Markets & Finance

Europe Market Movers: Tate & Lyle, Alcatel-Lucent, TUI


Plus more European stocks making headlines Friday

UK

TATE & LYLE was down £1.20 to £4.38... Warns on profit, brokers indicate cuts - the company says that its sugars business is now forecasting a small loss for first half vs a profit of £15 million year ago. Also expects translation impact of weakness of US$ to reduce pretax profit for first half and estimates this impact to be about £12 million over the comparable period. The company says the significantly higher corn costs in Europe will have an increasingly severe effect on the profitability. Views the near term outlook with caution. Following the update, Panmure lowers to hold from buy on the assumption of rampant US corn oil prices leading to windfall gains this year. Keeps price target under review. Citigroup sees material downward risk to market estimates (both operational and financial) in fiscal 2008 and fiscal 2009. Merrill Lynch says that the sugar business is weaker than expected, weaker HFCS market, tax rate is higher than expected. Adds that significant downgrades are to come.

NORTHERN ROCK was down £0.13 to £1.81... Borrowed another £5 billion from BoE - the company borrowed another £5 billion from the Bank of England, it emerged on Thursday, bringing its indebtedness to the central bank close to £8 billion since it was given access to emergency funds nearly two weeks ago, the FT writes.

ENTERPRISE INNS was down £0.07 to £5.92... Delays refinancing, REIT talks ongoing - The company says the business has continued to perform well and in line with expectations. Adds average EBITDA per pub has increased by more than 6% over the past year. The company says it is as yet difficult to evaluate the impact of the smoking bans introduced in England and Wales. Adds REIT discussions with HMRC are ongoing. the company earlier said it was working on refinancing its existing balance sheet to raise £750 million of additional debt by the end of 2007, but now to avoid pricing new long term debt against the background of the current turbulence in the debt markets believes that a delay into 2008 is appropriate.

France

ALCATEL-LUCENT (ALU) was up €0.30 to €7.20... Shares are flying on Russo departure hopes - the company shares are shooting up this morning on market expectations that CEO Patricia Russo is about to leave the company One market source notes rumor that the company CEO Russo has resigned and a replacement has already been found. Patricia Russo, chief executive of the company , has been given a month to present an emergency restructuring plan to her board and lay out where research and sales efforts should focus, the FT reports. Adds that Russo's position is not in question and nor is the logic of the merger.

ALSTOM was down €6.08 to €142.57... SocGen downgrades to hold from buy with €145 target. The broker says that following on from a meeting with Mr Poupart-Lafarge, the company 's CFO, broker believes the company has a clear preference for a full merger with Areva. McKinsey and HSBC, hired by the French state to advise the government on a possible nuclear industry restructuring, have recommended against pursuing a merger between Areva and the company , Les Echos reports.

EADS was up €0.49 to €21.56... Cheuvreux upgrades to outperform from underperform and raises target to EUR 30 from €17. Raises estimates by between 20% and 40% from 2007 to 2015 thanks to a better pricing environment, first take-off of two major programs A380 and A350, lower R&D costs and a better cash-flow profile. Believes the weak dollar is a real issue but can be addressed efficiently. the company said yesterday that it would be interested in acquiring assets of Sagem, part of Safran, if they are put up for sale.

Germany

TUI AG was up €0.76 to €18.84... US activist investor buying stake buoys stock - Guy Wyser-Pratte has bought a 1% stake in the company , according to Handelsblatt. The US financial investor reportedly said the company's CEO Michael Frenzel should be ousted.

DEUTSCHE TELEKOM (DT) was up €0.05 to €13.78... Buys Orange Netherlands for €1.33 billion from France Telecom.

SGL GROUP was down €1.09 to €40.21... Talk of Vneshtorgbank buying up to 5% of the company to secure carbon technology for Russia's new Sukhoi SuperJet-100. In other news: the company increases graphite electrode prices.

