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from Breakingviews:

Vivendi boosts shareholder credentials in GVT sale

By Fiona Maharg-Bravo and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own. 

Vincent Bolloré, Vivendi’s chairman, is doing right by his shareholders. The French media group says it has entered exclusive talks with Telefonica on the Spanish group’s 7.5 billion euro bid for its Brazilian business GVT. The French conglomerate spurned a lower bid from Telecom Italia. It might have squeezed a bit more from Telefonica, but has chosen the surest exit. That leaves rival bidder TI facing an uncertain future.

Vivendi says the Spanish bid is in the best interest of its shareholders. The offer is higher, with 3 billion euros more in cash and a lower execution risk than the Italian one, which was mostly in shares and required a shareholder vote. To complicate matters further, Telecom Italia’s Brazilian unit is also in play – Oi, Brazil’s biggest fixed-line company, says it is considering buying TI’s stake. Both offers included potential deals to distribute Vivendi content, which gave Telefonica a significant advantage on account of its larger, global footprint.

There were fears that Bolloré could have been tempted by a larger stake in TI, which would have somehow reversed the group’s strategy of shedding its telecom assets to focus on media and content. The Telefonica offer is still a bit muddled in that respect: it includes a stake in Telefonica Brasil, a third of which Vivendi can exchange for Telecom Italia shares - Telefonica has been a longstanding shareholder of its Italian rival. Still, at nearly 11 times this year’s earnings before interest, taxes, depreciation and amortization, Vivendi is getting a good price.

from Breakingviews:

Telefonica may have to inch higher for GVT

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

Telefonica is showing how much it wants to buy GVT. The Spanish telecoms group has given Vivendi a 24-hour deadline to accept a new 7.45 billion euro ($9.8 billion) offer for the French conglomerate’s Brazilian subsidiary. A competing bid from Telecom Italia is 450 million euros lower, has less cash and is more conditional. Still, Vivendi could yet wring more out of this auction.

from MacroScope:

Q3 rebound but at cost of price cutting?

A woman walks past a shop in Madrid

Manufacturing PMI surveys across the euro zone and for Britain are due. The emerging pattern is of an improving third quarter after a generally poor second three months of the year.

The UK economy continues to romp ahead – growing by 0.8 percent in the second quarter – but on the continent there are signs of a new slowdown. The Bundesbank now forecasts no Q2 growth at all in Germany and though the euro zone flash PMI, released a week ago, showed the currency area rebounding in July, that largely came at the cost of companies cutting prices further, thereby pushing inflation lower still.

from MacroScope:

EU cuts off Russian banks, puts ball in Moscow’s court

Russia's President Vladimir Putin talks to reporters during a meeting in Brasilia

True to its word, the EU agreed sweeping sanctions on Russia yesterday, targeting trade in equipment for the defence and oil sectors and, most crucially, barring Russia’s state-run banks from accessing European capital markets. The measures will be imposed this week and will last for a year initially with three monthly reviews allowing them to be toughened if necessary.

There was no rowing back from the blueprint produced last week – having already agreed to exempt the gas sector – and the United States quickly followed suit, targeting Russian banks VTB, Bank of Moscow, and Russian Agriculture Bank, as well as United Shipbuilding Corp.

from Hugo Dixon:

Euro crisis is sleeping, not dead

Euro zone policymakers may feel they can afford to relax this summer. That would be a terrible error. The euro crisis is sleeping, not dead.

The region is suffering from stagnation, low inflation, unemployment and debt. The crisis could easily rear its ugly head because the euro zone is not well placed to withstand a shock.

from MacroScope:

A turning point?

Emergencies Ministry members work at the site of a Malaysia Airlines Boeing 777 plane crash in the settlement of Grabovo in the Donetsk region

Could the shooting down of a Malaysia Airlines plane over Ukraine be a fundamental turning point in the crisis that has pitted Russia against the West? And if so which way – towards rapprochement or a further escalation?

Kiev accused militants fighting to unite eastern Ukraine with Russia of shooting down the Boeing 777 carrying nearly 300 people from Amsterdam to Kuala Lumpur with a Soviet-era ground-to-air missile. Leaders of rebels in the Donetsk People's Republic denied any involvement, although around the same time their military commander said his forces had downed a smaller Ukrainian transport plane.

from MacroScope:

Sanctions tighten

Britain's PM Cameron, Portugal's PM Passos Coelho, Germany's Chancellor Merkel and Finland's PM Stubb attend an EU leaders summit in Brussels

EU leaders failed to get anywhere on sharing out the top jobs in Brussels last night but did manage another round of sanctions against Russia.

This time they will target Russian companies that help destabilize Ukraine and will ask the EU's bank, the European Investment Bank, to suspend new lending for Russia and seek a halt to new lending to Russia by the European Bank for Reconstruction and Development.

from Photographers' Blog:

More than cojones

Pamplona, Spain

By Vincent West

“Have we vanquished an enemy? None but ourselves.”

- George Mallory, mountaineer.

“I think about my mother," says bullrunner Deirdre Carney.

"I don't think a lot of men think about that. It might be a woman thing… Women think about the loved ones that will be harmed by them being harmed.”

U.S. runner Deirdre Carney (R) talks to veteran runner Joe Distler following the seventh running of the bulls of the San Fermin festival in Pamplona July 13, 2014. The festival, a heady mix of drinking, dancing, late nights and bullfights, made famous by Ernest Hemingway in his novel "The Sun Also Rises", runs for nine days until July 14. Four runners were hospitalized following the run that lasted two minutes and fifty-two seconds, according to local media. REUTERS/Vincent West (SPAIN - Tags: SOCIETY ANIMALS SPORT ATHLETICS)

Carney is talking about her thoughts before running with the bulls at Pamplona’s famous San Fermin festival, where being harmed is a definite possibility.

from Breakingviews:

Why investors were taken in by Gowex

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

It’s easy to be wise with hindsight. Take the collapsed Spanish free wifi provider Gowex. The company raised several large red flags that domestic regulators and investors should have noticed. It took a foreign investor, specialist short-seller Gotham City Research, to uncover Gowex chief executive’s fraud.

from Breakingviews:

Gowex collapse leaves egg on many faces

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The collapse of Gowex has ramifications beyond Spain’s junior stock market for riskier companies. The Spanish wifi provider has said its chief executive admitted falsifying the accounts, days after investment firm Gotham City Research attacked the company. With Gowex held up as the poster child for Spanish entrepreneurialism, its impending failure will make life harder for other small firms.

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