>> switzerland slams the door, a vote in favor of immigration curbs could hurt the economy and relations with the eu. ,> taking on the tech giants arriving in washington to call for a crackdown on tax avoidance. exclusive,erg l'oreal cuts its $32 billion stake. good morning. welcome. you're watching "the pulse" live from bloomberg european headquarters in london. >> also coming up, betting the

farm on burgers. toneed entrepreneurs trying turn the rural passion into profit. step for mankind, one giant leap for bloomberg television. we take to the skies to break down the business of zero gravity. >> first-come us with seven's relationship with the european union could suffer huge setbacks. the country has voted in favor of immigration curbs. >> hans nichols is in zurich. there has been a stern reaction from brussels. >> it was stern, it was swift. the question is, will brussels allow the swiss government to implement this referendum? they have three years to do so without a full renegotiation of that 1999 treaty that allows for the free movement of labor. this referendum passed 50 .3%. it was a margin of just 19,000 votes. you saw most of the support come

from rural areas and the german and italian speaking part of switzerland. here is the line from the eu. if they can do a situation where they make an a la carte negotiation with switzerland, if other countries within the eu make similar moves, they will be at more of a challenge. here was the quote last night from the justice minister. it is a change of system with wide-ranging consequences. we can't be sure how these negotiations will turn out. this is a populist expression in a country where the unemployment rate just came out at 3.5%. consider what would happen if takenl are referenda were throughout europe where unemployment is much higher. >> it is very telling to see the reaction from the other leaders and potential would be leaders. switzerland'snd orders and is a hot potato for

everyone. saw nigel frontage in the u.k., here was his statement. were the british people to be given their own referendum on this issue, the result to be the same but by a landslide. it is difficult to argue with his logic on that. we don't know what would happen if these come to popular contest in europe. we will see when we have european elections later this spring. >> thang q so much, hans nichols. >> the french president josh three-day visit to the united states begins today. politics, taxes and big tex topping the agenda. manus cranny joins us now with more. the significance of this trip is actually not to be belittled. huge issues. with a president that is so embattled at home, he is going to want to make his mark in the u.s.

>> he has the lowest setting president ratings on history, unemployment as a 15 year high, and he is perceived as the millionaire taxman. i think this is very much about statesmanship for him to try to reflect backwards at home. it is about being seen as more pro-business. it is his first state visit since 1996. i think there is two sides to this. he wants to carry favor with obama on the g 20 referent around tax and harmonization of tax. at the same time, he gets a free trip on air force one by the way and a black-tie dinner, and he gets to go and lobby the technology community as well. >> you mentioned tax on the agenda. what is he going to lobby? the industry ministry in france was saying, they may kick out google if they don't -- privacy

data. >> yahoo! is about to take part in this operation out of france and relocate. there is a whole european basketcase of tax differentials. it is about trying to say, at some level there is an openness. the debate is this, they are going after the tax disclosures -- they are quite different. you have google saying they made a revenue of $192 million. there is a lot of work to be done. he has got to show himself to be open to business. >> he is trying to per strata himself as being pro-business. one, he is air force lending presumably on a french plane. >> and then he will get on air force one. d.c. to?he sea to --

franthink it is either san or one of the memorials he makes a trip to. get someone else to pay, that is what i say. >> let's talk about a bloomberg exclusive. nestle is reducing its $30 billion stake in l'oreal. shares in the cosmetics company up-to-date. >> caroline hyde is here with the latest. it is a hefty stake that nestle owns in l'oreal. >> it is about one third of the entirety of l'oreal. no wonder shares are reacting so much. you see l'oreal up some 4%. it is the best day since april on the back of this story. it is all about the way in which nestle might be reducing the size of its stake. it has held it since 1974, a nice little earner. about 10% of nestle's operating profit each year. reason the, the shares are rising so much is that l'oreal shareholders are hoping l'oreal itself might buy

back that stake. they might then cancel those shares, remove them from the market and boost the value of all shares already existing. it is a complex relationship between nestle, l'oreal and the family which holds another third. it is going to take some years but it could start happening as restrictions on the share sale >> that has been in place for a while. what happens next? that is why the timing is such. >> it is indeed. april is when the family that holds about one third of l'oreal would no longer have the right to first refusal. it comes a little bit easier to sell the shares. the reason it is in nestle's interest is that cosmetics is not a long-term strategy. it doesn't fit with their nutritional health strategy. the investment and has come a 30% stake, ties up capital. they could use that money.

