Markets & Finance

On the Move: Prudential, Allianz, France Telecom


From Standard & Poor's European MarketScope

Spain

FCC was up €1.23 to €48.24. The company said it has been awarded an urban sanitation contract by the Bilbao council. The contract is for seven years with an option for a further three. It is worth €360 million over the ten years.

France

FRANCE TELECOM (FTE) was up €0.34 to €21.60. The company's Orange and peers SFR and Bouygues Telecom have been fined €534 million in total for market collusion. The fines were lower than expected. Orange faces €256 million, while Bouygues Telecom and Vivendi's (V) SFR will have to pay €58 million and €220 million respectively. Meanwhile, the consumer association UFS-Que Choisir has announced plans to sue the phone operators. Separately, the company is expected to sell its satellite communications subsidiary FTMSC to Apax Partners.

BNP-PARIBAS was up €1.20 to €68.40. The company is reportedly in talks to buy a majority stake in Ukrsibbank, Ukraine's fifth-largest bank, in a deal estimated between US$600 million and US$800 million.

VIVENDI UNIVERSAL (V) was up €0.67 to €25.32. The company's SFR has announced it will appeal the €220 million fine for market collusion.

Italy

FASTWEB was up €1.03 to €40.82. At least five private equity firms are considering buying the company, the FT reported. According to the paper, Apax Partners, Providence Equity and Permira, which are involved in the TDC offer, plus BC Partners and Carlyle Group, have all been in touch.

Nordics

AKER KVAERNER was up NOK9.50 to NOK371.50. The company said the financial target of an EBITDA of NOK1.75 billion in 2006 which was set in April 2004 is expected to be reached already in 2005, one year ahead of the plan.

NOKIA (NOK) was up €0.18 to €14.68. The company hosts its annual meeting in New York Thursday and Friday. CSFB said it remains structurally positive for the stock and maintains an outperform rating and fair value of €16. However, the broker noted that there is a risk that the company may adjust/push-out margins targets for the devices and networks businesses at the event.

CARLSBERG was up DKK12.00 to DKK341.00. The brewery reportedly sold 2.3 million shares in South Korea's Hite Brewery through accelerated bookbuild in a range of KRW138,000-KRW144,000 per share. The stake is worth about US$310 million. Separately UBS upgraded the company to neutral from reduce and raised its price target to DKK330 from DKK315.

Switzerland

SWISS LIFE was up CHF9.00 to CHF219.40. The company confirmed its goal of posting a net profit of CHF1 billion by 2008 and of a return on equity of over 10%.

Germany

THYSSEN KRUPP was up €0.04 to €17.13. The steel giant reported fiscal year EPS up 13% to €2.05, pretax profit of €1.8 billion, a tad higher than market estimates of around €1.74 billion. Revenues came in at €42.1 billion, in line with estimates. The company said it is on track to meet its mid-term € 50 billion revenue target. Note: yesterday saw strong results from Corus, while investors were focusing on the Dofasco bid.

ALLIANZ (AZ) was up €2.36 to €125.85. Traders in Frankfurt noted market talk about a possible placement of as much as 4.7% of the company's capital by the company's shareholder Munich Re. Munich Re told S&P MarketScope it does not comment on market speculation. Separately, Deutsche Bank removed the company from its Pan-European Focus List Thursday.

SCHERING (SHR) was up €0.39 to €55.34. The FDA issued a health alert on Campath usage in a clinical trial to treat multiple sclerosis after three patients developed a severe blood disorder and one of the patients died.

United Kingdom

PRUDENTIAL (PUK) was down £0.02 to £5.26. The company bid for the 21.7% it does not already own of Egg. The deal would swap 0.2237 Prudential share for each Egg share and values Egg at 118p per share or £973 million, a 15% premium to the market price.

EGG was up £0.14 to £1.17 on the news of the prudential bid. The deal will lead to pre-tax cost savings of £40 million by end-2007 and will enhance earnings for 2006.

PUNCH TAVERNS was up £0.31 to £8.62. The company announced a proposed acquisition of Spirit Group for £2.679 billion. The acquisition was funded by £1.25 billion in debt facilities, £1.25 billion of assumed Spirit debt, £275 million of convertible bonds and up to £75 million of new ordinary shares. The company also sold 203 pubs to Admiral Taverns. Spirit owns and operates 1832 pubs in the UK. The company said the buy was in line with its strategy of increasing the overall quality of its estate. It will increase direct access to areas of retail growth such as food, wines, and soft drinks.

HSBC was up £0.11 to £9.37. The company said all customer groups delivered higher pretax profit than in the third quarter of 2004. However, trading revenues will be lower in the final quarter. Net operating income before provisions outpaced underlying cost growth, it said, noting that there are favorable trends in U.S. consumer finance.

AWG was up £0.27 to £10.29. First half turnover was up 6.6% to £889.6 million, operating profit up 28.8% to £192.1 million, profit after tax up to £30.1 million from £21.8 million, EPS 21.1p from 15.2p. The numbers were in line with Merrill Lynch's forecast of revenue of £875 million, EPS of 23p.

RYANAIR was up £0.17 to £7.37. Traders in London noted talk of a possible placement of as many as 4 million shares.

Netherlands

ING GROEP (ING) was up €0.64 to €28.16. The company was added to Deutsche's Pan-European Focus list. The broker said the company is set to have better momentum in the coming months. 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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