Markets & Finance

On the Move: Unilever, Danone, Gamesa


Plus: DaimlerChrysler, Air Liquide, Marks & Spencer, and other European stocks making headlines Tuesday

UK

MARKS & SPENCER was up £0.09 to £6.42... First quarter UK like-for-like sales beat expectations - The company posts first quarter group sales +7%; UK sales +6.4% - General Merchandise up 4.3%; Food up 8.5%; UK like-for-like sales +2% - General Merchandise +2.9%; Food +0.7%; International sales up 14.8%. Believes that short term trading environment will remain very challenging. Analysts expected first quarter like-for-like sales to rise 1.3% in General Merchandise and 1.9% in Food. Panmure raises target to £6.75 from £6.50, keeps hold. The company says better-than-expected numbers should see the share price retrace previous losses, despite the poor performance in food. Argues the company has considerable financial firepower and strong property backing, which will provide further support for the shares.

UNILEVER (UN) was up £0.32 to £16.48... Talk Numico CEO, CFO may join the company - Shares gain on talk that Numico's CEO Jan Bennink and CFO Jean-Marc Huet may join the company Traders say this is a big positive for the company as it needs good management. Also, shares benefit from sector consolidation talk. Numico has received a US$16.8 billion cash offer from French rival Danone. Rabo suggests to switch to the company from Numico. The Dutch broker expects the Numico deal with Danone to go through.

France

DANONE DA was down €1.05 to €58.43... Numico bid - broker reaction - The company has made a cash offer of €12.3 billion for Dutch group Numico. the company and Numico said on Monday, at the European close, that they had struck a preliminary agreement for a €55/share cash offer, representing a 44% premium over the average Numico closing price over the past three months, writes the FT. Cheuvreux ups target to €76 from €72, selected list; Natixis ups target by 15% to €83, buy; however ABN cuts target to €55.00 from €62.50.

AIR LIQUIDE was up €0.62 to €96.84... KKR to make a bid offer - traders - Market sources note speculation that KKR is to bid for the company

ESSILOR was up €0.16 to €87.14... Exane upgrades to outperform from neutral and lifts target to €106 from €92. Believes that the 'virtuous circle' of the integration of prescription labs is likely to last longer than previously expected and that the company 's volume strategy in Asia will allow it to benefit from the market's growth. See Broker Views & News - France

Germany

INFINEON was up €0.03 to €12.95... Bear Stearns upbeat on industry trends - Bear Stearns has reportedly raised target price for the world's largest chipmaker Intel based on solid industry trends and stable pricing.

SOFTWARE AG was up €1.01 to €74.64... CFO gives bullish outlook - Reuters - The company 's CFO Arnd Zinnhardt gave a bullish message in a Reuters interview: SOA market to grow at 20-30% p.a. for the next 5 years. Cheavreux says the company is well positioned with no need for further major acquisitions; smooth integration of webMethods, long-term EBIT margin target of 27+% by 2011 some 20% above broker's forecast. the company 's management expects to cut debt by €100 million at the end of the year, which was accumulated from the €300 million acquisition of webMethods, a US software firm.

DAIMLERCHRYSLER (DCX) was down €0.51 to €68.42... UBS raises target to €90 from €75. The company says management is under pressure to lift returns at trucks business which is the main issue to the company Raises truck, van and bus forecasts for fiscal 2008 and fiscal 2009, as believes restructuring is inevitable and can deliver rapid benefits. Expects Mercedes to make progress and believes cash distributions to shareholders looks increasingly likely. Keeps buy recommendation.

KLOECKNER was down €0.42 to €60.30... Considers large acquisition - The company may consider a large acquisition, possibly of up to €750 million, this year, the company 's CFO tells FAZ newspaper.

Italy

SAIPEM was up €0.49 to €28.15... Many brokers raise targets and expectations - Natixis lifts target to €29.60 from €25.70, rating Add. Cheuvreux maintains on selected list and sets a new target of €31. The analyst believes that the stock will continue to be supported by strong results, newsflow regarding new orders and possibly the announcement of further investments in new vessels. Merrill Lynch raises target to €31 from €26. Broker believes ththat the company is probably the favorite to win the next award from Sonatrach, the US$3 billion-US$5 billion Gassi Touil development - although the timing of the award is uncertain.

TELECOM ITALIA was down €0.01 to €2.06... Telefonica could seek control of the company - During an interview with the Financial Times, Telefonica's chairman Cesar Alierta, said its group could acquire the control of the company in the future. Meanwhile, through Telco, Telefonica has already a 23.6% stake in the company Gaetano Micciche, head of Intesa SanPaolo Corporate division, could be coopted to the company 's board of directors at the next meeting.

Netherlands

NUMICO was up €9.20 to €53.70... No hurdles with Danone takeover - After days of speculation, Danone said yesterday after market close that it wants to make a cash offer for the company of €55 per share or €12.3 billion in total. The offer price represents a 44% premium to the company 's average closing share price over the last three months. Cheuvreux upgrades to selected list from outperform. Sees no hurdles concerning the takeover. Rabo cuts to reduce from by, sets target price at €55. Notes the company 's management and board are supporting the tie up with Danone.

OCE was up €1.13 to €18.13... ABN upgrades to buy from hold - Broker says the company is walking a thin line, which leaves ample room for discussion and makes a fundamental call equally fun as well as difficult. Still, upgrades to buy as the asymmetric returns leave more room at the upside, while ABN expects short-term news flow to be bullish.

Nordic

VOLVO was up SEK2.00 to SEK141.50... HSBC upgrades to overweight from underweight and raises target to SEK183 vs SEK100. Broker states none of its fears for 2007 are materialising, says this affects not only its earnings estimates, but also its assessment of the long-term fundamental attractiveness of truck OEMs.

KARO BIO was down SEK2.50 to SEK9.90... Discontinues development of drug - The company announces that Merck & Co has decided to discontinue collaboration of the development of the investigational compound as the product is unsuitable for further development. A back up compound has been approved for entry into preclinical development.

WILLIAM DEMANT was up DKK5.00 to DKK540.00... Goldman upgrades to neutral vs sell - Broker removes from Pan Europe sell list and raises target to DKK580 vs DKK500. Over the next five years, broker expects the hearing aid industry to enjoy an increase in annual sales growth to 10% from 5% along with margin expansion. The broker sees the company , Phonak and Amplifon as key beneficiaries of these expected developments.

Spain

GAMESA was up €0.95 to €29.53... Morgan Stanley upgrades to overweight from equal weight and lifts target to EUR 33. The company says the company is preferred turbine maker. Thinks Eolica is worth €21 alone, while the company deserves SOTP premium due to its downstream integration in wind farm development.

TELEFONICA (TEF) was down €0.12 to €16.61... Offers €3 billion to control Vivo - FT - The company has made a €3 billion-plus offer to Portugal Telecom to secure exclusive control of Vivo, Brazil's largest mobile operator, writes the FT. the company has told Portugal Telecom, which jointly controls Vivo with the company , to respond to the offer by August. the company CEO Cesar Alierta told the Financial Times he was mainly focusing on organic growth after a series of bold acquisitions in Europe and LatAm.

BANESTO was down €0.37 to €16.62... first half results in line with estimates - The company says first half net attributable profit rose 13% to €390.5 million with net interest income up 18.6% to €704.5 million. Adds net operating costs rose 4.3%. The company says operating profit rose 22% to €638.1 million.


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