Italy

ENI (E) was down €0.18 to €25.99... Kashagan govt wants greater role for state company - Kazakhstan repeats a threat to strip the company of the leading role in a consortium that the country blames for delays and soaring costs in developing the Kashagan oilfield. the company is negotiating with the govt on a new budget and timetable for Kashagan. Talks are due to last until a 22 Oct. deadline and Italian PM Romano Prodi is due to visit Kazakhstan at the beginning of Nov. the company has said that operations at Kashagan were continuing and confirmed third quarter10 as the forecast date for production. Astana has said previously it would like to see state company KazMunaiGas as a co-operator in the project. Kazakhstan says that securing a bigger stake in the huge Kashagan oilfield was not its main goal in a dispute with the project's the company -led consortium.

GENERALI was down €0.17 to €30.81... Approves strategic 3-year plan - As part of its Strategic Plan update, the company targets fiscal 2009 net profit of €3.8 billion, (+58% vs 2006); operating result of €6.5 billion (up 62% on 2006); combined ratio of less than 95%; doubling of overall dividend. the company expects to step up German and Italian country reorganisation. Launches new investment and real estate strategies. Appoints its first CEO in its 175 years of business: Raffaele Agrusti. Citigroup says the company 's targets for fiscal 2009 are c.7% ahead of consensus both at operating and net profit levels. NBV target is in-line, while the dividend points to a greater than expected acceleration in pay-out. However, given the rumbling optimism ahead of this plan update and the company 's valuation against its European closest peers, believes the stock lacks relative valuation support and continues to see better value elsewhere.

Netherlands

HAGEMEYER was up €0.36 to €3.24... rumor broker mandated to bid €4/sh - Market sources note a rumor Lehman Brothers, or possibly Merrill Lynch, has a mandate on behalf of a bidder to bid for the company at €4 per share. Rexel is mentioned as a potential bidder.

ABN AMRO (ABN) was up €0.05 to €36.95... RBS-led consortium could waive acceptance condition - The RBS-led consortium says it reserves the right (but it not obligated) to waive the minimum acceptance condition to its offer for the company The offer remains open for acceptances until 3pm Amsterdam time on 5 October.

Nordics

CARNEGIE was up SEK13.50 to SEK135.50... FI settles with SEK50 million fine following trading scandal - Following the fraud scandal earlier this year, the company is ordered to pay a SEK50 million fine by the Swedish financial watchdog FI. the company also is ordered to replace its CEO Stig Vilhelmson and board members. Traders and analysts had expected a harder punishment from FI, with some even expecting the company 's license to be withdrawn.

NORDEA was up SEK1.40 to SEK112.30... Investor seen as potential buyer - One local broker argues, Investor is more likely to acquire the Swedish government's stake in the company and sees this as a potential first step in a deal between the company and SEB.

S-E BANKEN was up SEK2.00 to SEK209.50... Investor sees Falkenberg heading newco - According to unconfirmed rumors, Investor would want to see the company 's CEO Annika Falkengren named as CEO in the event of a merger between the company and Nordea, Dagens Industri writes.

FRONTLINE was down NOK1.00 to NOK265.00... Shipping lines object to tax plan - According to the FT, Norway's shipping companies are threatening to reflag their ships after the country's finance ministry proposed collecting NOK21 billion (US$3.8 billion) in deferred taxes from as far back as 1996. Norway's shipping companies, which control the second-largest offshore fleet in the world, argue the move breaches govt undertakings and will cripple many companies, adds the paper.

Spain

SANTANDER (STD) was down €0.05 to €13.63... Cepsa sale in focus / ABN conditions - The Spanish government opposes the sale of the company 's 30% stake in Cepsa to Sonatrach, according to Cinco Dias. The company says Sonatrach has offered €5.5 billion for the stake. The consortium of the company , RBS and Fortis says it reserves the right (but it not obligated) to waive the minimum acceptance condition to the offer. The offer remains open for acceptances until 3pm Amsterdam time on Oct. 5. The CNMV has warned that the company 's bond issue carries risk as the bonds are related to share prices.

Switzertland

NESTLE was up CHF4.00 to CHF523.00... JP Morgan raises price target to CHF630 from CHF570, reiterating overweight. Broker now assumes +30bps margins for 2010-16 vs flat estimates previously.


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