Markets & Finance

On the Move: Rio Tinto, Publicis, MAN


Plus: Swisscom, Scania, Medigene and other European companies making headlines Thursday

From Standard & Poor's European MarketScope

UK

SMITH & NEPHEW was up £0.28 to £5.48. The private equity consortium that has just acquired US orthopedic giant Biomet is lining up a bid for the company, its European rival, The Business reported. The article said that the two firms could still come together privately if a private equity bid for the company succeeds.

VODAFONE (VOD) was down £0.01 to £1.45. According to the FT, the company's board is set to meet to consider a proposed US$13.5-plus offer for Hutchison Essar, the fourth biggest mobile operator in India, in a move likely to spark a bidding war with Reliance Communications.

RIO TINTO (RTP) was down £0.52 to £26.83. Copper futures were trading at a five-week low in Shanghai on the prospect of slower growth from the US and, in particular, the US construction sector.

HMV was down £0.02 to £1.45. ABN Amro downgraded the company to sell from hold and cut its price target to £1.30 from £1.70. Morgan Stanley downgraded the company to equal weight from overweight and cut its price target to £1.45 vs. £1.85.

HSBC was up £0.01 to £9.26. S&P Ratings Services revised the company's outlook to positive from stable, reflecting the continuing benefits from the company's earnings diversification and its unique global reach.

France

PUBLICIS was up €1.56 to €32.29. The company is buying US-based interactive agency Digitas Inc. for US$1.3 billion. UBS says this is a positive strategic move, giving the company further access to the fast-growth online segment, growing share in marketing services & further increasing its position in a key Healthcare segment.

BULL was up €1.38 to €6.01. The company announced the sale of 100% of Bull Italia SpA, its Italian subsidiary, to Eunics.

Germany

METRO AG was down €0.35 to €48.32. The CEO was more cautious on Christmas sales than the German retail lobby, which forecasted a 2% y/y increase.

MAN was up €0.24 to €69.37. The company said it has no plan to change its Scania offer.

MEDIGENE was up €0.14 to €7.02. The company has encouraging results for Endotag-1 - the treatment of pancreatic cancer - in interim results from a clinical Phase II trial.

Italy

ALLEANZA was up €0.23 to €10.14. Shares edged higher as news emerges that Banca Intesa will have to sell its bancassurance contracts related to Casse del Centro and Banco di Napoli for €600 million. A local broker noted that the company will receive €150 million from the sale, of which €70 million will be a capital gain.

BANCA INTESA was up €0.05 to €5.45. The Italian antitrust authority has given its conditional approval to the company/SanPaolo merger, paving the way for Europe's sixth-largest bank with a market value of around €70 billion.

Nordic

HUSQVARNA was up SEK5.75 to SEK102.75. The company acquired German Gardena. The seller was Industri Kapital, a private equity firm. The company sees synergies within distribution and will try to make positive earnings contributions.

ERICSSON was down SEK0.15 to SEK27.75. Dagens Industri wrote that the market speculates that another player may place a higher bid for Redback, despite its board being behind the acquisition, as Redback's share rose 21.2% yesterday to US$25.66 - US$0.66 higher than the company's bid.

NORSK HYDRO was down NOK1.50 to NOK190.25. Citigroup upped its target price to NOK190 vs. NOK160 and maintained its hold recommendation.

SCANIA was up SEK1.50 to SEK483.00. MAN said it is confident that its bid will succeed, adding that an extension of the offer period beyond Jan. 31, 2007, isn't planned.

Spain

SACYR-VALLEHERMOSO was down €0.57 to €47.00. The company has taken a 5-year syndicated bank loan for €5.175 billion to pay for the purchase of 20% of Repsol (REP). Lenders included Santander, Citigroup, Calyon and Caja Madrid.

Switzerland

RICHEMONT was up CHF2.05 to CHF71.35. Swiss watch exports rose 13.1% year-over-year in November to a record CHF1.5 billion. Kepler Equities said November is the most important month for exporters given the ramp up ahead of the key shopping period.

SWISSCOM (SCM) was up CHF3.50 to CHF462.00. The company announced that Japanese venture capital company Netage Capital Partners, Inc. is to invest in the new Web service start-up company coComment. This week Netage formally acquired a 40% share in the company at a cost of US$1.5 million. coComment, which enables comments posted on the Internet to be managed simply and transparently, started out in February 2006 as a Web 2.0 service launched by Swisscom Innovations. Separately, Credit Suisse resumed coverage on the company with a neutral rating and & CHF450 price target.

Alexander Wisch, Rocio Opazo-Aniotz, Claudia Perotti, Michael Sanderson, Emma Stevenson, Mariella Mongio, Pawan Girglani, Guarav Panchal, Julien Manrique, Isabell Witt, Sara Oscarsson, Ben Marino, John West

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