acquires the La Rinascente department store chain.

1985
IFINT strengthens its presence in the American components and spare parts market, acquiring Import Parts America and (1986) Everco Industries, then becoming the Moog Automotive Group.

1986
IFIL acquires a significant part of the investment in Fiat held by Libyan Arab Foreign Investment Company, bringing the total investment in Fiat's ordinary capital stock to just under 40%.

1987
The company Società in Accomandita per Azioni Giovanni Agnelli e C. (GAeC) is formed, bringing together the holdings in IFI held by members of the Agnelli Family. Furthermore, IFIL seals an alliance with the French BSN Group (later to become Danone), by acquiring 5.4% of the capital stock. Investments in the food sector follow, including holdings in Gruppo Sangemini, Birra Peroni, Star and Saint Louis.

1988
IFINT acquires investments in the insurance sector (Fireman's Fund Co.) and the car component sector (Lear Seating Co.) in the U.S.A.

1989
IFIL and BSN gain control of the food group Egidio Galbani.

1990
IFIL acquires a 7% holding in the French financial company Pechelbronn (later called Worms & C.ie).

1991
IFINT acquires an investment in the French company Exor S.A. and subsequently launches a takeover bid. This concludes with IFINT taking over the Chateaux Margaux company and some real estate properties in central Paris.

1993
IFI participates directly and indirectly in the Fiat capital stock increase. IFINT disposes of Lear Seating Co. and changes its name to Exor Group. IFIL launches a takeover bid for La Rinascente and gains control of the company. In the following years, having reached an agreement with the French group Auchan, IFIL's investment grows and its control gradually increases.

1994
Exor Group acquires investments in the American engineering (Western Industries) and food (Danone Asia) sectors. In the following years, Exor invests again in the U.S.A. (Constitution Reinsurance Co., Riverwood and the Rockefeller Center), Hong Kong (Distacom and Li&Fung) and France (Club Méditeranée).

1997
IFI and IFIL sell their investment in Unicem to Gruppo Buzzi and take over 5% of Istituto Bancario Sanpaolo di Torino. IFIL launches a takeover bid for Worms & C.ie shares, acquiring control of the company (listed on the Paris Stock Exchange) and participates in the privatization of Telecom Italia promoted by the Treasury .

1999
GAeC., with a takeover bid, acquires total control of Exor Group and begins to gradually dispose of its main holdings.

2000
IFI and IFIL acquire approximately 30% of Fiat preferred capital stock. In France, Worms & C.ie launches a takeover bid for the shares of the Arjo Wiggins Appleton paper company and acquires an interest in Société Générale de Surveillance (SGS). IFIL also gains control of the Alpitour tourism group.

2001
IFI lists a minority holding in Juventus FC capital stock on the Italian Stock Exchange.

2003
IFIL and IFI increase their capital stock to conduct a similar transaction at Fiat. On this occasion, a reorganization is carried out, which also results in the transfer of the investments held by IFI (Fiat, San Paolo IMI and Juventus FC) to IFIL.

2004
IFIL and Exor sell their respective holdings in Club Méditerranée. During 2004 and 2005, IFIL also disposes of its holding in La Rinascente.

2005
IFIL acquires 82,250,000 Fiat shares from Exor Group resulting from an equity swap transaction. The transaction allows IFIL to maintain the 30% holding in Fiat, remaining the stockholder of reference when the convertible facility is converted to stock. Furthermore, Worms & C.ie disposes of Permal Group (funds of funds) to Legg Mason and changes its name to Sequana Capital.

2006
IFIL acquires 10% of Banca Leonardo, the independent investment bank founded by Gerardo Braggiotti. Furthermore, Sequana Capital distributes SGS stock to its stockholders under a public exchange offer for Sequana stock, and concentrates its activities in the paper industry with Arjo Wiggins and Antalis.

2007
The IFIL Group gains control of Cushman & Wakefield, the largest privately held American company operating in real estate services.

2008
IFIL subscribed to bonds, enabling it to acquire 40% of Vision Investment Management (asset management on Asian markets) and acquired 17% of Banijay Holding (European TV productions).

