Markets & Finance

Sanofi-Aventis Rises on Rumors of Patent Win


France

Drugmaker Sanofi-Aventis was up 1.50 to 64.05, as a company spokesperson declined to comment on rumors that the company and Bristol-Myers Squibb have won a case in Canada for their Plavix blood thinner treatment. The parent's companies, Aventis Pharma and Aventis Pharma S.A., are bringing suit in the Federal Court against Novopharm for patent infringement of Canadian patent 2045433, which covers Lovenox(R).

Air France-KLM was up 0.34 to 13.92, after French newspaper La Tribune reported chairman and chief executive officer Jean-Cyril Spinetta saying the group is ahead of its business plan. According to the report, Spinetta expects the company to achieve savings of 580 million by 2008 to 2009 compared to a previous target of 385 to 495 million.

Grocerychain Casino was up 3.20 to 66.30, after Deutsche Bank sticks to is hold recommendation with a 60 target price, following the management changes announced Monday. The bank attributes yesterday's near 4% share price rally to expectation that newly-appointed chairman and CEO Jean-Charles Naouri will clean up the company's asset structure to prepare the company for a merger. However, Naouri says his appointment will not change the structure of his holdings. Naouri controls 63% of Casino voting rights via the group Rallye. The Financial Times reports that Naouri expects his extra boardroom powers to accelerate decision making and reinforce the link between operational management and strategy

Britain

Mobile phone service provider MMO2 was down £0.06 to £1.17, after the company said growth will slow next fiscal year as the British market approaches saturation. The company sees mid-single-digit percentage growth in British mobile revenues for the year ending March 2006 compared to 12% to 15% growth for the current fiscal year. The latter is in line with previous guidance. For Germany, the company anticipates fiscal year earnings before interest, taxes, and amortization margin in the high teens and strong service revenue growth. For Ireland, it expects service revenue growth in the low teens. The company said the full year earnings before interest, taxes, and amortization should be in line with analysts' estimates of £1.72 billion to £1.78 billion. Dresdner Kleinwort Wasserstein thinks the story is still positive and says that today's weakness represents a good opportunity to buy.

Easyjet was up £0.15 to £2.13, as the discount carrier reported first half of 2005 operating profit in line. The company said first-half trading conditions have remained stable with revenue per passenger expected to increase by 1% to 2% year-on-year. The airline anticipates 24% growth in passenger numbers compared to the first half of 2004, and said that gross cash on balance sheet is expected to be £600 million in the first half. It added that operating margins should be broadly in line with last year.

Video-game publisher Eidos was up £0.13 to £0.58, after the company agreed to a takeover by Elevation Partners private equity group. The offer is for 50 pence per share, or £71 million. The company's board unanimously recommends the offer to shareholders. Elevation Partners is a U.S. group formed by Silicon Valley investor Roger McNamee, also led by rock star Bono, among others. Yesterday, the shares soared on a press report in the Sunday Telegraph that British publisher SCi Entertainment might be poised to make an 11th-hour bid for the company.

Music group EMI was down £0.04 to £2.40, as global recorded music sales were down 1.3% to $33.6 billion last year, according to the International Federation of the Phonographic Industry. This is the smallest decline in three years, although digital downloads continue to hit.

Germany

Retailer Metro AG was up 0.66 to 41.46 after the company reported 2004 net income rose to 827 million compared to 768 million the previous year, and 2004 earnings per share were at 2.53 compared to 2.35. The firm's 2004 earnings before interest, taxes and amortization was at 1.81 million compared to 1.59 million. The company is to pay unchanged dividend of 1.22 for preferred and 1.02 for common shares. Sales in 2004 rose 5.3%, net debt fell to 5.7 billion compared to 6.2 billion the previous year. The company expects earnings per share increase in 2005. It reported fourth-quarter earnings before interest, taxes, and amortization of 1.032 billion compared to 941 million in the period the previous year. Extra food stores performed slightly better than expected with a loss of only 80 million which was nearly compensated from a worse than expected performance of Real. The extraordinary costs for the divestment and closures of more than 30% of the Extra food store network was higher than expected at 30 million. On guidance, the company stated only that it is aiming for earnings per share growth, which is quite imprecise. It said profit may increase by 8% to 12% this year as it opens more Cash & Carry stores while sales will rise 5% to 6%. Dresdner Kleinwort Wasserstein upgraded its rating to add from hold and raised its target to 44 from 40.

Linde, the industrial gases and engineering group, was up 1.45 to 53.77, after the company said it plans to step up cost-cutting at its two main businesses as earnings growth may slow this year. At its gas division, the company plans to start a new cost-cutting program that exceeds an ongoing one aimed at saving 150 million over 3 years. The company also aims to cut costs at its forklift truck unit. The company predicts earnings and sales will exceed those of previous years but may be somewhat slower than 2004. In the first two months, sales rose 9.3% to 1.3 billion with new orders up 10.4% to 1.5 billion. Forklift revenue rose 4.3% while sales at the gas unit rise 8%. At its engineering business, revenues jumped 36%. The company says it is continuing to look for smaller acquisitions at its gases division but rules out larger ones for the time being.

Wiring manufacturer Leoni AG was up 2.44 to 63.54, after the company reported it plans to raise its dividend and said its acquisitions will help sales climb to at least 12% to 1.4 billion this year and 1.5 billion in 2006. The new dividend is to be 1.25 compared to 1.15. The company said it plans one or two acquisitions of considerable size for 2005.

The bank Merck Finck said earnings before interest and taxes came in at 62 million, above estimates of EUR 60.8 million. It said unchanged earnings before interest and taxes guidance for the years to come is 7%.


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