But the competition also grow LBO firms to rethink their strategies

It is a world where great Oaks do not prevent pups to grow up: that of the LBO. Like the rest of Europe, the French market of "leveraged buy" out came this year in a race to the size. According to the barometer LBO Net established by Barclays Private Equity France, the number of acquisitions to leverage more than the 500 million euros of enterprise value (included debts) has quintupled in the first half of 2006 over the same period of the previous year, with 10 operations.

But at the same time, operations between 75 and 200 million euros of value soared by 67 in number (i.e. 20 operations) in the first half. Over the same periods in 2003 and 2004, this segment has even recorded a doubling of its operations, with a few transactions on known names, such as Marc Orian, group Bertrand or VVF Vacances.

Gain in "thickness".

Despite some significant transactions on the products of the sea of Heinz, parking of Eiffage, the monitor and Golden history, it is ultimately the core of the market, between 200 and 500 million euros of value, which, paradoxically, less rapidly increased in number: 40 compared to the first half of 2005 with 7 operations, as well as in the first half of 2004.

In total, the French market gains "thickness" with 107 LBO announced, or 26 more than in the first half of 2005.

With PagesJaunes (EUR 6.1 billion), TDF (4.9 billion) and may soon Vivarte, the trend towards Gigantism should confirm on the second part of the year. "The very large operations, competition is ultimately more low because there are fewer players." "And, in view of the raised Fund recently, some do not hesitate to look at investment opportunities clearly exceeding 10 billion euros of enterprise value, included debt," said Arnaud Bouyer, Vice-President in charge of funds for the France in Morgan Stanley.

But the competition also grow LBO firms to rethink their strategies. "Large funds are now seeking ways to escape large auction which may attract some 20 candidates." "Some consider more in more outlets of shareholdings in listed companies mounted in structuring a way to have an influence on the company's strategy", continued the business banker.

A card to play

A bit like a Colony, entered the capital of Accor in 2005, saw the title on the stock market advance of 55 since. Or a Blackstone, who had the opposite effect in Deutsche Telekom, and rôderait at the moment about Atos Origin.

The actors of the LBO copy hedge funds which do not hesitate to challenge the staffs of the listed groups "They specifically have a card to play differentiating"hedge funds"and working in a friendly manner with the managements in place", said Arnaud Bouyer.

This interest of the funds for publicly-traded companies also deals with average values. "Two thirds of the companies listed on France have less than 100 million euros of market capitalization, and earn little to be present in the stock market," notes Dominique Oger, President of the AtriA Capital Partners Fund.

The Bank business Goldman Sachs has also just add 114 values European, small and medium-sized, "LBO radar", which detects companies that are poorly valued on the stock exchange and which could therefore generate an interesting performance for funds.

Among them, many British companies but also a few French, as the manufacturer of luxury yachts Rodriguez and Club Mediterranee.