2009
On March, 1st IFIL was merged in IFI, which changed its name to EXOR S.p.A.

[Download in pdf version]

[Wildbilly]

Letter to shareholders

Dear Shareholders,
EXOR’s Net Asset Value, or NAV, grew by 20.6% in 2012 outperforming the MSCI World Index denominated in euros – the benchmark against which we measure our performance – by 9.2%.

[Wildbilly]

Our investment approach

EXOR’s goal is to beat the MSCI World Index in the long term through the increase in its Net Asset Value (NAV). EXOR invests in diversified sectors, mainly in Europe and in the United States, focusing on few global companies.

EXOR is an active shareholder, combining its entrepreneurial approach with a sound financial discipline. It brings in finance for the development of its companies, to improve their competitive position and profitability, and maintains a constant dialogue with the top management of the companies in which it invests, while fully respecting their operating autonomy: that is why EXOR’s managers are members of the Boards of Directors of these companies.

[Wildbilly]

EXORF Insider Trade History vs. Price

Insider Trade History vs. Price




http://www.gurufocus.com/insider/EXORF

[Wildbilly]

Exor full-year 2012 net profit was 398.2 mln euros
7:50 AM ET, 04/16/2013 - Reuters

MILAN, April 16 (Reuters) - Italy-based holding company Exor SpA, which controls carmaker Fiat SpA, said Tuesday its 2012 net profit fell to 398.2 million euros ($521.01 million) from 504.2 million euros a year ago. Exor's net profit for 2011 included a one-time gain of 306.6 million euros from buying a stake in U.S. automaker Chrysler. The company's net asset value (NAV) rose by 1.3 billion million euros from the end of last year to 7.62 billion euros as of December 31, 2012.

Exor said it would pay a dividend of 0.3350 per ordinary share. Exor holds 30.01 percent of Fiat Industrial (FI.MI>, 15 percent of certification company SGS, 30.05 percent of carmaker Fiat and 69.27 percent of Cushman & Wakefield, a real estate company.

[Wildbilly]

The Agnellis Buy Their Way Into Europe '92

A little History

"I really won't be satisfied until I have a Nestle." That's how the patrician Italian industrialist Giovanni Agnelli used to joke with his close friends about his family's acquisitions in food and beverages.

It's hardly a joke anymore. While the Agnelli name has been almost synonymous with car giant Fiat, the first family of Italian capitalism is aggressively turning its attention to investments far removed from greasy auto assembly lines. In late November, an Agnelli investment arm bid $330 million for a controlling stake in France's Exor group, which in turn controls the $2.4 billion Perrier bottled water empire. That's only the latest buy in an Agnelli shopping spree that has ranged from yogurt to insurance to hotel management.

Going into the more unified Europe of 1992, the Agnellis see the need to hedge their bets on cars -- and on Italy itself. The family's flagship Fiat -- the Agnellis directly and indirectly control 41% of the group's capital -- faces unprecedented competition in its core car and truck lines. While Fiat's costs are among the lowest in Europe, the Turin-based group's lineup of new products is skimpy, just when hungry competitors such as General Motors Corp. and Volkswagen are rolling out hot models.

Not to mention the Japanese. Under an agreement cut last July, the European Community will gradually allow more Japanese cars into protected markets such as Italy's. Fiat's once-commanding market share in Italy has dropped to under 48% from over 60% only three years ago. In the same period, the company has gone from record profits of $2.6 billion to an estimated $500 million. Next year, says Agnelli, will be "very difficult." There's renewed speculation of a merger with France's Peugeot as a possible way out of Fiat's problems.

GALLIC GRAB. In the effort to redefine themselves, the Agnellis are moving fast to diversify geographically, too. For decades, the Agnellis have thrived mainly within Italy's borders. Now, the quintessential Italian business empire is reducing its exposure in Italy and gearing up for the rest of Europe. This move could foreshadow tough times for Italy as it limps along with crippling government debt, widespread political malaise, and anemic capital markets. "We have to invest abroad," says Gabriele Galateri, a former banker who guided IFIL, one of the family's companies, as it invested $1.3 billion over the past three years. "The potential in other European countries is unfortunately higher than it is in Italy."

