Markets & Finance

Danone Shares Rise


From Standard & Poor's European MarketScope

France

Danone was up €3.25 to €93.80 on Friday. French Industry minister Francois Loos is reported as saying that the company will have to decide how best to defend itself against potential takeover bids. The government has been accused of protectionism after it sought to protect the company from a rumored takeover bid by U.S. drink-maker PepsiCo.

Clarins fell €1.80 to €56.20. Cheuvreux downgraded the shares to underperform from outperform and keeps €58 target price after the stock falls on squeezed margins guidance.

Total gained €1.80 to €219.50 after Gazprom announces its shortlist for the Shtokman gas field and the company together with Norsk Hydro, Statoil, Conoco and Chevron are picked as potential partners.

Germany

Deutsche Telekom rose €0.11 to €15.28 after a Wall Street Journal report that the company may announce whether it is keeping T-Mobile USA at its investor day next week.

Hypovereinsbank added €0.24 to €23.59 after Austria's Wirtschaftsblatt reported that a Saudi Arabia-based investor group is preparing a cash counterbid for the company by Oct. 17.

VW rose €0.68 to €45.20.A SEAT spokesman reportedly says the company has no plans to sell the unit, despite Der Spiegel reporting the company is mulling selling the unprofitable subsidiary as early as next year. In another development, the company is to be added to the FTSE All World Index, effective Monday.

Italy

Fiat fell €0.18 to €7.56. Ifil will remain at 30% of the company's capital as it will buy 82.5 million of the company's shares from Exor holding (at €6.5 per share) and has already also bought 5.5 million shares in the company (the equivalent of €41 million) directly from the market in the last few days, Il Sole 24 ore reports. Yesterday, Il Giornale reported that Ifil already bought 7%-8% of the company through derivatives as Ifil's stake in the car maker would slip to 22% from 30% after Fiat's debt conversion.

Netherlands

LOGICACMG (NL) fell €0.14 to €2.51 after the company confirms that it is in advanced discussions with Unilog which may or may not lead to an offer being made for the French group. The company says it is seeking an agreed deal and at a price of €73 per share.

Philips gained €0.12 to €22.22 after Rabo Securities upgraded the shares to outperform from neutral and raised its target to €27 from €24. Separately, JP Morgan reiterates overweight and price target of €26 after its analyst day feedback. Separately, DrKW reiterates buy and highlights the fact semis had lagged other divisions in meeting margin targets but that the company now plans to cut out €250 million of costs and reduce depreciation by €200 million by the end of 2006.

Oce added €0.51 to €12.78 after saying it expects synergies of €45 million by 2009 from its takeover of Imagistics and expects EPS to grow by €0.04 by 2007. The company and Imagistics have entered into a definitive agreement for the company to acquire all the outstanding shares of Imagistics for US$42 per share in cash, valuing the group at US$685 million. Oce notes the price represents 1.3 times EV/sales and 7.2 times EV/EBITDA. It expects the transaction to be completed by the fourth quarter of 2005.

United Kingdom

Smith & Nephew fell £0.13 to £4.83. Dresdner KW retains buy and says short-term factors are behind recent share-price weakness and could easily be reversed. Goldman Sachs downgrades to in line from outperform.

BHP Billiton rose £0.19 to £8.65 after Deutsche Bank raised its target to £9.60 from £9.10. It also raised its EPS estimates by 5.9% for fiscal 2006, +2.1% for fiscal 2007 and broadly +5% longer term on an upgrade to oil price forecasts. The broker says the company remains a sector top pick and reiterates buy.

Royal Dutch Shell was down £0.01 to £18.74. Deutsche Bank says the company is the No. 1 global refiner but in contrast to BP, it has been hit badly by Katrina. DB expects Gulf of Mexico production down for many months, with a US$1 billion revenue loss per quarter. Given the high profitability of this production, it suggests a 2% hit to group EPS until Gulf production resumes. Rates hold.

BP gained £0.05 to £6.52 after Deutsche Bank upgraded the shares to buy from hold. It also raised its target price to £7.50 from £6.75.

Man Group fell £0.19 to £16.38 after Citigroup downgraded the shares to hold from buy but raised its target price to £18.50 from £18.0, to reflect a higher valuation for the brokerage business. Citi notes the new target price is only 11% above the current share price and therefore offers limited upside. It advises a more cautious stance on the company ahead of its second quarter fiscal 2006 trading statement, given concerns over fund sales.


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