Markets & Finance

Tattinger Falls on Buyout News


From Standard & Poor's European MarketScope

France

Champagne maker Tattinger was down €37.50 to €333.00 as the company announced that its shareholders have sold to U.S. group Starwood Capital in a the deal that values the company at around €1.166 billion. Starwood Capital is thought to have tabled a very strong offer in the first round.

Liquor group Pernod Ricard was up €2.20 to €136.60 as market talk suggested that the company and Wender could be teaming up to acquire Taittinger's champagnes, worth between €500 million to €700 million. The bank ETC Pollak Prebon said the offer would be surprising, as the company is still finalising the absorption of British group Allied Domecq. However, the broker adds the move would be of strategic importance, leading the company to number two worldwide after rival LVMH.

Danone was down €2.75 to €85.10 after the company's shares fell 5.2% yesterday on profit-taking, but are still up 10.5% this week on speculation of a takeover bid from PepsiCo. The company said that it has received no contact from a potential buyer, but its shares remain in play as PepsiCo's board meets today.

France Telecom was down €0.49 to €23.85 after the newspaper Expansion reported that Spanish telecom Auna's shareholders Santander, Endesa and Union Fenosa have chosen the company's bid for around €10.6 billion, including debt, for its mobile phone unit. The financial daily also said that the company will pay around 50% in cash and the rest in shares in the deal, which possibly be announced today.

Germany

Drugmaker Schering was up €0.93 to €52.63 as it raised its outlook for the fiscal year. The group reported net first-half sales of €2.547bn, up 6%, and operating profit of €466 million, up 12%. The numbers are better than forecast. The company explained that this high increase is partly due to the sale of a 25% stake in oncology group Medac GmbH in June 2005.

Chipmaker Infineon was down €0.14 to €8.42, even as Standard and Poor's Equity Research upgraded the company to hold from sell, lifting the target to €9.2 from €6.6.

Porsche was down €6.36 to €661.14 after Credit Suisse First Boston lifted its target to €800 from €670 as it raises earnings per share estimates. The broker thinks the outperformance can continue as the company's sales performance continues to surprise on the upside.

Italy

Banca Antonveneta was down €0.51 to €25.19 as Dutch bank ABN Amro's offer for the entire share of the Italian bank ends today. The newspaper Il Sole 24 Ore reported that ABN Amro has received subscriptions for a mere 1.2% of the capital and it will probably withdraw its offer. The Dutch group is unlikely to maintain its stake in the company, not even as a minority shareholder, the paper writes. Sources close to ABN Amro indicate that it will probably tender its shares to Banca Populare Italiana's cash bid at €24.47 per share, the paper said, adding that ABN Amro will likely make an official decision on Monday. Banca Populare Italiana was up €0.10 to €8.77 on the news.

Britain

Compass Group was up £0.12 to £2.53 after The Times reported that the embattled contract caterer was under the spotlight yesterday amid vague whispers that Sir Gerry Robinson's new bid vehicle, Raphoe Management, may be eyeing it as a first potential target. Analysts believe that the company's recent travails have attracted the interest of private equity firms, but Robinson's intimate knowledge of the business, coupled with Raphoe's declared strategy of leaving shareholders of target companies with the bulk of the business, could give him an edge if he decides to pounce.

Telecom Cable and Wireless was up £0.03 to £1.52 after the company said that it is approaching the stakeholders of smaller peer Energis concerning a possible acquisition. The group said that it cannot be certain that a transaction will result and a further announcement will be made in due course.

Logistics group Exel was up £0.20 to £9.44 after the Guardian newspaper reported the word in London's financial district yesterday was that group had received a merger proposal not from postal services Deutsche Post or UPS, but Swiss-based logistics and freight forwarding group Kuehne & Nagel. Traders said Swiss group had been linked with Exel before. The company's shares rose 13.5 pence to £9.24 yesterday, their highest close since March 2001.

Nordic

Norwegian telecom Telenor was up 3.50 Norwegian kroner to 54.75 after the company posted second-quarter pre-tax profit and minority interests up 11% year on year to 3.325 billion kroner on sales up 9% year on year to 16.5 billion kroner. The figures were ahead of forecasts.

Mobile phone maker Nokia was down €0.21 to €13.01 as brokers downgraded the stock or cut targets following the group's results yesterday. JP Morgan downgraded the group to underweight from neutral and cut its fair value to €12.0 from €13.5. Deutsche Bank trimmed its target to €14.50 from €14.70, and maintained its hold recommendation. UBS lowered its target to €16.0 from €17.0, and kept its buy recommendation. Citigroup cuts 2005 earnings per share estimates by around 12%, and reduced its 2006 forecast by about 11%. The broker reiterated its recommendation and maintained its €13 target.

Mobile phone networks group Ericsson was down 0.30 Swedish kronor to 26.70 kronor, even as a pack of brokers raised their targets following the group's second-quarter results. Lehman Brothers raised target to 26 kronor from 25 kronor. Citigroup increased its target to 25 kronor from 22 kronor. UBS lifted its target to 32 kronor from 30 kronor. Societe Generale lifted its fair value to 26 kronor from 24 kronor. ABN Amro downgraded the group to sell from reduce but raised its target to 22 kronor from 20 kronor.

Netherlands

Royal Dutch Shell was down €0.42 to €24.87 after Aad Jacobs, the company's interim chairman, said the company was seeking a successor to him who was neither British nor Dutch to avoid upsetting the power balance within the oil major, the Financial Times reported. His comments contradicted earlier statements by Shell executives that nationality would not be a factor in the succession.


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