European Movers: Xstrata, ING, Ericsson

Plus more European stocks making headlines in Friday's market

by S&P MarketScope Europe Staff

UK

ROYAL BANK SCOTLAND Up GBP0.19 to GBP3.65... Texas Pacific weighs up insurer risk - Texas Pacific Group is poised to bid for Co.'s GBP8bn insurance arm - a move which would dash fears that private equity players are struggling to finance major takeover deals, The Daily Telegraph writes.

BARCLAYS Up GBP0.09 to GBP4.74... COO Paul Idzik set to stand down - Chief Operating Office Paul Idzik is to announce his departure, according to The Times. Says he will leave this year and is not expected to be replaced.

HBOS Up GBP0.29 to GBP4.94... UK house prices down 1.3% m/m in April - UK house prices have fallen by 1.3% in April m/m, while were 0.9% lower on an annual basis, according to Halifax. Halifax expects a mid single digit percentage decline in UK house prices this year.

RIO TINTO Up GBP1.37 to GBP59.73... Split-up an option - Chairman Paul Skinner says splitting Co. up is an option to extract the best return for shareholders if BHP's offer stays too low, The Sydney Morning Herald reports.

CADBURY PLC Down GBP0.03 to GBP6.37... New shares start trading today - Cadbury plc, the standalone confectionary business that starts trading today. S&P Equity Research starts with sell and GBP5.50 price target. Says the confectionery arm has returned to the market at a valuation which is unjustifiably high, even given the potential for Co. to participate in future industry consolidation.

XSTRATA Up GBP1.60 to GBP41.92... Speculation of bid for Macarthur Coal - Shares in Macarthur rose today on the back of market speculation that Co. could make a bid for the company, The Sydney Morning Herald reports. Notes Macarthur recently appointed a new CFO - Ian Fuller - who was previously group financial controller at Xstrata Coal. Adds the company said on 21 April that it had received an approach from a third party, but that no formal written offer had been made. JP Morgan ups target to GBP46.47 from GBP39.35; lifts FY08 EPS to US$7.86 from US$$6.78. Broker does not see Vale's bid returning and believes that estimate of 5-year volume growth of 35% vs 25% for peers justifies an overweight rating even excluding any other bid.

FRANCE

RENAULT Up EUR 4.12 to EUR 70.17... France car sales up 7.7% in April - Co. enjoys France car sales up 7.7% in April, according to the French Automobile Constructors' Committee (CCFA). New car registrations in France, across the sector, rose 4.6%. CEO Jean-Marie Hurtiger of Co.'s South Korean unit Renault Samsung has told Reuters the business plans to sell over 200,000 vehicles in 2008 vs 172,175 units y/y.

BNP-PARIBAS Up EUR 2.07 to EUR 71.32... Credit Suisse cuts target - keeps outperform - Credit Suisse cuts target to EUR 88 from EUR 89, keeps outperform. Argues Co. has had the most resilient earnings amongst French bank due to near absence of exposure to US structured credits and diversified business mix. Nevertheless, given downgrades in the CIB division and greater reliance on the US, says Co. is now valued in line with the rest of the sector. With a 12-month view, Co. should belong to any portfolio of European stocks, in our view.

AIR FRANCE-KLM Up EUR 0.93 to EUR 20.90... Oil off highs / BA sparks excitement - Airline stocks trade higher across Europe as WTI trades lower at c.US$112/bbl. Yesterday saw excitement in the sector following reports British Airways is in talks with two US airlines over a possible alliance.

ARCELOR-MITTAL Up EUR 0.77 to EUR 57.56... China Oriental stake sale / Stock options /JPM ups tgt - Co. sells its 17.4% stake (509.8m shares) in China Oriental to ING Bank and Deutsche Bank at HK$5.7938 per share. Co. unveils plans to award stock options to 500-700 senior managers. Plans to establish an Employee Share Purchase Plan, which will include a maximum of 2.5m Co. shares, with a maximum of 200 shares per employee. A discount of 15% will be applied for the first 100 shares and a 10% discount for the second 100 shares. JP Morgan ups target to EUR 67 from EUR 55, maintains overweight rating in a note on European Steel.