maybe they could take that chunk of cash, worth more than 20 billion euros, about $30 billion, maybe a bit of m&a could be in the air. the chief executive has said before, it makes sense for us to buy back the shares because it would boost our earnings and there are no real synergies between nestle and l'oreal. it seems to be a win-win. >> caroline, thank you so much. we are watching also barclays today. 24 hours away from the ceo's presentation to investors as a report says barclays may continue to cut back on investment banking. >> ryan chilcote has the story. >> they are going to cut back the investment bank by 1/5. it is going to sell off 150 billion pounds worth of loans and toxic securities. it is going to cut thousands of jobs in an effort to reduce costs by 1.7 billion pounds a

year. that is according to the sunday times. that is probably affecting the stock this morning. this is a really simple thing here. anthony jenkins needs to approve returns. you take a look at what he is expected to announce tomorrow -- operational profit, several billion dollars worth of it. net income, a few hundred million. why? legacy problems, most of which are inside the investment bank. the idea is to reduce the problems that the investment , thatthe legacy issues make this more of a retail bank. that is one where you can try to improve the bottom line. >> barclays also reported that it is probing the leak of thousands of clients' personal data. how likely is that to affect the bottom line? >> i don't think investors think it is a huge financial issue. it is a reputational issue. that barclays' reputation anthony jenkins is going to try

and rehabilitate tomorrow when he gives his annual presentation. from that perspective, it is not at all helpful, particularly considering he intends to increase bonuses by about 10%. sensitive times at the banks, in particular barclays, still criticized for excesses within investment banking. tomorrow, anthony jenkins is going to have to summon all of his powers to sell some of these changes. >> we will leave it there. thank you very much indeed. magazine has interest from others. david tweed has been looking at the business in the german capital. walk us through how much money we are talking. >> we are talking about $400 million for forbes magazine. to $400 seeking up million which is about twice as much as they expect a magazine

to go for like that. most go for a different multiple. one would expect about half that price. forbes has been emphasizing the fact that it is not just forbes magazine on the block. it is a worldwide brand. they do conferences, they lend their name to property developers. there are three main bidders according to people familiar with the talks. none of this is confirmed but it does look like there are three main bidders. fosun group from china, spice global from singapore and from here in berlin axel springer. fosun group already has a mission ship with forbes. the spice group is looking and axel springer publishes the russian version of forbes. they all have an interest here. suedn't forbes also being by the saudi prince and how will that affect the sale price? >> that is absolutely right.

he has sued forbes. back in april last year, he sued because forbes came out and said that he wasn't worth as much as he had been in the past. he sued them for defamation. the question is, if that goes ahead and that goes against forbes, who will pay for that? the new owners? according to spice, they were trying to get the forbes family to foot that bill which could be as much as $450,000. back to you. >> david, thank you so much. >> what else is on our radar? nokia, one of the biggest gainers on the stoxx 600 has settled its patent dispute with rival htc. the taiwanese firm has agreed to pay royalties as a result. >> five-month rally lifting the investment record. his recent bets on twitter and jay-z.com helped

his public amity. 41% whilem rose warren buffett -- 57% jump in profit for the last quarter. it is confirmed as a four-year target. it is continuing to lag behind its rival. is now japan's least profitable major carmaker. >> coming up, a french liaison. resident hollande arrives in the u.s. today to meet with president obama. what can he learn from the u.s. about revitalizing the french economy? ♪

