Plus more European stocks making headlines in Monday's market
ALLIANCE & LEICESTER Up GBP1.06 to GBP3.26... Santander confirms agreed offer - Santander has agreed to take over Co. through a share swap in a GBP1.259bn deal. Shareholders will receive one SAN share for every 3. Co. will also pay a proposed dividend of 18p. The deal thus values Co. at GBP2.99 per share, or GBP3.17/sh including dividend. Santander says it will then integrate the complementary businesses of Co. and Abbey. Hopes to close the deal in October 2008.
ITV Up GBP0.04 to GBP0.43... Endemol refuses to rule out bid - Endemol's co founder John de Mol has refused to rule out a bid for Co., the FT writes. Co. has talked to strategic investors who want to buy BSkyB's 17.9% stake as a prelude to a possible bid, according to The Observer. BSkyeB will soon find out whether it has won an appeal against a Competition Commission ruling that it must reduce its stake in Co.
ROYAL BANK SCOTLAND Up GBP0.03 to GBP1.85... Rules out sale of Bank of China's stake - Co. rules out the sale of its stake in Bank of China and intends to press ahead with a two-pronged Chinese expansion strategy, the FT reports quoting Co.'s chairman of regional markets Gordon Pell.
PRUDENTIAL Up GBP0.11 to GBP5.02... Insurer giants circle Equitable Life - Co., Legal & General and Swiss Re are among a pack of insurance giants circling Equitable Life, the UK's oldest mutual insurer, according to the Daily Telegraph. Says Equitable has drawn up a shortlist of bidders for the remnants of the former insurance leader, which at its peak was worth GBP26bn and had 1.5m policyholders.
EADS Up EUR 0.66 to EUR 11.40... Airbus wins Etihad order - Co.'s Airbus has won an order from Etihad for 25 A350s, 10 A380s, and 20 A320s. The order is worth US$11bn at list prices. Airbus may announce about US$60bn of orders at this week's Farnborough air show, Le Figaro reported. Separately, Co.'s Airbus unit has compiled a watch list of airline customers that might get into financial difficulties as record fuel prices continue to grip the industry, the FT reports. More than US$100bn of aircraft orders could be cancelled or postponed in the next couple of years as the high price of fuel drives airlines into bankruptcy or forces them to cut spending, The Times writes.
UNIBAIL RODAMCO Up EUR 5.22 to EUR 130.50... Goldman Sachs upgrades to buy from neutral - adding to Pan-Europe Buy List - but cuts target to EUR 159.10 from EUR 183.89. Negative news from the banking sector increases broker's concerns regarding spreads at which refinancing by real estate companies will be achieved in 2009 and 2010. Thinks Central bank rate rises and increasing risk from falling property prices only exacerbate the issue. Cuts EPS forecasts for the sector by an average of 5% for 2009 and 8% for 2010, primarily due to higher interest costs.
CONTINENTAL Up EUR 11.84 to EUR 65.80... Unions oppose Schaeffler deal - German union IG Metall has announced that it will resist Co.'s takeover by Schaeffler Group 'by all means' fearing lack of transparency in the privately held company. Co. earlier confirmed that Schaeffler had made a bid approach. Says held talks last week about a possible investment by Schaeffler in Co. Meanwhile, traders say they are hearing rumours that Bosch could offer a counterbid at EUR 72 per share.
MEDIASET Up EUR 0.08 to EUR 4.05... Endemol refuses to rule out bid for ITV - Endemol's co founder John de Mol has refused to rule out a bid for UK's ITV, the FT writes.
A2A Up EUR 0.00 to EUR 2.24... Bank to study potential merger with Edison - Saturday's MF reported that an Italian investment bank has drawn up plans for a potential merger of Co. and Edison. Says that under the plan, France's EDF would become a shareholder of Co. Meanwhile, Sunday's Il Sole 24 Ore suggested that chairman Giuliano Zuccoli was preparing a plan to simplify Co.'s management structure which would lead to 500 job cuts in order to eliminate duplication of roles and cut costs.
