Markets & Finance

On the Move: Metro, STM, Air France-KLM


From Standard & Poor's European MarketScope

France

TOTAL (TOT) was up €3.80 to €222.90. Crude oil prices were firm. The market expects severe winter weather to hit the US ahead of Thanksgiving, according to a report by Weather Derivatives. Separately, the Bolivian government has announced a 90-day deadline for oil groups including the company, Spain's Repsol and Brazil's Petrobras to build LNG reservoirs in order to prevent gas shortages.

AIR FRANCE-KLM (AKH)was up €0.25 to €14.70. The company could acquire more shares in Italy's Alitalia in order to maintain its 2% stake, which would dilute to 0.3% if it does not take up buying rights, according to a report in Il Sole/24 Ore. The Italian flag-carrier is offering €1 billion worth of shares in an attempt to return to profit.

STM (STM) was down €0.12 to €14.63. Shares of chipmakers Samsung and Toshiba fell strongly after the news of a deal between Intel and Micron to produce flash memory chips raised concerns over increased competition and downward pressure on prices.

ALCATEL (ALA) was down €0.08 to €10.30. Soc Gen said it believes an offer by the company for Thales would fail to convince investors, as there is little industrial logic to it. Furthermore the broker thinks restructuring costs would destroy any value. It has a € 12.50 price target and kept its buy rating assuming there is no Thales deal.

Germany:

E.ON (EON) was up €2.08 to €80.58. The company ended talks with Scottish Power (SPI)on a possible takeover. The company had proposed a cash acquisition at a price of £5.70 per share, less special dividends, especially Scottish Power's intended distribution from the sale of its US subsidiary PacifiCorp. Separately, Commerzbank upped its target price to €93 from €86, and kept its buy rating.

DAIMLERCHRYSLER (DCX) was down €1.22 to €42.86. Deutsche Bank sold 25 million shares to institutional investors for € 43.20 per share. A book gain of around €300 million from the sale of the 2.5% stake was made. Separately, Lehman upped its target price to €50 from €48.

PRAKTIKER was up €0.59 to €15.09. The Metro AG unit started trading Tuesday. Monday, the company set the issue price for its IPO at €14.50 per share, together with the selling shareholder Metro and joint bookrunners JP Morgan, ABN Amro and Deutsche Bank. After adjustment the price range had been set at €14.0 to €15.0 per share.

METRO AG was down €0.14 to €37.17. After selling do it yourself unit Praktiker shares at €14.5, down from its original plan to sell shares at about €16.0 - €19.0.

INFINEON was down €0.14 to €7.78. Shares of chipmakers fell strongly after news of the deal between Intel and Micron.

United Kingdom:

BP (BP) was up £0.10 to £6.64. The company's Chief Executive Lord Browne will meet Tuesday with Gazprom chief executive Alexei Miller days after Gazprom said it wanted to buy a 50% stake held by the company 's Russian joint venture, TNK-BP, in Salvnet, the FT reported.

HILTON was up £0.04 to £3.42. The company announced the sale of 15 UK hotels to The Managed Hotels Unit Trust, with funding arranged by RBS Group, for £382.4 million in cash. The company added that it is also in very advanced discussions to sell the Edinburgh Airport Hilton to the same party.

SCOTTISH POWER was down £0.31 to £5.38 after it ended takeover talks with E.On.

ASTRAZENECA (AZN) was down £0.01 to £25.97. The company has launched a patent infringement lawsuit against Ranbaxy for willful infringement of its patents protecting Nexium (esomeprazole magnesium). The company explained that the lawsuit is in response to an Abbreviated New Drug Application filed by Ranbaxy with the FDA regarding Ranbaxy's intent to market a generic version of Nexium in the US prior to the expiration of six patents.

STANLEY LEISURE was up £0.22 to £6.59. The company said the overall group has performed in line with expectations in the first half, including a seven week contribution from the domestic betting business, sold on June 18 2005.

Nordics

CARLSBERG was up DKK9.00 to DKK336.50. The company announced restructuring in the UK at a cost of DKK125 million, which will be booked as a special item. The company said it will sell properties and will book a DKK250 million gain. It maintained its fiscal year operating profit outlook, but raised its fiscal year net profit outlook to DKK1.1 billion.

NESTE OIL was up €0.72 to €25.90. The company and Russian oil group Lukoil have reached an agreement on the sale of the company 's 50% holding in Russian oil production group SeverTEK to Lukoil. Following the transaction Lukoil will be the sole owner of SeverTEK. Neste will receive US$321,5 million from the transaction, and it will book a profit on the sale of approximately € 140 million in fiscal 2005 accounts.

Switzerland

ADECCO was up CHF2.75 to CHF59.50. Shares rose after CEO Jerome Caille resigned with immediate effect to be replaced by Klaus J Jacobs. Jacobs will take the post of chairman and CEO. The departure came days after the company reported third quarter results that fell short of expectations.

Italy

ALITALIA was down €0.16 to €1.05. Citigroup slashed its target to €0.40 and said the company has made a profit only twice in the last 10 years. The broker does not expect profitability to return until 2006 at the earliest. Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)


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