Markets & Finance

On the Move: Centrica, BNP-Paribas, Ericsson


Plus: ABB, Banca Italease, Thysen Krupp, and other European stocks making headlines Monday

UK

CENTRICA was up £0.3 to £3.62. Traders note market talk that Gazprom UK is saying that the company is not a bid target. Gazprom is closing in on a deal to boost its market presence in the UK, according to its deputy chief executive, The Daily Telegraph writes. Notes Gazprom has already expressed an interest in Centrica, as well as other European assets.

BARCLAYS (BCS) was up £0.11 to £7.34. The company has put its controversial Firstplus loans business up for sale as it seeks to reduce further its exposure to high-risk lending, The Mail on Sunday reports. The company is understood to have asked Credit Suisse to find buyers for the specialist loans business, in a sale that could fetch as much as £400 million. The FT reports that Atticus Capital, an activist hedge fund with a 1% stake in the company, has called the company to drop its agreed bid for ABN Amro, warning it will vote against it if the company proceeds.

France

BNP-PARIBAS was up €1.73 to €88.89. According to The Times, SocGen is engaged in an urgent search for another group to combine with to avoid being taken over. Last Friday, Les Echos reported that SocGen had mandated two investment banks to advise on the possibility of merging with the company However, Le Figaro reports this morning that the company 's management opposes the idea.

ALCATEL-LUCENT (ALU) was up €0.22 to €10.09. The company shares traded higher on its Capital Markets Day. The company reiterates its guidance for revenue growth in 2007 to be in line with the carrier market rate (which UBS expects will grow in the mid single-digit range). CEO Patricia Russo emphasises in her presentation that integration is 'on track', with a new operating model being implemented and portfolio rationalisation complete. The company unveils a €10 million contract to build a 10 gigabit IP/Ethernet network for Telekom Malaysia.

VALLOUREC was up €8.28 to €232.27. The Business reports that BNP Paribas has been hired by a mystery client to examine a bid for the company The paper notes recent unconfirmed rumours that both Gazprom and Arcelor-Mittal had been studying a bid.

Germany

THYSSEN KRUPP was up €0.97 to €43.49. Shares in United States Steel (X) jumped on Friday after Russian news agency Interfax reported that the company is interested in buying the group. the company reportedly says it is not in talks with the US group, nor with Russia's Severstal, which was also speculated.

MERCK was up €0.07 to €102.72. The company will reportedly invest US$29.8 million in the US biotech group Archemix, expanding their alliance in developing aptamer-based therapeutics for treating cancer.

COLONIA REAL ESTATE wa up €1.17 to €33.47. WestLB upgrades to buy from add - with the target at €42. The broker has raised its earnings estimates after the excellent first quarter figures, it says, and the increase in the company 's guidance.

Italy

TISCALI was down €0.03 to €2.35. A leading domestic broker considers the company 'interesting' and has a target price of €3.15 based on the possibility that the company could be bought out. Meanwhile, thanks to debt reduction following the sale of European units, the company is evaluating growth opportunities through acquisitions. Tele2 Italia, owned by Sweden's Tele2, worth between € 350 million-€400 million, has been approached by the company the company may be seeking acquisitions, although the company 's managers are not participating in any talks now, writes Il Corriere della Sera, citing CEO Tommaso Pompei. The company may bid for WiMax licenses, adds Pompei.

BANCA ITALEASE was up €2.08 to €21.92. The company has disclosed that Mediobanca and Goldman Sachs have expressed their interest in supporting the company in restructuring its derivatives portfolio and would also be prepared to invest in the company directly. The company has revealed that an internal audit has uncovered some incorrect procedures in the relation to the RE Group Coppola. Banca Popolare Italiana CEO Divo Gronchi has said that a capital increase does not appear necessary, writes Il Sole 24 Ore.

Netherlands

CORPORATE EXPRESS was up €1.02 to €10.47. Hedge fund Centaurus Capital has acquired 5% voting rights in the company. Rabo upgrades to buy from hold and raises target to €13 from €10. The company says pessimism is abound after 5 disappointing quarterly results, but believes valuation is close to bottom levels. Sees good value in the company 's strategic positioning, which could be unlocked by improving operational execution. Besides, a trade buyer could achieve significant synergies, in broker's view. Adds that with the threat of shareholder activism, the company will have to act, or someone else will.

Nordic

HENNES & MAURITZ was up SEK7.50 to SEK421.00. Merrill Lynch sees a buying opportunity in the stock. The broker notes the stock has been sold off along with the pack which opens up a buying opportunity. Ahead of 20 June interims, says that even if like-for-likes in May are flat, ex currency sales growth should come at 20% in second quarter, bringing first half earnings growth to 24%. Raises fiscal 2007 EPS to SEK 15.70 from SEK 15.40. The company will deliver first half 2007 results on June 20 and will hold a press conference at 10.30 in Stockholm. There will also be a telephone conference in English the same day at 14.00.

ERICSSON was up SEK0.30 to SEK26.10. The company announces it has signed a contract with China Mobile for US$1 billion to expand China's GSM coverage in 19 regions. Also, Sony Ericsson China signed a contract with China Postel to deliver mobile phones for US$600 million. Both agreements were in connection with Chinese President Hu Jintao's official visit to Sweden.

Spain

BANKINTER was up €1.75 to €65.20. Banco Sabadell's Chairman Josep Oliu has told Cinco Dias that an acquisition of the company 'could make sense some day' given that Sabadell's priority is growth in Spain.

Switzerland

ABB LTD (ABB) was up CHF0.85 to CHF26.80. Goldman Sachs upgrades to neutral from conviction sell as it increases target to CHF25 from CHF22. The company says energy investment remains strong globally and with capacity tight, lead times are extending and prices rising.

NESTLE was down CHF1.00 to CHF466.50. The company says following detailed inspection of the damage that occured at the Mt.Sterling (Kentucky) plant on Friday, it has concluded that the damage is extensive. The facility suffered a rupture in its ammonia refriferation system.


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