Markets & Finance

On the Move: Ericsson, Vallourec, BMW


Plus: Friends Provident, Danone, Telecom Italia, and other European stocks making headlines Friday

UK

FRIENDS PROVIDENT was up £0.07 to £1.86... Gains on talk of AXA bid, heavy volumes - Shares gain on speculation that France's AXA could be interested. Note that the rumour talk has been around before. Also, AXA UK's Group CEO Nicolas Moreau has stated that he sees no need for major buys in the UK. There is also talk of broker upgrades doing the rounds, a trader notes. About 11.7 million shares have been traded in the company with the 30-day average daily volume being 17.86 million.

JOHNSON MATTHEY was down £0.05 to £18.23... Citigroup ups target to £20 from £18, ahead of AGM statement next week. Keeps buy. Raises estimates to reflect confidence on medium-term growth. Cuts risk profile to Low given legislative drivers, strong market positions and high barriers to entry.

France

VALLOUREC was down €11.11 to €216.18... Sells two tube businesses to Arcelor Mittal - The company has reached a preliminary agreement to sell two steel tube businesses to Arcelor Mittal for an undisclosed amount. Market sources say that this news could cool takeover speculation surrounding the company.

PSA was up €0.86 to €63.96... ML recommends play the company through options - source - Market source says Merrill Lynch recommends playing the company through options as broker expects the stock to move sharply one way or the other in the next two months depending on what is delivered at the company 's September strategy plan. Renault, which remains cheaper than peers, is the broker's preferred stock, according to the source.

DANONE (GDNNY) was down €0.90 to €56.23... PepsiCo should pay around €43 billion for the company - press - Les Echos reports today that if PepsiCo were willing to takeover the company it would have to pay a control premium of at least 30%, hence valuing the company at c.€43 billion or c.€83 per share, versus current valuation of, respectively, €30 billion or €57 per share.

Germany

GPC BIOTECH was down €7.85 to €15.11... Shares plummet on FDA news - An FDA panel will meet next week to discuss the satraplatin cacer drug after raising five issues with the application for the drug, also known as Orplatna.

ADVA was up €0.17 to €7.67... Credit Suisse initiates with outperform - Expects revenue growth to resume by around fourth quarter07-first quarter08, driven by continued growth from customers other than Lucent. For the next 2-3 quarters expects further customer announcements both in Europe and in the US. The company says currently trades on a roughly 35% discount to Ciena, which broker views as its closest peer. Adds YTD the company 's stock has underperformed Ciena by over 40%. Sets target price of €9.8.

E.ON (EON) was down €0.29 to €121.30... Lehman reinstates coverage with overweight - Lehman says the company 's post Endesa 'plan B' seeks to balance growth, politics and shareholder expectations. The broker views its capex strategy sensible and the expectation of double-digit dividend growth through to 2010 very attractive in a sector context. Notes its €140 price target suggests 15% potential upside, in broker's view making the company one of the best opportunities in the sector.

BMW was down €0.33 to €47.44... Rumours Brilliance wants to take stake - Traders note rumours that Chinese group Brilliance looking to take stake in the company

Italy

TELECOM ITALIA was down €0.03 to €2.08... 'Last mile' in exchange for commercial offer - The company is ready for the functional separation of the 'last mile' of the landline network, in exchange for the abolition of restrictions on commercial offers imposed by the antitrust.

Nordic

ERICSSON (ERIC) was down SEK1.42 to SEK26.38... second quarter below analyst forecasts - The company reports second quarter net sales of SEK47.6 billion vs SEK44 billion year-over-year, up 8%,vs SEK47.8 billion forecast. In first half07 net sales were SEK89.8 billion vs SEK83.2 billion year-over-year. Operating income in second quarter was SEK9.3 billion vs SEK8.3 billion year-over-year, up 12%, vs SEK9.7 billion forecast and SEK17.4 billion vs SEK14.9 billion year-over-year in first half07. second quarter operating margin was 19.4% vs 18.4% year-over-year vs 20.3% forecast, and in first half07 it was 19.4% vs 17.6% year-over-year. Cash flow from operations in second quarter was SEK4.2 billion vs SEK0.2 billion year-over-year, and in first half07 it was SEK8.8 billion vs SEK2.6 billion. Net income in second quarter was SEK6.4 billion vs SEK5.7 billion, up 12%, and in first half07 SEK12.2 billion vs SEK10.3 billion. EPS was SEK0.40 vs SEK0.36, up 11%,and in first half07 was SEK0.77 vs SEK0.65.

SWEDISH MATCH was up SEK7.75 to SEK138.00... Guides for lower tax rates - The company guides for tax rates for 2007 to decrease to 25% vs 29% previously expected and for 2008 to 20% vs 29% previously expected. One Stockholm based analyst points out this could lead to and EPS increase of up to 13%. second quarter sales comes in at SEK3.09 billion vs SEK3.12 billion forecast, operating profit at SEK642 million vs SEK686 million forecast, pretax profit at SEK563 million vs SEK623 million forecast, wet snuff margin at 39.1% vs 41.1% forecast. Guides for snuff margin to improve in second half vs second quarter. Forecasts growing US snuff volumes; above 10% in fiscal 2007. Highlights it is looking for further acquisitions in cigars.

TIETOENATOR was down €3.69 to €20.08... second quarter sales lower than expected - The company reports second quarter07 sales up 5% to €434 million vs Reuters consensus of €438 million. first half07 net sales were up 7% to €876.4 million vs €821.6 million year-over-year. Organic growth in second quarter07 was 8% vs 9% in first half07. second quarter operating profit excluding one-offs came in at €18.1 million vs €26.9 million year-over-year. second quarter pretax profit amounted to €8.9 million vs €25 million year-over-year, first half07 pretax profit was €41.3 million vs €54.9 million year-over-year. second quarter EPS came in at €0.07 vs €0.51 year-over-year, first half07 EPS was €0.39 vs EUR 0.51 year-over-year.

KONE was up €1.03 to €50.92... Solid second quarter with raised guidance -S&P Eq Res notes second quarter07 sales were 5% above Vara Research consensus, EBIT 6% ahead and net earnings about 13% above. Notes the company raised fiscal 2007 guidance, as expected, to 10-15% growth vs the firm's current forecast of 12.5% growth, along with a 25-30% improvement in EBIT. The broker rates hold with a €49 target.

Spain

ACS was down €2.38 to €45.71... M. Stanley confirms placement at €46.50 - Morgan Stanley confirms that it has placed 3% of the company at €46.50 per share.

ZELTIA was up €1.19 to €9.39... EU medical watchdog recommends Yondelis - The EU medicine watchdog has recommended the company 's Yondelis for approval. Recommendations are notmally endorsed by the European Commission within a few months.

ENAGAS was up €0.46 to €18.07... SEPI to buy up to 5% stake - State holding company SEPI says it will buy up to a 5% stake in the company

Switzerland

UBS (UBS) was down CHF1.55 to CHF70.30... Marsico sold due to 'one-firm' concerns - According to sources, Deutsche Bank was selling shares in the company on behalf of core growth fund Marsico and 'the reason it did not all print is that some of it was in ADRs'. It is understood that the US-based shareholder sold its holding because 'it did not buy into the one-firm approach'. Deutsche yesterday placed 35 million shares with institutional investors, according to various reports. The stake was reportedly offered for CHF71.2 - CHF71.5 a piece.

DUFRY GROUP was down CHF10.10 to CHF131.70... Areas S.A. to sell 18.2% stake by way of an accelerated bookbuilding to institutional investors. The offering of some 2.53 million shares is being led by Deutsche Bank.


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