A roundup of Friday's action on major European exchanges
The FTSE 100 (+2.54%) closed solidly higher amid soaring mining stocks. Wall Street was trading mixed amid news of Microsoft’s bid for Yahoo!, while non-farm payrolls were much weaker than expected. In London, miners topped the leaderboard following news that Chinalco and Alcoa are together taking a 12% stake in RIO TINTO (+12.99%). Shining Prospect, a Singapore-based entity wholly owned by Chinalco and into which Alcoa has committed US$1.2bn by way of a convertible instrument, has acquired a nearly 12% stake but does not make a definite statement as to whether it will make a bid or not. BHP BILLITON (+9.82%) rose. BRITISH AIRWAYS (-4.22%) reported flat 9M revenue and added that mitgating rising fuel costs will be a challenge. GREENE KING (+1.27%) said it will meet expectations and group margins remain ahead of last year. DS SMITH (+7.96%) is to invest GBP104m in the UK Paper and Corrugated Packaging business. Three private equity firms are in the bid race for MITCHELLS & BUTLERS (+1.01%) says The Times: TPG, CVC Capital Partners and Cinven. MITIE (+3.94%) said performance is on track. BIFFA (+6.25%) climbed on rumours of a counterbid by Macquarie at GBP4.00/share. FKI (+33.33%) soared having confirmed an approach, while traders reported talk of Home Depot eyeing KINGFISHER (+3.57%). RYANAIR (-4.67%) shares fall on profit-warning rumours.
The CAC 40 (+2.22%) closed firmly in the black, with Wall Street trading mixed amid news Microsoft has offered to buy Yahoo! for US$44.6bn and the publication of dismal non-farm payrolls data. Locally, ARCELOR MITTAL (+7.03%) gained on reports the EU’s threat on steel tariffs from China has been extended to Taiwan and South Korea, with a new probe into cheap imports that compete against EU producers. CREDIT AGRICOLE (+2.15%) has engaged its unit Calyon and hired asset management firm Lazard to advise on a potential bid for SOCGEN (+5.53%), according to Les Echos. This comes after BNP PARIBAS (-0.84%) admitted yesterday it too was looking at the dossier. VINCI (+5.68%) posted FY07 sales of EUR 30.4bn, +16.8%, better than expected. RENAULT (+1.02%) gained as Nissan posted 3Q operating profit of JPY211.94bn (US$1.99bn), with sales up 18.2% y/y. In the wider market, sources noted rumours having it that GE could be in talks with KKR and WENDEL (+7.2%) over a bid for LEGRAND (+4.94%). AREVA (+1.38%) reported 4Q07 sales of EUR 3.85bn, up 16.7%, better than expected.
With Wall Street trading generally positive as Microsoft announced its interest in Yahoo and US jobs data showed their first decline in four and a half years, Xetra-Dax (+1.71%) closed firm. Locally, financial stocks were in focus as, according to reports on CNBC, eight banks, including ALLIANZ’s (+1.48%) Dresdner, have formed a consortium to seek a rescue plan for bond insurers. The group is understood to be working together on a solution with bond insurers and the NY State Insurance Department. In other news: THYSSENKRUPP (+5.99%) plans to buy back up to 3% more stock, some 15.8m of its own shares. BMW (+1.77%) saw sales in China jump 42% last year as economic growth there improved demand. India’s Business Standard reported that LUFTHANSA (-0.25%) is in talks with Jet Airways and QuickJet about operating a cargo alliance. SINGULUS (+15.76%) is buying the Blu-ray business of Switzerland’s Oerlikon. This is considered an important step towards further consolidation within the optical disc production equipment industry. GRENKELEASING (-4.67%) posted 2007 net earnings of EUR 32.1m, which includes a non-recurring, positive tax effect of EUR 1.5m. On the broker front, Goldman Sachs added SIEMENS (+3.72%) to its conviction buy list.
Piazza Affari ended the last session of the week higher, while Wall Street traded mixed at European close following a mixed bag of news, with Microsoft launching an offer for Yahoo! and disappointing payrolls figures. Of local note, airport operator, SEA, claimed EUR 1.25bn in damages from ALITALIA (+1.3%) for cutting flights at Malpensa by 70%, according to Il Corriere della Sera. On the earnings front, BULGARI (+2.27%) posted FY07 revenues in line with consensus at EUR 1.093bn, up, 8.2% y/y, while 4Q07 sales rose 7.4% to EUR 347.7m. The jeweller’s CEO, Francesco Trapani, said he feels very confident the group can meet its FY07 net profit target. UNIPOL (+5.99%) yesterday said its net FY07 consolidated profit rose 27% to EUR 460m. Explained that the rise was in line with its 2006-09 industrial plan. UNICREDIT (+3.34%) said its US subprime exposure fell to EUR 170m in 4Q07. In M&A news, LOTTOMATICA’s (+1.79%) unit GTECH and Medstroms launched an offer of SEK19/sh in cash for Boss Media. ENI (+0.79%) secured 84.97% of UK’s Burren Energy and plans to delist it. In other news, UBI BANCA (+1.24%) said 32% of its integration activities were completed vs the 30% target set in its 2007-10 business plan. ERG (+1.44%) postponed the maintenance shutdown of its SAB Nord refinery in Sicily to 1Q09.
The AEX (+2.33%) closed firmly in the black, with Wall Street trading mixed amid news Microsoft has offered to buy Yahoo! for US$44.6bn and the publication of dismal non-farm payrolls data. Locally, ARCELOR-MITTAL (+6.97%) was the strongest performer on the AEX, recovering from recent losses as the EU continued to threaten rivals of European steel producers with higher tariffs as the lobby to impose steel tariffs from China has been extended to Taiwan and South Korea, Bloomberg reported. Financials also continued to lift the AEX. Rumours that AEGON (+2.91%) may face subprime related write-downs have apparently been denied and, as a result, the stock turned higher once more. FORTIS (+2.69%) was in focus as the takeover of parts of ABN Amro will lead to more job cuts than previously expected, according to NRC Handelsblad. ROYAL DUTCH (-0.33%) was one of only two blue-chip fallers as it saw target price cuts at major brokers following its 4Q results yesterday. In the wider market, ARCADIS (+2.59%) announced it has acquired LFR Inc. in the US, an environmental services company with 2007 gross revenue of US$127m. TEN CATE (+0.05%) has completed the purchase of Composix for US$70m. The acquisition is expected to boost earnings. Ten Cate reiterated that FY07 profits will rise 25%.