Markets & Finance

On the Move: ABN Amro, Hypo Real Estate Group, Tele Atlas


Stocks moving in European markets on Monday

UK

FRIENDS PROVIDENT - Up £0.14 to £2.01... Co., Resolution confirm merger talks - Co. and Resolution confirm are in advanced merger talks. The joint statement adds that the merger, if agreed, would involve an all-share combination. Under the deal, Co. shareholders would own 49.1% and Resolution shareholders would own 50.9% of the merged company. UBS lowers target to £2.25 from £2.50, keeps buy.

SAINSBURY - Up £0.04 to £5.95... Mellor advices Qataris in bid Former Tory cabinet minister David Mellor is one of the special advisers behind the potential £10.4billion takeover by Delta Two, according to The Observer. Delta Two is facing confrontation with members of the Sainsbury family who have hardened their opposition to the proposals, The Times reports. Says they are understood to be opposed in principle to any highly leveraged offer that involves breaking Co. up, which they believe would jeopardise its long-term stability. Adds they also view Delta's 600p-a-share offer as too low.

SABMILLER - Up £0.14 to £13.20... Citigroup upgrades to buy from hold, raises target to £15 from £12.15 to reflect expected strength in emerging markets. Believes Miller is being turned around and that the strategic value of the group's assets in Latin America, China, Africa ex-South Africa and India are under-appreciated.

France

PSA - Up €1.14 to €65.10... Exane lifts target to EUR 73 from €58 and keeps outperform. Sees risk/reward ratio as attractive as it believes the market has not priced in a real recovery.

ALSTOM - Up €2.04 to €136.59... Sarkozy makes moves on Areva/HSBC lifts tgt - French President Nicolas Sarkozy is planning to expel Siemens from a j/v with Areva, as part of a bid to tighten his grip over energy supply, risking fresh tensions with Germany and a major battle with the EU's competition police, The Daily Telegraph writes. Says the move is a first step to clear the way for a merger of Areva with Co. and Bouygues. Adds Sarkozy plans to invoke the right of the French state to buy out Siemens's 34% stake in the Framatome j/v with Areva under an option that expires in 2011. In broker news, HSBC lifts target to €95 from EUR74 and keeps underweight. Reflects a reduction in broker's targeted cost of capital and increased estimate of long term CFROI.

DEXIA - Down €0.22 to €23.44... To counter bid for Depfa - rumour - Traders note market rumours saying Co. is set to counter bid for Germany's Depfa. Hypo Real Estate has already launched a friendly bid, valuing the German government lender at €5.7billion.

Germany

HYPO REAL ESTATE GROUP - Down €3.05 to €46.11... Agrees to buy German government lender Depfa for some €5.7billion, or EUR16.14 per share. The action will be financed through cash, €750m hybrid capital and the issuance of 67m new shares. Co. sees integration costs of €160m and aims for synergies of €60m per year. Kepler says this leapfrogs Co.'s efforts to build up public finance business from scratch and brings it into the premier league of global public finance. Says although it has been sceptical about Depfa it thinks that in a combination with Co. value can be created. For WestLB's mostly positive comment, see Broker Views & News - Germany. Earnings-wise, Co. reported 2Q net income of EUR137m, up by a third y/y, and confirmed its 'positive operating trend'.

TELE ATLAS - Up €5.07 to €21.75... TomTom approach favoured by board - The Dutch group is offering €21.25 per share for Co., valuing it at €2billion. All members of Co.'s board and of large shareholder IAM, representing 17.4% of the share capital, have indicated that they will irrevocably tender their shares. The deal is conditional on 80% of the shares being tendered.

GPC BIOTECH - Up €0.14 to €15.25... Approval risk for satraplatin increased - WestLB notes that the FDA has raised five issues, of which it believes the most important ones are whether a composite PFS endpoint is sufficient for marketing approval and whether the FDA should wait final OS data before taking action. Broker downgrades Co.'s stock to hold from buy, cutting the target to €16.40.

Italy

UNICREDIT - Up €0.04 to €6.44... SocGen adds to premium list, rates buy with €9.10 tp - Analyst sees Co. as an enticing mix of growth and recovery: 15% EPS CAGR through to 2009, driven by structural growth in Italy and the CEE markets. Adds the leverage of a restructured German bank, HVB, in a stronger economy, is not reflected in the 9.3x 2008 PE at which the stock currently trades.

ALITALIA - Up €0.00 to €0.76... Italian govt seeks sale relaunch - The Italian govt could announce its intention to relaunch the sale of its stake in Co. as early as today as the cabinet holds a summit meeting on the next steps in Co.'s privatisation. British Airways could be among new suitors for Co., according to La Repubblica on Sunday. Adds Co. could sell off its slots at London's Heathrow airport as part of restructuring. Italy's Treasury is looking for investors who can inject capital into the airline and co-manage it, says Il Messaggero. TPG and MatlinPatterson, the US private equity consortium, still want to acquire Co., according to The Times, but will consider a new bid only if the Italian govt relaxes its conditions for a sale. The paper says ministers in Rome will consider last-ditch efforts this week to prevent the liquidation of Co., after the decision by Air One, the independent Italian carrier, to pull out of bid talks.

Netherlands

ABN AMRO - Up €0.27 to €36.90... Barclays revises offer for Co. at €67.5billion - Barclays makes revised offer for Co. €67.5billion (€42.7billion in shares and €24.8billion in cash). Barclays would make a better merger candidate for Co. than the bid made by the RBS-led consortium, Co.'s CEO reportedly told a Dutch newspaper. The RBS-led consortium has received regulatory clearances regarding their offer for Co. Therefore, formally launches offer for Co., in line with their expected timetable.

Nordic

ATLAS COPCO - Up SEK2.75 to SEK121.50... To acquire US based Mafi-Trench Corp - Co. has signed an agreement to acquire the assets of Mafi-Trench Corporation, a US supplier of turbo expanders for the Oil & Gas industry.

METRO INTERNATIONAL - Down SEK0.30 to SEK6.70... 2Q revenues below expectations - Co. reports 2Q07 PTP at US$3.7m and revenue of US$119.8m up 6.9% y/y, consensus was looking for a PTP at US$2.4m and revenue of US$124m.

SUBSEA - Up CHF6.00 to CHF153.50... Petrobras extends contract - Co. announces a contract extension to the Hybrid Vessel contract by Petrobras for engineering, fabrication and installation of rigid pipelines as well as the installation of flexible pipelines on the Brazilian continental shelf, until 2010. Says the value of the contract extension c.US$390m.

Spain

ACCIONA - Up €6.15 to €204.50... Citi raises target / CNMV to approve bid Citigroup raises target to €265 from €240, buy. Thinks the Iberenova (Iberdrola's renewables unit) listing could be a major catalyst for the wind power developers and may become the valuation benchmark. Says higher target for Co. reflects the new Spanish regulation approved at the end of May and higher capacity estimates. The Spanish press writes that the CNMV is expected to approve Co. and Enel's bid on Endesa this week, most likely on Friday, and a formal bid will be launched three days later.

PRISA - Up €0.41 to €16.20... UBS upgrades after 1H / Chairman dies - Co.'s chairman Jesus de Polanco died on Saturday after an illness. His son had already been named as his successor. UBS upgrades to buy from neutral and raises target to €19.10 form €18.50. Says this follows strong 1H07 numbers and a 9% share price underperformance.


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