>> welcome back. francois hollande's three-day visit to the u.s. begins today. >> for the first state visit by a french leader in 18 years, what is on the agenda for hollande's meeting with president obama? let's try to find out. we are joined by a professor from the american university in paris. sounds like a good person to talk to. good morning. we are in a situation where domestically, hollande is very unpopular. he is trying to reinvent himself as being pro-business. when he goes to the united states, what is he going to want to achieve? bring a newto center of innovation here to france to try to take advantage

of french high-tech capabilities and tremendous knowledge in engineering and other high-tech matters. he is going out to silicon valley to talk to the giants there, to see what he can try to arrange here in france. the problem is, he is already demanding some $1 billion in taxes from google, which he says google owes, something like $225 million from amazon. he has a bit of a contradiction. plus the taxes on millionaires. he has a bit of a contradiction to overcome. if he wants to attract investment which has gone down ,omething like 73% last year then he has got to do a hell of a lot to begin to attract american multinationals here. >> we are kind of portraying

this as maybe a little bit of an exercise to get tips from the u.s., become more business-friendly. if you look at france, usually the president is arrogant and there is nothing more they hate than getting a lecture from the americans. >> that is right. hollanded work against if he is seen as being obama's poodle like tony blair was bush's poodle. he has to come out strong. valuesto assert french but he has to show what france is capable of. that i think is going to be played out in the security sphere more than in the economic sphere. the united states is the gate to what is called the rebalancing or pivot page. that is going to take resources away from defense in europe, some 15% of defenses are going to be cut in europe. the united states wants france to pick up the tab there as well as germany and the other european states to build up a

stronger european defense component. importanty it is also , both to get closer u.s. economic ties but also even more importantly, security ties. >> i think that probably is going to be part of the agenda. i am curious about how hollande is perceived both domestically and internationally. is he seen as the guy who puts through the millionaire's tax? -- a word that is thrown around in the united states, a socialist? how seriously do they treat him? perception is important in politics. how is he perceived on the other side of the atlantic? >> i am afraid he is perceived very negatively. precisely because foreign investment figures from last year were down something like 77%. that is already a statement.

he is going to have to come around and change some of his policies to make the french economy more diversified, to make it more flexible. this is going to be a real challenge for him. ironically, going to silicon valley he is following and sarkozy's footsteps to a certain degree. he is already showing that he is moving towards the center more than the left. on a serious point, syria, spying,s., and is a what is one thing he will deliver in the u.s.? is,he most important thing andce intervened in mali the central african republic. that is the war on terrorism.

the united states has provided drones and some logistical support for those operations. france would like more from the u.s. on that. on the other hand, france is the only actor really engaging in the war on terrorism. germany is basically neutral. the brits are beginning to cut their defense spending quite substantially. draw the americans and the french closer together. on the other hand, they need to cooperate in syria, iran and ukraine right now. those three hotspots are dangerous. ukraine tensions could become more violent. syria obviously, there has been no resolution to the crisis. iran still threatens a nuclear capability if a compromise is don't work with a new government. france's role in that security and political sphere are

absolutely crucial. that is what france will add to the discussions in order to get american investment. they are not going to attract american investment unless they change their policies. >> for the moment, they are attacking no investment. thank you so much. come, notill to gravity, no problem. we are going to see how one company is preparing space tourists for a life in zero g. cory johnson is having some fun. ♪

>> welcome back. it is time for a look at today's hotshots. it was a dramatic end to a dragracing california. -- and caughtrt fire as it crossed the finishing line. spectators were shocked as the vehicle burst into flames at high speed. miraculously, the 48-year-old driver walked away. >> lucky man. , he and hisrs ago team tried to reach the south pole. a group of freshmen have completed the same track. it took them 105 days, pulling sleds and equipment for an average of 17 miles per day.

>> let's trek across the studio. manus cranny standing by at the touchscreen with more on the markets. >> these equity markets, the data is getting trumped in paris. industrial production missed in france. it is an individual stock driving the paris market higher. it is the least invested place anywhere in the world over the past year in terms of drawing funds in. italy also saw a mess in terms of their industrial production, declining by 0.7%. the issues are very much at play. in terms of valuation, europe is trading below america. 14 times at about earnings. america trades over 15 times. the japanese yen is rising, short positions dropped the most since november. back to you. >> thank you very much indeed. up next, the race for space.

we take to the skies to check out the company helping terrorists prepare for the ride of their lives. >> just a reminder, you can follow us both on twitter. we are back in two bang. ♪

