Markets & Finance

On the Move: Deutsche Bank, Reed Elsevier, Novartis


Plus: Rolls-Royce, Soc Gen, ABN AMRO, and other European stocks making headlines Tuesday

UK

TATE & LYLE was up £0.22 to £5.94... Goldman Sachs upgrades to buy from neutral. Adds the shares to the conviction buy list. Reduces estimates to reflect higher interest costs and dollar weakness. Believes stock to be well positioned to outperform over second half. The company says a share buyback of up to £300 million should also be a positive for the stock and Wednesday's update could re-affirm this intention. Lifts target price £6.50 from £6.48.

ROLLS-ROYCE was down £0.15 to £5.49... Credit Suisse downgrades to neutral from outperform, on valutation and headwinds concerns. Keeps target price of £5.70. Sees the company as a long-term core holding that should outperform the sector over the cycle, but at the current share-price prefers other companies in the sector. Expects solid first half results on July 26.

France

SOC GEN was up €1.04 to €139.79... Talk of potential Unicredit merger next year - A market source has reported talk that a merger between the company and Italy's Unicredit could be on the agenda next year, following the latter's integration with Capitalia.

VALLOUREC was up €2.10 to €229.75... Arcelor Mittal to bid at €280 - rumor - Market sources hear revived rumor that Arcelor Mittal is to bid for the company at €280 per share.

TOTAL (TOT) was down €0.68 to €61.62... ING downgrades to hold from buy following recent strong performance and lifts target to €62.50 from €62.10. The broker notes the company is now trading near its modestly revised DCF target price. In other broker news, HSBC ups target to €73 from €66, keeping overweight, it admits largely on market movements. Believes Shtokman deal is 'big on volume, but low on value'.

Germany

AIR BERLIN was down €0.66 to €15.90... Morgan Stanley places 1.25 million shares at €15.95 - €16.05, reportedly.

DEUTSCHE BANK was down €0.93 to €107.30... Shares slip on rumours of profit warning - The company 's shares are off opening levels as rumours circulate in the market that the company may issue a profit warning, according to traders.

Italy

MEDIASET was down €0.03 to €7.65... Eyeing up Wind's Tower Company - The company is showing an interest in Tower Company, owned by Wind and 3 Italia's company. the company could team up with with the Benetton-Clessidra alliance in bidding for the tower portfolio. The Tower Company has been valued at between €1.2 billion and €1.5 billion of which EUR 700 million-€800 million are related to Wind infrastructure.

RCS MEDIA was down €0.08 to €4.13... Cheuvreux ups target to €4.70 from €4.50, rating outperform. Believes that in the next 12 months, the company might make large acquisitions, which could pave the way for further growth and a more efficient capital structure. Adds shares are currently trading broadly in line with the median of its European peers at 10.2x and 9.4x on 2008-09 EV/EBITDA.

Netherlands

REED ELSEVIER (RUK) was down €0.34 to €14.36... Price for Harcourt is better than expected - The company has agreed last night to sell its education arm Harcourt to rival Houghton Mifflin for US$4 billion (US$3.7 billion in cash and US$300 million i common stock). Cheuvreux says total proceeds are around €500-600 million higher than consensus estimates.

ABN AMRO (ABN) was down €0.15 to €37.00... Barclays looking at improved offer - FT - After yesterday's revised offer for the company by the RBS-led consortium, Barclays is understood to be looking at ways to improve its offer for the company , including issuing 'quasi equity' such as convertible bonds, according to the FT. SocGen upgrades to hold from sell and raises target to €37.70 from €35.

Nordic

ELECTROLUX was up SEK13.50 to SEK174.50... Maintains 2007 outlook - The company says first half net sales from continuing operations rose to SEK50.75 billion while income for the period was SEK1.037 billion or SEK3.70 per share. Adds operating income rose 16% in first half, ex items. The company says strong sales in North America led to gains in market share and improved earnings. The company says group outlook for 2007 is unchanged.

SSAB was down SEK25.50 to SEK266.50... second quarter profit below forecasts / IPSCO - The company reports a profit after financial items of SEK4.011 billion vs SEK3.334 billion year-over-year for first half07 and SEK1.864 billion vs SEK1.776 billion year-over-year for second quarter 2007. Analysts were estimating a profit of SEK2.27 billion. For the most recent twelve-month period, return on capital employed amounted to 38% and return on equity to 31%. In other news, a special meeting of IPSCO shareholders this morning voted to approve the Plan of Arrangement whereby the company will acquire all of the outstanding shares of IPSCO. ISPCO and the company had entered into an agreement providing for IPSCO to be acquired by SSAB for US$160/share in cash for a total equity value of c. US$7.7 billion.

ERICSSON (ERIC) was down SEK0.26 to SEK27.72... Selected by Vodafone for Portugal contract - The company has been selected by Vodafone Portugal as the Core IP Multimedia Subset sole supplier to deliver fixed and mobile convergent services. The newspaper Business Standard reports that BSNL has decided to halve its 45.5 million line GSM order and to renegotiate the price with the company and Nokia.

Spain

IBERIA was up €0.04 to €3.81... Air France eyes the company / Too expensive, says Lufthansa - Air France-KLM officially confirms its intention to take an active part in the consolidation process in the airlines industry. Comments that Spain is a major market and the company an important player, thus says it is an option to be examined among others. Lufthansa says it is still interested in the company , but thinks the Spanish airline is currently too expensive, according to Reuters, citing a spokesperson.

BME was down €1.30 to €42.72... Santander places 3.4% at €42.90/sh - Santander says has carried out a private placement of the company shares. The company says places among institutional investors a packet of 2,842,929 the company shares, 3.4% of capital, at €42.90 each.

Switzerland

NOVARTIS (NVS) was down CHF0.75 to CHF65.55... Lowers sales growth outlook Reports first half net sales of US$19.90 billion, +14% (+11% local currencies); net income US$4.20 billion, +14%; EPS US$1.78, +14%; operating income from continuing operations up 13%. To use proceeds from non-core divestments to fund targeted acquisitions and repurchase of up to approximately US$4 billion shares by February 2008. Expects record 2007 operating and net income for continuing operations; lowers group net sales growth to mid-single-digits in local currencies. Expects pharmaceuticals net sales growth to slow in second half07, mainly from US generic competition for Lotrel and Lamisil and the Zelnorm suspension.


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