Markets & Finance

European Indexes Post Gains


A rundown of Monday's action on major European stock exchanges

LONDON

The FTSE 100 (+0.74%) came off intraday highs but closed the first day of the new trading week with solid gains. Wall Street was trading flat, as a series of measures to help mortgage giants Freddie Mac and Fannie Mae by the Fed and the US Treasury offset sustained concerns about the state of the credit crisis. WTI eased to US$144.61. At home, ALLIANCE & LEICESTER (+52.79%) skyrocketed after announcing it had agreed to a takeover offer from Santander at GBP2.99/share plus dividend. The deal values A&L at GBP1.259bn. LLOYDS TSB (+2.45%), BARCLAYS (+0.75%) shared the joy. ITV (+12.01%) surged after a report noted Endemol has refused to rule out a bid. RIO TINTO (+2.15%) was close to selling its Alcan Packaging unit and its US thermal coal operations, The Sunday Telegraph reported. THOMAS COOK (+1.03%) wants to merge its Condor carrier with TUIfly and Lufthansa's Germanwings, FT Deutschland reported. FRIENDS PROVIDENT (+1.7%) cancelled the sale of Pantheon. PRUDENTIAL (+2.34%) and LEGAL & GENERAL (+2.38%) were said to be eyeing Equitable Life. BRADFORD & BINGLEY (+11.58%) jumped after press reports that the FSA would accelerate efforts to broker a potential takeover of the bank once its rights issue is completed. Finally, traders noted recurring rumours that Irish horse racing tycoons John Magnier and JP McManus could be eyeing LADBROKES (+4.26%).

PARIS

The CAC 40 (+1.02%) ended in the black on Monday, though off highs as Wall Street turned flat to lower. Locally, financials were especially in fine fettle: SOCGEN (+1.6%), CREDIT AGRICOLE (+2.51%), AXA (+2.43%). BNP PARIBAS (+1.36%) is part of a group of serious suitors for Dresdner Bank, German newspaper Handelsblatt reported. Elsewhere, EADS (+6.15%) unit Airbus may announce about US$60bn of orders at this week's Farnborough air show, Le Figaro reported. News of orders is already trickling through, with Etihad announcing a 30 plane order worth US$11bn at list prices. CARREFOUR (+1.43%) won't proceed with an initial share sale of its property unit if the price doesn't correspond to the market value of its assets, Le Journal des Finances reported, citing CEO Jose Luis Duran. ARCELOR MITTAL (+0.09%) has agreed to buy the 35% of its Turkish stainless steel service centre Uginox (FY revenues of c.US$102m) owned by Primex. No financial details were disclosed. Goldman Sachs upgraded UNIBAIL-RODAMCO (+4.17%) to buy from neutral. In the wider market, SAFRAN (+6.89%) and General Electric announced the signing of an agreement to extend their 50/50 commercial aircraft engine j/v CFM International until 2040.

FRANKFURT

Xetra-Dax (+0.76%) closed higher, but off intra-day highs as Wall Street slipped lower as mortgage lenders Freddie Mac and Fannie Mae were moving in opposite directions, with the former trading lower. Locally, M&A was at the forefront today, with banking stocks rising amid Santander's bid for Alliance & Leicester. COMMERZBANK (+1.84%) rose. FinancialNews wrote that the German bank could strengthen parts of its investment bank if it is successful in its bid to acquire ALLIANZ's (+0.33%) Dresdner Bank. CONTINENTAL (+21.94%) confirmed that Schaeffler Group made a bid approach. In other M&A news, Thomas Cook wants to merge its Condor carrier with TUIfly and LUFTHANSA's (+0.08%) Germanwings after it withdrew plans to merge Condor with AIR BERLIN (-0.55%), FT Deutschland reported. GFK (+4.63%) is determined not to take unreasonable financial risks in its attempt to take over British peer Taylor Nelson Sofres, chief executive Klaus Wuebbenhorst told Welt am Sonntag. Traders noted rumours that SAP (+0.46%) will make a EUR 10.50 bid for IDS SCHEER (+23.91%) and that Mr Scheer is willing to sell its stake. In other news, HENKEL (+0.26%) is expected to raise prices as raw material costs soar, according to FAZ. BMW (-1.88%) dropped after Deutsche Bank downgraded to hold from buy, slashing target to EUR 31 from EUR 60, saying the auto maker will not be able to meet its own guidance.

MILAN

Piazza Affari ended higher, while Wall Street was trading flat to lower with investors worrying about the economy following the Fed's announcement that it will bail out Freddie Mac and Fannie Mae. Back in Milan, INTESA SANPAOLO's (-0.23%) plan to save ALITALIA aims to put the carrier into administration under the 'Marzano law', creating a new Alitalia with a greater role for the banks, according to Saturday's Milano Finanza. Intesa is expected to present the plan by 10 August. In M&A news, Saturday's Milano Finanza reported that B.POP.EMILIA's (-0.28%) CEO, Guido Leoni, will recommend at the bank's next meeting to abandon plans to buy Banca delle Marche. The paper also reported that an Italian investment bank has drawn up plans for a potential merger of A2A (+0.22%) and EDISON (+0.48%). Saturday's Il Sole 24 Ore reported that GENERALI (+0.96%) will invest EUR 300m in UK hedge fund Tenax Financial. In other news, Sunday's Il Sole 24 Ore wrote that it sees SARAS's (-1.54%) FY08 EBITDA increasing by 6% to EUR 630m. FASTWEB's (+0.4%) CEO Stefano Parisi could hand in his resignation to become managing director of RAI, according to La Repubblica. The Fossati family is expected to present a plan for TELECOM ITALIA (-1.48%) after the telco's 1H results, according to Saturday's Il Sole 24 Ore. Said that the plan would focus on marketing, attention to consumer needs and added value to existing services.

SPAIN

The Ibex 35 came off highs in late trade with SANTANDER and BANCO POPULAR ending lower. Gains elsewhere still ensured a positive finish, however. Wall Street was trading flat to lower amid concerns over mortgage finance firms. M&A action was centre stage in Spain, as SANTANDER (+0.09%) has agreed to buy Alliance & Leicester in a deal valuing the UK group at GBP1.259bn. Santander sees ROI in 2009 of 14% and 16% in 2010. Elsewhere, FERROVIAL's (+4.0%) BAA announced further progress on refinancing, saying that the Association of British Insurers has accepted its proposals to migrate existing bondholders into an investment-grade, ring-fenced structure. IBERDROLA (+0.37%) sold 51% of its Chilean water unit Empresa de Servicios Sanitarios de Los Lagos to AGBAR's (+0.25%) Aguas Andinas for EUR 103.3m, according to ABC. UNION FENOSA (+0.18%) has undertaken a 3-for-1 share split. SOL MELIA (+2.22%) is finalising a syndicated loan of EUR 150m, Expansion reports. Finally, the CNMV suspended trading in shares of MARTINSA FADESA (-24.74% at time of suspension) after sharp share price falls in recent days, due to problems with refinancing. BANCO POPULAR (-2.74%) - one of Martinsa-Fadesa's creditors - also slipped.


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