Markets & Finance

On the Move: Sanofi, VW, Rio Tinto


From Standard & Poor's European MarketScope

France

FAURECIA was down €2.75 to €52.50. The company trimmed its second half profit margin to 1.7%-2% from 3.5% in the second half of 2004 after announcing it will not meet profit targets on its vehicle interiors unit. The company also plans to write down its goodwill by about € 180 million, and noted that it will book a provision for restructuring charges in its second half accounts for around €80 million.

GAZ DE FRANCE was down €1.00 to €24.51. Following the French government's decision to block gas price increases of 7.5% due January 1 2006, Ixis downgraded the company to reduce from add and cut its target to €25.50 from €30. Citigroup downgraded the stock to hold from buy and trimmed its target price to €26.0 from €29.50.

SANOFI-AVENTIS (SNY) was up €2.00 to €73.80. The company rallied on Friday'snews that a US federal judge upheld the validity of two key US patents on Pfizer's (PFE) Lipitor cholesterol drug, blocking a generic version of the drug that threatened the company's largest source of revenues.

Germany

MUNICH RE was up €0.24 to €114.59. The company will pay a significantly higher dividend for 2005 than the year before, CEO Nikolaus von Bomhard told Handelsblatt.

VW was up €0.26 to €45.27. The company will pay dealers in Germany bonuses of up to €2,500 on sales of certain models in a program to cut inventory and boost sales before the end of the year. Sales since October have been disappointing, while orders are not high enough for planned production, Automobilwoche reported, citing the head of Volkswagen Germany Maiwald. In another development, the company is to sell its IT systems unit Gedas to Deutsche Telekom (DT), according to FTD, with the price tag understood to be just under €450 million.

DAIMLERCHRYSLER (DCX) was up €0.27 to €42.82. The company may cut about 16,000 jobs, including 8,500 cuts already announced, to increase operating profit within three years. It is targeting group operating profit of over €9 billion for 2008, up from about € 5.8 billion in 2004, Handelsblatt reported.

JENOPTIK was up €0.19 to €7.78. The company agreed to sell M+W Zander to Springwater Capital in a transaction that will raise more than €100 million in cash.

Italy

CAPITALIA was up €0.10 to €4.94. Shares in Italian banks were given a boost by the news that Bank of Italy governor Antonio Fazio has resigned. The central bank released a statement which said that the decision was taken to restore calm and was in the greater interest of the country and the Bank of Italy.

Netherlands

UNILEVER NV (UN) was down €0.70 to €58.05. The company's board decided to retain and strengthen its current structure. Subsequently, the company will split its NV shares and consolidate the PLC shares, in order to establish a one-to-one equivalence in their underlying value. ING believed this announcement to be positive for the shares as it simplifies the existing share structure and provides more flexibility of capital structure.

BLUE FOX ENT was up €0.76 to €4.96. The company signed an agreement with Microsoft (MSFT) to build 'Textile and Apparel' functionality within Axapta. The first release is expected in the fourth of 2006 with 'serious' revenues coming in during 2007.

Nordics

NORSK HYDRO was down NOK13.00 to NOK683.00. Cheuvreux downgraded the company to underperform from outperform and lowered its target to NOK690 from NOK765. The broker noted that the main highlights from the CMD are disappointing short-term and long-term production targets.

TELENOR was down NOK1.50 to NOK64.00. The company's SONOFON was awarded the fourth Danish UMTS-license by the Danish National IT and Telecom Agency for DKK533 million.

Switzerland

NOVARTIS (NVS) was up CHF1.65 to CHF68.30. The company is mulling a bid for Berna Biotech and has started due diligence on Berna, but it said the key economic terms of a potential offer have not yet been determined, and there is no guarantee that an offer will be made. The bid would rival an all-share offer from Dutch outfit Crucell.

United Kingdom

GLAXOSMITHKLINE (GSK) was up £0.24 to £14.84. Pharma shares advanced after a decision by a US judge against a generic version of Pfizer's Lipitor cholesterol drug, blocking a generic version of the drug that threatened the company's largest source of revenues.

RIO TINTO was up £0.38 to £25.27. The company has won the auction for Peru's massive La Granja copper project with an US$82 million (£46 million) bid, The Times reported. Despite strong interest leading up to Friday's auction, the company was the sole bidder for the project.

BAA was down £0.04 to £6.45. The company has signed a definitive agreement to acquire control of Budapest Airport, plus the 75-year asset management contract (AMC) and associated moveable assets, for a total cash consideration of £1.255 billion.

CARPHONE WAREHOUSE was up £0.18 to £2.58. The company has acquired Tele2 UK Communications and Tele2 Telecommunications Services (Ireland), the holding companies for Tele2 AB's UK and Irish carrier pre-select (CPS) operations, for a cash consideration of £8.5 million. The company is to buy Onetel from Centrica for an initial cash consideration of £132.0 million funded via an extension of existing debt facilities.

DAIRY CREST was up £0.40 to £5.23. The company denied that any formal approach or indicative offer has been made adding that it is not engaged in such discussions with Lactalis or any other party. This followed a press report that French dairy company, Lactalis, has held detailed talks with the company about a possible £800 million takeover to create Britain's largest milk and cheese producer. 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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