SBM OFFSHORE Down EUR 5.02 to EUR 15.40... Profit warning / Cheuvreux downgrades - Co. says its FY net income may be 20% lower than previously forecast (US$280m) due to higher costs. Cheuvreux downgrades to underperform from selected list. Keeps target at EUR 18.00. Citigroup downgrades to sell from hold. See Broker Views and News - NL.
PHILIPS Up EUR 1.25 to EUR 20.67... Reports positive 2Q results - Co. reports 2Q net income of EUR 720m, including EUR 780m on the sale of TSMC shares and an impairment charge of EUR 299m for NXP, vs an expected net income of EUR 183.5m. EBITA is at EUR 413m, higher than expected. Sales are at EUR 6.463bn vs an expected EUR 6.345bn. EBIT is at EUR 325m, higher than expected. Rabo Securities believe 2Q08 are reasonably well given investors' fears about the effect of consumer spending in 2Q08. See Broker Views and News - NL.
NORSK HYDRO Down NOK9.80 to NOK65.20... 2Q results to be hit by higher costs - Ahead of 2Q results on 22 July, Co. expects to report 2Q u/l EBIT of c.NOK1.6bn vs NOK2.0bn in 1Q08. While Co. is realizing a higher aluminium price during the quarter, it is experiencing significant cost increases in the Aluminium Metal business area. The Aluminium Products business area will deliver a strong result well above the 1Q while a lower spot price for electricity in Norway will have a negative impact on the results in the Energy business area. Co.'s reported EBIT will be significantly negatively impacted by unrealized derivative effects related to its long-term power sourcing contracts.
GETINGE Down SEK2.75 to SEK132.00... 2Q order bookings below forecast - Co. reports 2Q results with net sales of SEK8.558bn (+15% y/y) vs a Reuters forecast of SEK8.571bn, PTP of SEK756m (+16%) in line with forecast, order bookings of SEK9.184bn vs forecast of SEK9.433bn, net profit of SEK544m (+17.5%), EPS of SEK2.61 (+17%) and EBITA before restructuring of SEK1.39bn (+28.6%). Says 2Q cash flow was strong and earnings outlook for the year remains strong.
TANDBERG Up NOK2.20 to NOK88.10... 2Q above forecast across the board - Co. reports 2Q results with revenues of US$195m vs a Reuters forecast of US$190m. The remaining figures are all in line with forecast, EBIT of US$41m, PTP of US$41m, net income of US$29m and EPS of US$0.26.
SANTANDER Up EUR 0.01 to EUR 11.24... Sees GBP180m synergies from A&L deal - Co. expects to capture c.GBP180m in pre-tax cost synergies by merging Alliance & Leicester with Abbey. Aims to reduce combined Abbey/A&L assets by GBP20m-GBP30m over two years. Co. will allocate GBP1bn of capital against balance sheet strengthening and integration costs. Sees ROI in 2009 of 14% and 16% in 2010. Co. will offer one Co. share for every 3 A&L shares. Says the deal values A&L at GBP2.99 per share, or GBP1.259bn (GBP3.17/sh including 18p dividend). Hopes to close the deal in October 2008.
FERROVIAL Up EUR 1.28 to EUR 33.25... BAA reaches agreement with ABI - Co.'s BAA announces further progress on refinancing. Says the Association of British Insurers has accepted its proposals to migrate existing bondholders into an investment-grade, ring-fenced structure. Caja Madrid comments that the final phase of refinancing can now begin, the completion of which will eliminate one of the largest overhangs on the stock.
ACTELION Up CHF1.90 to CHF54.50... Deal with GSK to develop insomnia drug - Co. and GlaxoSmithKline have entered into an exclusive worldwide collaboration (excluding Japan) for Co.'s almorexant, which is in phase III development as a treatment for insomnia. Co. will receive an upfront payment of CHF150m and will be eligible for additional milestone payments of up to CHF2.735bn.