>> welcome back to "the pulse" let from bloomberg's european headquarters in london. i am francine lacqua. here are bloomberg's top headlines. switzerland voted in favor of new immigration curbs in a national poll. the government has three years to implement the new rules which will primarily affect workers from the european union. swiss leaders warned that the decision could undermine the economy and sour relations with the eu. the eurozone's new chief banking regulator has warned that some of the region's lenders have no future. some banks should be allowed to

die, she says. she wants to weaken the link between governments and banks. putinn president vladimir made a surprise visit to the austria house in sochi last night. andvisit came on the day austrian won gold in the men's downhill. it was austria's first gold medal at sochi after winning no medals at all four years ago in vancouver. for more on the winter olympics, let's welcome ryan chilcote. worth, to each't country, the same. if you are from one country, the government pays you a bit more money. where is it most valuable to have a metal in? >> the example i like to use is jenny jones. she comes with a bronze for britain. she got that bronze in the snowboard slope style which is where you are judged on time and tricks. you work really hard to get there. she has been flipping burgers, making doughnuts.

what does she get? the metal itself, if you melt it down -- we have to do this at bloomberg. it is not worth an awful lot. a gold medal is mostly silver, about half a kilo of silver and a few grams of gold in there. this is worth about $600. she has even less than that if she melted down. written's first metal on snow. you would think the u.k. would reward her handsomely. incorrect, they pay zip. better for her if she was from russia. they pay $113,000 per gold medal. italy paid $189,000. maybe you should have been an athlete. them --er is has asked kazakhstan. they haven't scored just yet. >> a quarter million dollars whether it is gold, silver or bronze? like that is for a gold. it is a hefty sum.

it is a way for countries to incentivize their athletes in addition to the national glory and endorsements and all of that. >> some athletes actually switch countries. >> it is a quite common practice. anfect case in point is athlete who will be competing for kazakhstan later this week. she is a by athlete. she hoped up back in 2010. he for that she was with russia, belarus, then went back to russia before joining kazakhstan. there is a south korean speedskater who chose the united states and russia because it is more financially lucrative. >> interesting. ryan chilcote with the latest on what the gold medal is worth. guy, back to you. >> some of those snowboarders is certainly defy gravity. let's talk about it. richard branson's virgin galactic it set to make its maiden voyage this year. people who have bought a $250,000 ticket may want to get

back, sized to the feeling -- want to get acclimated to the feeling first. that is where the zero g corporation comes in. cory johnson went to check it out. >> i am cory johnson and right now this is one of the most enjoyable moments of my life. but it always was and that way. just a few minutes ago, i looked like this. i am down in cape canaveral on my way to experience zero gravity with a company called zero g. exactly the wrong person to be doing a zero g flight. >> zero g has recently partnered up with richard branson's virgin galactic for passengers who have already purchased the gets on one of his suborbital flights to get acclimated to the experience of weightlessness. its serviceoffers to anyone else who will pony up the $5,000 for the privilege. here is how it works, the plane climbs to 24,000 feet and goes

into a series of parabolic arcs. the aircraft climbs at an extreme angle, 45 degrees. then, at 34,000 feet it begins to dive and equally extreme angle for half a minute. at that moment, passengers experience weightlessness. then they do it again and again. there is a reason this lane is known as the vomit comet. >> actually less than 4% of our participants get sick. it is very rare. >> therese is one of our zero g guides and i need some numerical handholding here. >> now that it is becoming more of a reality, these companies are starting to talk about training and they are bringing their customers on board. it is really a wide-open market being created now with the commercial space. >> that brings us to where we all started.

this experience comes at a price. a virgin galactic ticket costs $250,000 for about six minutes of weightlessness. that is $694 for a second. zero g is for charging $5,000 ahead for 7.5 minutes of weightlessness. that is only $11 a second. zero g has its eyes on more than space tourist and thrill seekers. there is big money looming from nasa and several companies are vying for a loop the contract from the increasingly outsourced space agency. >> the government space race is over. the private corporation capitalists space race is on. it is all going to be private companies now. >> right now nasa is paying the russians about $70 million each time a u.s. astronaut hitches a ride to the space station. a private company says it will

charge $90,000 for a suborbital flight but only has room for one passenger. is in the jeff bezos testing phase for his company, blue origin. he hopes to take three astronauts in their new capsule. the odds of that working, before i could figure that out, we are back on the ground. paying $5,000 might seem like a lot of coin but think of the extra perks. you get to keep the flight suit. then there is the set of twitter pictures that make you the envy of your friends. can you really put a price on that. me, one giant for leap for bloomberg television. >> i have never seen anyone look so happy. >> i so want to go. really, really jealous. absolutely amazing. seey airshow you go to, you the zero g planes. never quite managed it. ofy johnson gets in ahead

