On the Move: BT, Bayer, Soc Gen

Plus: Arcelor, Nestle, Merck, and other European companies making headlines Wednesday

From Standard & Poor's European MarketScope


ARCELOR (SP) was down €0.46 to €19.99. The company launched a bid for Canada's steel manufacturer Dofasco at CAD56 per share. It said the offer represents a premium of about 27.3% and is the largest investment in North America that the company has ever made. INDITEX was up €0.48 to €24.99. Morgan Stanley upgraded the company to overweight from equal weight and set its target price at €28.


NESTLE was up CHF0.50 to CHF396.00. In Zurich, the CEO, said that a recall of millions of liters baby milk products in Europe is a 'storm in a teacup', costing €2.5 million maximum. The products were recalled after traces of ink from their Tetra Pak packaging were found. In Greece, the company's baby milk brand NAN2 is being banned as a precautionary measure.


AIR FRANCE-KLM (AKH ) was up €0.62 to €15.32. The company's second quarter results beat estimates. It said second quarter turnover was +10% to €5.64 billion; operating profit climbed +56% to €528 million; net att. profit €717 million, boosted by merger, synergies and strong passenger traffic. The outlook was clearly positive for the operating result in the second half. Separately, the company will maintain its 2% stake in Alitalia.

SOC GEN was up €1.10 to €101.80. The company has cancelled 7.1 million of its own shares after acquiring 8.6 million since the beginning of fiscal 2005. The number of shares currently held by the company stands at 27.1 million.

TF1 was up €0.20 to €21.27. The company reported nine months operating profit of €280.2 million, -1.7%; net att. profit of €181.20 million, +8.4%; net margin 8.8%; sales €2.055 billion, -0.6%. It said programming costs were up 3.8% year-over-year to €667.4 million.


MERCK (MRK ) was down €3.25 to €69.75. The company 's Chief Executive Bernhard Scheuble resigned late yesterday, unexpectedly, and is being replaced by Michael Roemer. The company gave no reasons for the departure.

BEIERSDORF was up €4.15 to €99.90. The company announced it is planning job cuts and a reduction in production in order to achieve annual savings of about €100 million. The company said it will only make specific decisions about cuts next year. SocGen upgraded the stock to buy from sell after the announcement of the restructuring program.

BAYER (BAY ) was down €0.46 to €33.49. A US jury has said that Monsanto did not infringe the company 's patent on an insect-protection technology for corn and has also found the patent invalid. The company said the result is disappointing and is considering all legal options.


FONDIARIA-SAI was up €1.13 to €26.22. Cheuvreux upped its target to €30 from €27.50 and kept the stock in its selected list. Additionally, the company's stock rallied on renewed rumors that it is planning to shorten its chain of control and/or to delist Milano Assicurazioni, domestic sources said.

United Kingdom BT GROUP (BT ) was up £0.04 to £2.14. Lehman Brothers upped the telecom to overweight from underweight and raises its target price to £2.35 from £2.15. The broker, however, downgraded the telecoms services sector to neutral from positive.

WPP was down £0.08 to £5.63. Shares slipped on news the firm has lost the Nike China contract ahead of the Beijing Olympics to independent agency Wieden & Kennedy, sources said.

JOHNSON MATTHEY was down £0.22 to £12.67. CSFB downgraded the company to neutral from outperform saying shares have performed well into figures and there is limited scope for revising estimates and the share price is now slightly above target price of £12.50.

ANGLO IRISH BANK was up £0.56 to £11.58. The company reported pretax profit for year to September 30 as up 36% to €685.2 million. it proposed a final dividend of €0.0903 bringing the total dividend for the year to €0.1354, an increase of 20% on 2004.

SKYEPHARMA was up £0.02 to £0.56. The stock was higher in strong volumes, on renewed takeover talk. The Daily Telegraph mentioned Swiss group Novartis (NVS ) as a possible bidder at £0.70 per share.


FORTIS was down €0.18 to €25.42. The company reported nine months net profit before divestments of €3.013 billion, +48%; total net profit €3.456 billion. It reported lower impairments on loans.

Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)

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