On the Move: Royal Bank of Scotland, Sainsbury, Inmocaral
SAINSBURY was up £0.37 to £5.67. Shares continue to stay strong after a block of 250 million shares was traded at £5.75/sh in early trade. Talk is that Alliance Bernstein, that has close to 254 million shares, has sold off its stake in the company to Three Delta, which is backed by Qatari Investment Authority. Speculation is that Alliance Bernstein will reinvest the proceeds in ITV and Debenhams. According to sources, Three Delta is run by Paul Taylor, who was earlier with property tycoon Robert Tchenguiz. Tchenguiz holds 5.1% in the company and is pushing to split the operating section from the property side. Note that: Sheikh Hamad bin Jassim bin Jaber Al Thani, a member of the Qatari ruling family had disclosed on Feb. 6 that he had about a 1% stake the company via derivatives contracts.
ROYAL BANK SCOTLAND was down £0.26 to £19.87. The consortium comprising the company, Fortis and Santander has indicated a price of €39/sh for ABN Amro (ABN). The offer price is 13% higher than the Barclays offer as of market close yesterday. The offer is 70% in cash and 30% in the company shares. The Banks say the execution risk would be lower than in a transaction with Barclays. The consortium adds that its proposals are superior for ABN's shareholders and are straightforward from a shareholder, regulatory and execution perspective. The banks have requested that ABN takes steps to ensure that LaSalle remains within ABN. ABN says has a 14 day clause to accept alternative offers for LaSalle, which is being sold to Bank of America. Also, BofA has the right to match the bidder in the next 5 business days.
REUTERS (RTRSY) was down £0.05 to £4.79. The company posted first quarter07 revenue £626 million, underlying revenue growth 6.5% - which includes 2pp from Core Plus. The underlying revenue growth is higher than analyst expectations of 6.2%. The company says on an actual basis, the revenue decline of 1.1% resulted from currency effects, principally the weakening US dollar. Keeps fiscal year revenue and margin guidance unchanged. The company says is well-positioned to deliver on fiscal expectations. the company 's share of global financial information and services revenue was 27%, a small improvement over 2005.
ALCATEL-LUCENT (ALU) was up €0.21 to €9.83. The company announced a contract with Globacom, Nigeria's second national operator, to supply and install a wireless network for an undisclosed amount. Goldman Sachs upgrades to buy from neutral and ups target to €11.20 from €9.50, believing that the company 's order recovery (with a book to bill of 1.3x at the end of first quarter) meaningfully improves risk-reward, despite 'soft' first quarter revenues announced yesterday as part of a release issuing unaudited first quarter figures.
MICHELIN was up €3.43 to €91.93. The company reports first quarter sales of €4.20 billion (+5.5%) vs analysts estimate of €4.15 billion. The company says operating margin should post 'tangible increase'. The company says 2007 profit to be in line with 2010 targets. In broker news, SocGen lifts target to €105 from €100, keeping buy; UBS raises target to €110 from €100, keeping buy; Merrill Lynch ups target to EUR 110 from €100, keeping buy; and Kepler Equities lifts target to €101 from €91, keeping buy. Brokers are buoyant on good sales and cost-cutting.
SIEMENS (SI) was up €0.11 to €89.31. Fiscal second quarter numbers top expectations as CEO Klaus Kleinfeld's future at the helm of the company hangs in the balance as the board votes today on whether to renew his contract amid a widening corruption scandal.
Preliminary results show group profit from operations 9% ahead year-over-year at €1.96 billion and net income 12% ahead at €1.26 billion. On the broker front, Cheuvreux downgrades to underperform from selected list, cutting the target to €95 from €105.
MERCK was up €3.26 to €99.02. Reports first quarter operating profit of €321.3 million - a touch above expectations, on in-line sales at €2.17 billion. For the quarter, the company tabled a net loss of €8.3 million. A consensus view was for net income of €8 million. the company expects to markedly reduce its net debt, which stood at €5.5 billion at the end of last quarter, but gave no details.
WINCOR NIXDORF was up €2.38 to €70.83. Reports first half EBITA of €90 million - up 20% year-over-year - with interim sales at €1.09 billion. the company raised its 2006/07 EBITA growth forecast to 15% from 8% and sales forecast from to 9% from 6%.
SWEDBANK was up SEK8.50 to SEK268.50. The company reports first quarter total revenues of SEK7.8 billion vs SEK7.6 billion forecast, operating profit of SEK3.8 billion vs SEK3.6 billion forecast, NII at SEK4.5 billion vs SEK4.3 billion forecast and commission income at SEk2.3 billion - in line with forecasts. The company says it made financial gains of SEK530 million in first quarter, while it sees slowdown in lending growth in the Baltic region.
AKER KVAERNER was up NOK4.50 to NOK141.75. First quarter EBITDA comes in at NOK856 million vs NOK829 million forecast, operating profit comes in at NOK772 million vs NOK741 million forecast, pretax profit comes in at NOK798 million vs NOK725 million forecast and order backlog amounts to NOK62.8 million vs NOK60.8 million forecast.
SANTANDER was down €0.03 to €13.33. The consortium comprising Royal Bank of Scotland, Fortis, and Santander has indicated a price of €39/sh, subject to due diligence. Press conference will take place at 11:15 GMT. The offer price is 13% higher than the Barclays's offer as of the market close yesterday. The deal with be approximately 70% in cash, 30% in RBS shares. The banks believe that execution risk would be lower than in a transaction with Barclays. The consortium adds that its proposals are superior for ABN Amro shareholders and are straightforward from a shareholder, regulatory and execution perspective. The banks have requested that ABN Amro takes such steps to ensure that LaSalle remains within the ABN.
INMOCARAL was down €0.16 to €4.17. The FT notes that the sell-off in Spanish property stocks yesterday dragged down related industries such as construction and banking and caused a 2.7% drop in the Ibex 35. The company says investors got the jitters after Astroc went into free-fall last week when its audited accounts revealed some of last year's profits came from the sale of Astroc assets to Enrique Bauelos, its chairman.
FIAT was up €0.51 to €21.44. A leading Italian broker says that the company 's buy-back started yesterday, with the purchase of 3.8 million ordinary shares at an average price of €20.95/share. Banca Caboto adds that the combination of the company reaching its target, positive news flow and the buy-back will contribute to support the company 's share performance.
GEBERIT was up CHF206.00 to CHF2161.00. First quarter net profit tops expectations - coming in 36% higher year-over-year at CHF130 million. For 2007, the company expects an 'overproportionate' rise in EPS.
NOVARTIS (NVS) was down CHF0.40 to CHF69.65. Buys rights to anti-smoking vaccine made by Switzerland's Cytos Biotechnology, paying upfront CHF35 million.
TOMTOM was down €0.46 to €29.53. The company reports first quarter sales of €296 million, below consensus of €314 million. Quarterly EBIT comes in at 57 million vs an expected 60 million. The company reiterates its 2007 outlook.