Markets & Finance

European Indexes Post Gains


A roundup of Friday's action on major European exchanges

London

Weaker-than-expected US jobs data failed to dent the FTSE 100's gains, with the index closing up 0.95%. London shares were supported by strength in pharma & resource stocks. In addition, BRITISH ENERGY (+7.32%) fired up on a La Tribune report that EDF's board has agreed to a bid for the British firm. Around 10 energy companies are potential bidders, the paper goes on to add. More M&A news: BT GROUP (+1.32%), BSKYB (-0.09%) and CARPHONE WAREHOUSE (+2.05%) are considering offers for Tiscali's UK assets, the FT writes. Drugmakers received a boost, after Morgan Stanley raised its target on ASTRAZENECA (+2.93%) to GBP22 from GBP21.50, reiterating equal weight. Also, GLAXO (+1.25%) has received FDA approval for its rotavirus vaccine, Rotarix. In other news, the UK Takeover Panel has ordered JC Flowers to commit to making a firm bid for FRIENDS PROVIDENT (-0.37%) by 5pm on 30 April or walk away. Fresh fears over the health of TESCO's (+0.25%) fledgling US Fresh & Easy business have emerged amid claims suppliers are disenchanted and had no idea that Co. was going to call a 3M halt to its expansion drive, The Times writes. In updates, VICTREX (-6.79%) said 1H08 trading is in line. METALRAX (+4.39%) said FY revenue slipped to GBP118.6m, adding new year has made a satisfactory start.

Paris

The CAC 40 (+0.27%) ended modestly higher on Friday as gains for heavyweight SUEZ and the telecoms players offset disappointing jobs data in the US. Telcos gained on news France may abandon plans to award a fourth licence for 3G mobile phone services, according to Dow Jones Newswires. BOUYGUES's (+3.91%) Bouygues Telecom, FRANCE TELECOM's (+0.78%) Orange and VIVENDI's (+0.31%) SFR hold the three existing licences. SUEZ (+1.99%) is interested in the South African market as the government there plans to reissue a tender to build two power plants for about ZAR7bn (US$903m). EDF (+0.38%) yesterday received the go-ahead from its board to make an offer for 100% of British Energy, La Tribune reports. Italy's centre-left government aims to revive negotiations between AIR FRANCE-KLM (-1.24%) and Alitalia's trade unions in an attempt to avoid the Italian carrier going into administration. A Chinese fund has taken a US$2.8bn stake in TOTAL (-0.69%), writes the FT, noting that China's State Administration of Foreign Exchange began building its 1.6% stake in the French oil group several months ago. Spain's Sacyr Vallehermoso has agreed to sell its 33% stake in EIFFAGE (+1.79%) to French institutional investors for EUR 63 per share, weekly magazine Le Nouvel Observateur reports. LEGRAND (+0.21%) reportedly said it may post a full-year decline in US revenues.

Frankfurt

Xetra-Dax (+0.32%) closed the final day of the trading week with minor gains, as Wall Street was trading mixed after worse-than-expected employment data. In German macro news, February factory orders came in lower than expected, at -0.5%, still higher than the prior reading of -1.5%. On the corporate news front, KLOECKNER & CO. (+2.87%) entered into an agreement to acquire the operating assets of US-based distribution group Taylor Equipment & Machine Tool Corporation, which has some 180 staff and generated sales of about EUR 226m last year. E.ON (+0.39%) will spend twice as much as it currently does on renewable energy by 2010, with these sources forecast to account for 24% of its energy by 2030. No radical changes are planned in the near future by Leo Apotheker when he takes the helm at SAP (+4.14%), reportedly. MLP (+11.87%) was well bid after it reiterated that major shareholder Lautenschlaeger has no intention to sell his stake. FREENET (+11.11%) and DRILLISCH (+4.8%) resumed talks over the takeover of the former's mobile phone business by the latter. UNITED INTERNET (+5.64%), which is also involved in the negotiations, meanwhile, said it saw sales, EBITDA and EPS up 20% this year. Finally, pertaining to HYPO REAL ESTATE (-1.11%), Sal Oppenheim said it's still too early to rush in.

Milan

Piazza Affari finished Friday's session higher while Wall Street trades flat following poor macro data figures. US March payrolls fell by 80k while jobless rate rose to 5.1%. Back home, Italy's high court will decide on Tuesday if the 13-14 April election dates are valid. In M&A news, ALITALIA's shares will remain suspended until 8 April. Italy's centre-left government aims to revive talks with Air France-KLM in an attempt to avoid the Italian carrier from going into administration. Deutsche Bank cut Alitalia's target to EUR 0.01 and keeps sell. Il Sole 24 Ore reported that the consortium led by BP MILANO (+0.24%) will acquire for EUR 747m the 186 branches that UNICREDIT (+0.77%) put up for sale due to antitrust reasons. GENERALI's (+0.86%) activist fund Algebris filed a complaint with Consob against a rival list for auditors at the insurer presented by Edizione Hldg. In other news, BULGARI's (-1.37%) CEO Francesco Trapani said that March sales slowed down due to the financial crisis. ENI (+0.04%) made an oil discovery at its Kodak prospect in the deepwater Gulf of Mexico. DANIELI (+2.67%) signed a partnership agreement with Mechel to upgrade operations at certain subsidiaries of the Russian group. MONDADORI (-1.41%) will launch its Grazia magazine in India on 7 April. On the broker front, Merrill Lynch upgraded SARAS (+4.68%) to buy and kept target of EUR 4.20.

Spain

Spanish shares ended in positive territory on Friday as TELEFONICA, GAS NATURAL and IBERDROLA lent support. Meanwhile, Wall Street was trading mixed after non-farm payrolls came lower than expected at -80k vs. consensus forecasts of -60k. WTI gained to US$105.06. Of local note, the IMF said yesterday that house prices in Spain are overvalued by around 20%. SANTANDER (-0.07%) signed an agreement to buy RBS's European consumer finance unit. SACYR VALLEHERMOSO (-0.04%) may have agreed to sell its 33% stake in Eiffage to French institutional investors for EUR 63 per share, Le Nouvel Observateur reported. La Caixa, key shareholder of GAS NATURAL (+1.9%), has given the green light to a possible merger between the gas group and IBERDROLA (+1.95%), ABC reported. TELEFONICA's (+1.59%) j/v Vivo bought 53.9% of Brazil's Telemig for BRL1.163bn (EUR 429m) and will now launch a full takeover offer on the remaining shares. Negocio noted rumors that representatives of Italian firm Italtel may be in Madrid to negotiate the acquisition of a significant stake in AVANZIT (+0.38%).


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