me. >> you are next. >> definitely. booking my ticket now. 7.5 minutes, that will be fine. let's move on. bring ourselves down to earth. that is where we find nissan this morning, reporting a jump in profits for the last quarter. it is confirming its full-year target. it slashed forecasts three months ago but we are continuing to lag behind rivals when it comes to japan. it is now the country's least profitable major carmaker. that's find out what is going on. the weak yen certainly a factor. you need to set this company against its peer group. >> two years ago, it was the winner. it preempted the yen, started shifting production abroad. they were able to research after the fukushima natural disaster at home. they only have about a quarter of all cars produced at home now. whenmeans two years later,

the yen suddenly begins they are not getting so much bang for their buck. they are not getting as much money coming their way as toyota which is forecasting a record profit or mazda who are being helped by the weakening yen. they are also getting a double whammy of emerging market exposure. they are exposed heavily to thailand, indonesia, russia. not bringing as much money home. also, they are getting market share in the u.s. but they are paying for it because they have very high incentives. they boosted the incentives by about 20% overall in january. you up sales but you sacrifice your profit margin. that is why the profit margin is just 3.3% of sales making them the least profitable amongst their peer group. >> they almost have superhero powers and japan. he is going to need some of those superhuman powers. what is he going to do? he is really making big

overhauls in terms of the management. he has ended the chief operating officer as both rental and nissan. he has recruited more the tenants to start directly responding to him, get in charge of the supply chain, make sure marketing is under control. it is all about these new models they are bringing out. they are not quitting on emerging markets. the are resurrecting from 80's. , that is indonesia going to take time to build market share. they also have the high-end under control. and aave infiniti there small suv in the u.s.. it is going to have to bear with them. investors need to hold out until they see the investments they have made in the emerging

markets records. cracks thank you very much indeed. coming up, betting the farm in this week installment of our special series on entrepreneurs. we look at a gourmet meats start up. we will see you in a moment. ♪

>> it is time for the second part of our series, the entrepreneurs. last monday we looked at an energy company that sells home where 10 hipsters. for this addition, we need a couple hoping to go big with gourmet burgers. anna edwards now reports. >> the dream when we started was not to stay a small business. it was to be a national brand. they quit their jobs in london and dreamed of setting up a business in the countryside making burgers. five years on, they are trying to get these london media booth a little bit muddy. deals with three

major retailers and branching into other meat products. when the supermarket tesco came knocking, they realized they didn't want growth at just any cost. >> first thing is first, you sit down and do the figures. it didn't look commercially like a sensible move. it was a brand move, what were we trying to do? we felt like it had been five years starting here on a farm de, it wasn'ttra to go to tesco. >> maranda says muddy boots is still not profitable. so how is it funded? she says startups need alternatives to bank. go the back and route. we met some great guys. >> now the company is about to embark on a new let's muddy challenge. high street retail. >> we just strongly believe it. we like the shops that are doing something different and we were finding them. that was giving us the confidence to say, nagel we will

just sell it ourselves. >> they hope their retail venture can turn rural passion into profit. anna edwards, bloomberg in the british countryside. >> let's continue the conversation on entrepreneurs. what we want to know is when should a startup seek funds and when is the right time to sell out? >> we are joined by the ceo of angel capital group. muddy boots decided to turn down tesco and go a different way when it comes to the financing of their business. this is one of the most obligated things that startups have to deal with. the initial bit of money getting going is quite easy but then it is how you stay your business. big a problem is this for companies right now? are there ways we can make it work better? >> it is a big rub him.