In expanding their reach, the Agnellis are not relying on Fiat, whose sales of $49 billion are still heavily dependent on the domestic Italian market. Instead, the family is using a collection of investment vehicles bearing such names as IFI, IFINT, and IFIL. While these companies have some operations in Italy, they are the ones being used to gobble up properties mostly in Europe but also in Asia and the U. S.

The goal, advisers suggest, is to become a food and beverage titan in Europe on a par with Switzerland's giant Nestle. It's still open to question whether the Agnellis can manage such a disparate business on a continent-wide scale, or whether the notoriously low-margin food and beverage business will yield rich profits.

But for now, the Agnellis are looking like some of Europe's savviest investors. They've already proven their knack for making shrewd investments inside Italy. In fact, although the value of Fiat's noncore holdings are carried on company books at a measly $2 billion, they now have a market value of more than $9 billion, according to Francesco Paolo Mattioli, Fiat's top finance man.

Aside from buying properties outright, the Italians are breaking ground in strategic alliances in France and Germany. The Agnellis are teaming up with Germany's Metallgesellshaft on jointly owned Paris-based trading company Safic Alcan, which last year notched up $600 million in business, mostly rubber trading in the Far East. IFINT's control of Exor, with its 35% holding in Perrier as well as a portfolio of prime Paris real estate, gives the Agnellis added clout in the French corporate world. A 20% stake in Sardinia-based Meridiana, southern Europe's largest private airline, is IFINT's sole investment inItaly.

The Exor investment is an example of the Agnellis' growing interest both in food and in France. Through IFIL the Agnellis are now the key shareholder in France's No. 1 food and beverage giant, BSN, which last year chalked up $9.6 billion in sales. And BSN and the Agnellis have spent over $1 billion buying Italian food companies ranging from Sangemini, the country's largest mineral water concern, to Galbani, the leading salami and cheese group. Such joint investments now give the Turin clan control over the country's largest assemblage of food companies, with $3 billion in annual sales.

In many cases, the Agnellis are trading their commanding position in the Italian market for a piece of the action outside the country. French publisher Hachette, for instance, swapped shareholdings with Milan's Rizzoli Corriere della Sera publishing group, which is indirectly controlled by Agnelli companies. And Fiat traded its Italian telecom unit, Telettra, for 6% of French electronics giant Alcatel Alsthom and two of its subsidiaries. "The Agnellis," says Lazard Freres & Co. Chairman Michel David-Weill, "are first and foremost remarkably good partners for foreigners who want to do things in Italy."

IN THE SPOTLIGHT. The Agnellis' changing strategic focus may also be accompanied by a change at the top. According to a clause in the statutes of Giovanni Agnelli & Co., which controls the major Agnelli holdings, managing partners must retire at age 75. In Giovanni's case, that means 1996. And, company insiders say, the silver-haired magnate may abdicate even before then.

The diversification drive is putting the spotlight on the mild-mannered Umberto Agnelli. Over the decades, he has played No. 2 to his older brother, Giovanni. Right now, 57-year-old Umberto is the architect of much of the family's overseas, nonauto investments. In the drawing rooms of Agnelli courtiers in Turin and Milan, the talk these days is of his increasing responsibilities and powers. Says one Fiat employee close to both brothers: "Umberto will be king before too long."

Umberto's increasing power is shifting the emphasis at the group. He has more experience in Asia and Eastern Europe than his brother, who passes almost as much time in New York -- where he has a Matisse-filled Park Avenue penthouse -- as he does in Turin. The elder Agnelli recently told an interviewer: "All Umberto's links with Japan, his knowledge of Japan, and his responsibility for relations with Eastern Europe give him a different training to my own. My life has been Europe with America. I'm more Atlantic."

