Markets & Finance

On the Move: Commerzbank, Man Group, Renault


From Standard & Poor's European MarketScope

Spain

ENDESA was up €0.41 to €21.38. Funds owning about 15% of the company have said they will accept the bid from Gas natural if the price is sweetened to around €25/shares, El Confidencial reported. At yesterday's closing prices, the bid was for €20.25/share.

France

SAINT GOBAIN was up €1.41 to €47.43. BPB has finally accepted the company's improved bid of £7.50 per share, valuing the transaction at £3.89 billion. During the five month negotiations, the company had increased its offer to £7.20 despite BPB's demands of £8.32. The FT said the company had been keen on an agreed deal because it has no plasterboard operations and is intent on keeping some of BPB's management. DrKW said the company's shares could rise due to stronger EPS accretion.

RENAULT was down €3.40 to €66.00. SocGen downgraded the company to sell from hold and trimmed its fair value to €64 from €75. Meanwhile, ING downgraded the stock to hold from buy and trimmed its target to € 75 from €84 following the company 's profit warning on its fiscal year 2005 operating margin. UBS said the margin guidance trim implies a margin of near zero in fourth quarter. The broker warned that it could drive a dramatic decline in core business profitability in fiscal 2006.

TECHNIP was up €2.40 to €46.46. The company announced nine months revenues of € 3.99 billion, +4.3%; operating income €200.3 million, +16.5%. Cheuvreux said third quarter net profit of €45.5 million was roughly in-line with its € 45.8 million forecasts but 8% above consensus. The broker kept its outperform rating and €56 target price.

Switzerland

ABB LTD was down CHF0.05 to CHF10.85. In a statement released Thursday, the company announced that it has won a US$220 million order to link the electricity networks of six Gulf states. It said this is its largest single order so far in 2005, and one of the largest substation orders it has ever won.

ROCHE was down CHF3.60 to CHF188.50. Shares traded at lower levels after news that the US FDA has asked the company for more data on 12 deaths in Japan of people who took Tamiflu. Apparently it has been difficult to interpret the cause of those deaths. Separately, the WSJ reported that India-based Ranbaxy is talking with Roche about licensing the rights to Tamiflu.

Germany

COMMERZBANK was up €0.70 to €24.05. On Thursday, the company sold 57.7 million new shares Thursday morning through an accelerated bookbuilding. Fully subscribed it would raise as much as €1.35 billion to help fund its €4.56 billion takeover of Eurohypo.

TUI AG was down €0.22 to €16.16. The company announces plans to sell bonds worth around €1 billion to help finance its acquisition of CP Ships. Many brokers are skeptical on the CP Ships deal. On Wednesday Morgan Stanley resumed coverage with an underweight recommendation.

LINDE was up €1.37 to €61.06. Shares gained on news that Commerzbank is raising funding through equity markets to help fund the Eurohypo deal. Earlier this week, analysts feared that Commerzbank could be selling its 10% stake in Linde, having said in the past that its stake in the company is not strategic.

INFINEON was down €0.19 to €7.95. The company said it is planning to spin off its loss-making memory chip unit by July 2006. The preferred option is a sale via an IPO. Reminder: the unit contributes about 40% of the company 's sales and the company is due to report fourth quarter results Friday. Analysts forecast negative EBIT of €78 million vs. a positive EBIT of €113 million in the same period of last year, according to a Reuters survey.

HOCHTIEF was up €0.59 to €34.78. The company reported third quarter pretax profit of €57.1 million, up from €45.2 million, beating forecasts of around €55.5 million. Net profit came in at €9.98 million vs. €17.36 million, also slightly higher than forecast. Sales came in at €3.61 billion vs. €3.20 billion, also beating forecasts.

Netherlands

VNU was up €0.65 to €26.99 after the company cancelled its plans to buy IMS Health. Shareholders refused to support the transaction.

CSM was up €1.33 to €22.20. Shareholders claiming to represent over one-third of the company's share capital expressed concern over the company's poor operational and financial performance. A statement released by the group, which includes funds managed by Hermes Focus Asset Management Europe, Franklin Mutual Advisors, Lansdowne Partners and other institutional investors, highlighted the lack of clarity surrounding the company's future strategic direction.

Nordics

NOKIA was up €0.17 to €14.61. The company is to buy Intellisync in the US for US$5.25/share cash. It expects the acquisition to be completed by the first quarter of 2006.

United Kingdom

GUS was up £0.26 to £8.76. The company confirmed its demerger of Burberry for Dec. 13, 2005, subject to shareholder approval.

BPB INDUSTRIES was up £0.29 to £7.70. The company has agreed to a £7.75 a share cash offer from Saint Gobain, valuing the company at £3.894 billion.

MAN GROUP was up £0.82 to £17.64. The company reported first half recurring net management fee income of US$327 million, +26%; brokerage net income US$5million, +19%. The board is confident of the outlook for the company and of strong growth in underlying earnings for the year. The company is to place the equivalent of 2.5% of its issued capital in new shares in a bid to raise £125 million to fund the Refco acquisition.

REED ELSEVIER was down £0.29 to £5.24. The company reaffirmed that it is on track to deliver on its targets this year of organic revenue growth of 5% and double-digit growth in adjusted EPS at constant currencies. It added that trading performance in three of its four divisions is on track to deliver on, or in the case of LexisNexis exceed, individual divisional targets for organic revenue growth. However, Harcourt Education is now expected to fall short of its target of high single-digit organic revenue growth. Fortis was disappointed that the company stuck to its top-line growth target, but kept its hold recommendation. Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)


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