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M&A news provided focus Thursday
From Standard & Poor's European MarketScope
European indexes closed higher Thursday. Major U.S. indexes rallied amid M&A news and raw-materials producers were boosted by rising copper prices.
UK: The FTSE 100 index (+2.21%) ended on a high note. In the UK, tobacco sector consolidation provided investors with much of the excitement: Imperial Tobacco (ITY) (+8.55%) confirmed that it had made an offer of €45/share for Altadis. However, there was speculation that the board of the Spanish tobacco group could try to force a higher offer of about €48-€50/share.
Miners also beefed up the index, BHP (BHP) (+6%) was a top pick in the sector for ABN Amro, along with Anglo American (AAUK) (+5.7%). Prudential (PUK) (+4.98%) and Cadbury (+3%) were active. Prudential jumped after fiscal 2006 results and the disclosure that actions are in place to realize 65% of the previously announced cost savings target of £115 million for the UK insurance unit and the group raised annualized target cost savings to £195 million by 2010.
Cadbury will separate its confectionery and Americas beverages businesses. Vodafone (VOD) (+2.24%) confirmed its deal with India's Essar regarding management of their jointly-owned mobile telecom unit Hutchison Essar, which will be renamed Vodafone Essar. Outside the blue chip index, Aegis (+5.14%) and Cobham (+5.13%) rallied after fiscal numbers. Autonomy (+6.39%) benefited from a Citigroup upgrade to buy from hold.
France: The CAC 40 index (+1.77%) closed markedly up, with Wall Street shrugging off a mixed open to trade in the black on M&A action. At home, Atos Origin (+25.16%) rocketed on a Dow Jones report that it had received a €58/share offer from Permira and Centaurus. Admitting that it has been courted, Atos denied receipt of an offer. Cap Gemini (+5.8%) remained the biggest blue chip percentage gainer all day.
Elsewhere, AXA (AXA) (+2.17%) has bought 75% of South Korean motor insurer Kyobo Auto, which has >30% market share in its home territory. S&P Rating Services cut its long-term corporate credit rating on Schneider (+1.91%) to 'BBB+' following its acquisition of APC. Credit Suisse upgraded to outperform from neutral. Bouygues (+1.86%) has denied a Challenges report that it is considering exchanging its stake in TF1 (+1.56%) for Lagardere's (+0.87%) stake in EADS (+1.35%).
Areva (-0.92%) raised its offer for Repower shares to €140 from €105, topping Suzlon's offer of €126 in a takeover attempt building on its current stake. Among those reporting, Natixis (-3.96%) posted underlying net income, group share, of €2.158 billion, up 25%, though down on consensus of €2.220 billion. Casino (+11.88%) leapt after it posted fiscal 2006 attributable net income of €600 million, +74.4%. ADP (+1.07%) posted better-than-expected current operating profit of €390.9 million.
Germany: The Xetra-Dax index (+1.92%) closed higher, recovering from Wednesday's falls. In Frankfurt, DaimlerChrysler (DCX) (+4.45%) closed as the leading index riser on continued market talk that the car maker would soon spin off its Chrysler unit. Deutsche Boerse (+3.88%) followed suit on sector consolidation excitement after the Intercontinental Exchange offered to buy the Chicago Board of Trade.
Deutsche Telekom (DT) (+1.48%) was eyed after Russia's Telecoms minister reportedly said at CeBIT that Sistema is interested in taking over the German telco. In earnings, Bayer (BAY) (+2.95%) reported fourth quarter EBIT before special items of €622 million. While the figure was in line, investors were encouraged by the very strong performance in Healthcare, which, according to WestLB, was visible in the 2009 EBITDA margin estimate upgrade to 27%.
Altana (AAA) (-1.02%) on the other hand was one of two losers on the Dax after releasing final 2006 figures. GPC Biotech (GPCB) (+1.67%) reported that revenues for fiscal year 2006 rose by 143% year-over-year. But for the quarter, revenues were down to €5.1 million vs. €6.6 million in the previous quarter. Fourth quarter net loss amounted to €17.2 million, flat year-over-year. K+S (+3.97%) posted a slight increase in sales and earnings thanks to the potash sector.
Elsewhere: With Stockholm in the lead, the Nordic markets tried to hold on to earlier gains. They still finished firmly in the black.
Spanish shares ended higher with Altadis soaring following a long-awaited approach from Imperial Tobacco (ITY).