SCOUTING ASIA. Signaling the shift, the company is making its first moves in Asia, though from a much more modest starting point than in Europe. A few days after Umberto returned from Tokyo in November, Richecourt, a new Hong Kong-based venture capital group jointly owned by the Agnellis' IFIL, the Rockefellers, and France's Worms & Co., announced its first deal: a chain of clubs for business executives. And in the next few weeks, IFINT, the holding company that oversees the major Agnelli investment in the U. S., will be opening an observation post in Singapore. Says Gianluigi Gabetti, managing director of IFINT: "We'll pay a lot of attention to the Far East."

Even within the Fiat group, diversification is providing a lift. Such activities as robots, financial services, and chemicals will account for over 27% of sales this year. Says Dagmar Bottenbruch, auto specialist at Financiere Credit Suisse-First Boston in Milan: "If it weren't for diversified sales, Fiat would be losing money this year."

Even as the Agnellis acquire properties outside of Italy, however, they are selling off pieces of Fiat to help meet the enormous cash needs in the auto and truck divisions. Company insiders say that spinning off all or part of the retailing and insurance units is likely over the next year or so. Says Umberto: "In the next five years, our core business will need money. And yes, we will slim down." Flagship Fiat may be in for rough times, but the broadening of the Agnelli empire will help cushion the shock waves of Europe '92.

THE NEW AGNELLI EMPIRE

http://www.businessweek.com/stories/1991-12-15/the-agnellis-buy-their-way-into-europe-92

[Wildbilly]

Looking For Value In An Overbought Market?

(Excerpt}


Exor SpA (EXORF.PK)

The cheapest stock I know. Exor has a net asset value of better than €8 Billion yet trades for less than €3.5 Billion. The company owns 30% of Fiat (FIATY.PK) and Fiat Industrials (FNDSF.PK). Those shares alone are worth more than €4 Billion in the open market. Think that's good. It gets better. Exor's American depository receipts (ADRs) trade at $23.55 while its Italian counterparts trade at €21. The exchange rate is €1 equals $1.30, so the ADRs ought to trade at $27. You get the assets at a discount plus the currency arbitrage.

Summation

The search for yield and a flight to safety have left the consumer defense sector, and most of the market, overbought. But opportunity remains for those willing to look for value in unloved sectors of the market like European conglomerates. I think the companies that I highlighted above are excellent places to start looking for investment opportunities. Just remember, price is what you pay, value is what you get. Even the blue-ist of the blue chips will underperform if you overpay.

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Looking For Value In An Overbought Market? Try These Hated Conglomerates
Apr 16 2013, 13:22  | 10 comments  |  includes: BAM, BTI, EXORF.PK, FIATY.PK, FNDSF.PK, HSY, KO, L, LUK, MO, PG, REVNF.PK, VIVHY.PK
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Consumer Staples Are Overbought

The market as a whole is showing signs of being overbought. Specifically, dividend-paying consumer defensive names like Altria (MO) and Proctor & Gamble (PG) are priced for growth that simply isn't there. Part of this overvaluation likely lies with the current ultra-low interest rate environment, which has investors chasing after yield. And of course, part of this overvaluation likely lies with a psychological flight to safety after the great recession. After all, these are superior companies that can act as a safe haven in tough economic times.

Don't get me wrong. I'm not talking about shorting the most dependable dividend-paying stalwarts of all time. There is a huge difference between not buying Hershey (HSY) at close to 30 times earnings and actually selling a proven wide moat name like Coke-Cola (KO) at 21 times earnings. I think it makes perfect sense to hold most of these overbought companies trading at better than 20 times earnings simply because of tax implications and the fact that these are truly great companies worth holding for the long haul.

But I simply can't imagine putting new money to work in any of the above mentioned names at today's prices. Reversion to the mean, meaning market multiples in the range of 15 to 16 times earnings, will diminish future returns for investors who choose to pay up for these currently favored names.

Buy What Is Cheap Instead

I know my comfort zone when it comes to investing, which sounds nicer when you call it a circle of competence. I like to invest in conglomerates and investment holdings corporations that own stakes in other publicly traded securities. As I will highlight below, there are many instances where one can purchase these entire companies for less than the cost of just their publicly listed investments. Thus guaranteeing you a margin of safety.