theicularly businesses at early stage where maybe it is a technology that needs to be developed. the company will take a year or two to become profitable. bank loans are not really suitable. one of the possibilities is to go find an investor. the company has time to really build and develop its content, its business. that could be a win-win situation for the entrepreneur and the angels. >> there is also crowd funding. how do you find an angel investor? >> that is tricky. angel investors don't wear badges. they are not easy to see. you have got to find them. a lot of them grouped together. they create syndicates. they join angel networks. the visible groups and syndicates and networks are on the web sometimes. you can track them down. they are quite hard to get through. you have to have a very compelling business that can show great capital gain potential for investors. >> not all companies are created

equally and some tech companies, some are lifestyle companies. as angel investors scan the landscape and look at the start up universe, how do those two compare? is lifestyle investment something that becomes more risky? is tech more risky? are the metrics different? areasically companies that suitable for angel investment, the top 3%, these are high risk businesses. they do need money for developing their products and services before they can go out and get proper sales. that is high risk, not suitable for debt-financed. you have to have a highly scalable idea of business to attract angel money. we are looking for a a 10 times return on our money. >> a burger company, i can make burgers. start a burger

committee tomorrow, be selling three days later maybe. if you are on the retail side. a lifestyle business is not interesting really to the angel investors. >> do you need scum kind of mentor? i would be afraid -- some kind of mentor? i would be afraid of being a meeting with you and being faced with a shark. how do i protect myself? >> if you are a startup and you have some great business opportunity that you have thought through, getting somebody in your industry to give you advice and support, figure out how to take it forward and raise the money you need, is a good ice to start. they may go on and invest in the company themselves. they will reach a state where that individual hasn't got enough capacity or funding to take the business forward themselves. they have to bring other people in. having that mentor in the early days is great. when you raise an angel syndicate round, you have people from the angel syndicate that want to come in and take on that role. join your board and help you build your business. we are in line to your interests

completely. we are not the sharks. as long as we can collectively sell this business, then you will do well as the entrepreneur and hopefully we will as well as your investors. >> we believe it there. fascinating stuff. thank you very much indeed for your time. the cutting edge of renewable technology that generates electricity from waste who has speak to a ceo raised funding to increase energy efficiency. that story, up next. ♪

>> welcome back. you are watching "the pulse." time for today's new energy. whichnewable energy unit concerns heat into electricity is our concern today. alphabet energy has created thermoelectric technology which allows instant savings and efficiency for oil and gas companies. could this mean the consumers will be able to charge their phones using their own body heat? alphabet energy ceo and founder matthew has raised $30 million in vc funding. he joins us from san francisco via skype. energy recovery is not new. what are you doing that is different? >> alphabet energy delivers

products that improve fuel efficiency. initially we are doing this for the mining, oil and gas industries. it is an interesting time to deliver fuel savings to those industries. we have an approach based on a platform technology we have developed based on silicone terminal electrics which makes our products much more reliable thanuch faster on payback products that have existed in the past. n of a newoductizatio technology that enables these industrial customers to access their waste heat and view it as valuable for the first time. >> it is solid-state. how malleable is it? how easily can i attach this and retrofit this to existing energy outlets? >> alpha that manufactures these devices. this is one of them right here, a thermal electric panel. these are solid-state devices by

convention. what we also do is configure those into turnkey generators that we can deliver to -- for instance, factory furnaces that generate power. the form factor of our core technology, the thermoelectric chip, can vary. the platform technology that can go into virtually any heat source. in addition to the product that we are delivering to mining, oil and gas, we are also working with major companies as partners in industries like steel and automotive to deliver products and turnkey generators to those customers as well. and whatficient is it is the potential scale of the market? >> interesting question because since you are competing against nonconsumption, because there is nothing else that you are doing with your waste heat, efficiency is not the most important thing

to these customers. it is reliability, simplicity and roi. when it comes to a mining company, this is an interesting time in mining because commodity prices are depressed and a lot of mining companies are operating at lower margins or even negative margin compared to where they used to be. fuel saving at high roi is going to be towards the top of their list of investments to make. we are seeing a lot of mining companies and oil and gas lookings as well, are to use alphabet's products. in some cases, they have already signed up to do so. >> matthew, great product. thanks for staying up in the middle of the night to talk to us about it. llin, ceo of alphabet energy. >> for those listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming up.

francois hollande arrives in my sink and d.c.. --are talking to the ceo of and the swiss government is curbing immigration. we will talk to the director of science industries in zurich. ♪

>> taking on tech. the french president heads to washington to call for a crackdown on tax avoidance. door, aerland slams the vote in favor of immigration curbs could hurt the economy. >> saudi arabia's billionaire prince is beating buffett. that story is coming up. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s. i am guy johnson. >>