What is the likely cause of this breakdown in the efficient market hypothesis? The most likely culprit is the equity yield curve, created by market participants who place a premium on near-term results over long-term performance. Many investment holding companies are owner operator businesses, such as Leucadia National (LUK), and the owners are really only interested in long-term results. While they have a history of shareholder friendly transactions like asset sales, spin-offs, and share repurchases to monetize the value of their investments, these transactions happen over very long periods of time. As such, there is no identifiable catalyst for share appreciation. And no near-term catalyst means no investment interest.

This lack of buying interest from the near-term obsessed investment community certainly helps to contribute to price mis-valuations. A second likely contributor is the burgeoning popularity of ETFs. Due to their multi-sector operations and sometimes limited liquidity, conglomerates and investment holdings companies are unlikely to be included in many of the ETFs that currently slice and dice the market into more and more focused sub-sectors. It is for these reasons that holding corporations can supply us with such obvious value stocks.

Specific Investment Ideas

Loews (L)

I've recommended Loews before. The company currently trades at a discount to just the value of its publicly traded investments plus cash. In addition to buying these assets at a discount, you also get the company's namesake hotel franchise and other investments for free. Not to mention a world-class management team to make future investments for you.

Brookfield Asset Management (BAM)

I like Brookfield so much I've written about it twice. At current prices, you can buy Brookfield for the value of just its investments and get a world-class asset management firm for free.

Vivendi (VIVHY.PK)

To give credit where credit is due, fellow SeekingAlpha contributor Ben Strubel did a better job of explaining this one than I can. Vivendi is a European media conglomerate that trades at an appealing discount to its sum of parts valuation.

Reinet SCA (REVNF.PK)

This company owns about 84 million shares of British American Tobacco (BTI), and a private equity firm that we used to know as Lehman Brothers, but now has a new name. It currently trades at a discount of about 15% to tangible book value.

Exor SpA (EXORF.PK)

The cheapest stock I know. Exor has a net asset value of better than €8 Billion yet trades for less than €3.5 Billion. The company owns 30% of Fiat (FIATY.PK) and Fiat Industrials (FNDSF.PK). Those shares alone are worth more than €4 Billion in the open market. Think that's good. It gets better. Exor's American depository receipts (ADRs) trade at $23.55 while its Italian counterparts trade at €21. The exchange rate is €1 equals $1.30, so the ADRs ought to trade at $27. You get the assets at a discount plus the currency arbitrage.

Summation

The search for yield and a flight to safety have left the consumer defense sector, and most of the market, overbought. But opportunity remains for those willing to look for value in unloved sectors of the market like European conglomerates. I think the companies that I highlighted above are excellent places to start looking for investment opportunities. Just remember, price is what you pay, value is what you get. Even the blue-ist of the blue chips will underperform if you overpay.

[Wildbilly]

Exor S.p.A. Holdings:

Holdings Declared shareholdings:

Company % of share capital

Cushman & Wakefield 69.48%

Juventus Football Club 63.77%

Almacantar 36.29%

Vision Investment Management 42.50%

Fiat 30.47%

Fiat Industrial 30.45%

Sequana Capital 28.24%

Banca Leonardo 17.4%

Banijay Entertainment 17.09%

SGS 15%

Economist Group 4.72%

Perella Weinberg Partners 2.00%

BTG Pactual 0.26%

[Wildbilly]

Exor S.p.A.

Exor S.p.A.   
 Type Società per azioni (Holding company)  
 Traded as BIT: EXO  
 Industry Conglomerate  
 Founded 27 July 1927 (IFI)  
 Headquarters Turin, Italy  
 Key people John Elkann (Chairman and CEO)  
 Products Industrial holdings  
 Revenue $109.152 billion (2011)  
 Operating income €1.953 billion (2010)[1]  
 Profit €137 million (2010)[1]  
 Total assets €78.71 billion (end 2010)[1]  
 Total equity €15.20 billion (end 2010)[1]  
 Owner(s) Agnelli family  
 Employees 42 (end 2010)[1]  
 Website www.exor.com