European Movers: USB, Renault, Philips
LLOYDS TSB was up £0.10 to £4.99... Limited exposure to market dislocation Reports a strong underlying performance. The company says the relatively limited impact of the market dislocation has been more than offset by the significant profit on the sales of non-core businesses. Remains firmly on track to deliver a good performance for the year, and good economic profit growth whilst maintaining a robust capital position. Calculates the impact of the market dislocation has been limited to approximately £200 million at 31 October. The company says it has no direct exposure to US sub-prime Asset Backed Securities and limited indirect exposure through ABS CDOs.
YELL was up £0.23 to £4.19... Citi says buy, upbeat on 2008, 2009 - Citigroup reiterates buy saying continues to be positive on the company At 9.4x CY08 P/E, 8.8x EV/EBITDA and 5.4% dividend yield, broker believes investors are compensated for the near-term uncertainty that still overhangs the shares. Specifically, sees upside to consensus forecasts in the UK and the US. Despite a lack of numbers, assumes no news is good news on 2008. Adds 2009 could be a good year.
LAFARGE was up €8.82 to €116.49... Buys Egyptian cement group Egypt's Orascom Construction has agreed to sell the OCI Cement Group to the company for a total payment of €8.8 billion plus the assumption by the company of US$2.0 billion in debt.
SANOFI-AVENTIS (SNY) was down €0.85 to €64.85... Lovenox in focus as Bayer's experimental drug Rivaroxaban works better than the company 's enoxaparin to prevent blood clots in patients following hip replacement surgery, as shown in a late-stage study.
RENAULT was up €4.62 to €103.63... Merrill ups target/Buys stake in AvtoVAZ - Merrill Lynch ups target to €140 from €130, keeps buy. The company says solid November European sales should be the next catalyst for Renault shares, highlighting to investors the first impact of new products (Twingo, Laguna) on the company 's momentum. Believes the new French eco-tax should support volumes from January. Agrees to buy stake in Russia's AvtoVAZ - the maker of Lada vehicles. No price for the c.25% stake was disclosed. The Sunday Times puts the price at US$1.25 billion.
Q-CELLS was up €4.93 to €95.93... Lands solar wafer supply deal with LDK Solar, with the contract to run from 2009 to 2018, thus securing future growth, the company says.
PREMIERE was up €0.46 to €12.54... Bid rumours lift stock - Market talk has it that French media giant Vivendi may put €1.8 billion on the table for the company Other rumours see Highlight Communications AG and Leo Kirch buying 15% of the company
TOGNUM was up €0.54 to €20.85... the company 's technology in new Puma - the company says the Puma, Germany's new armoured personnel carrier, uses its innovative diesel drive system. Reckons the order volume will be €350 million, with delivery starting in 2010.
FIAT was up €1.02 to €18.74... Could spin off the Auto unit - CEO - CEO Sergio Marchionne said in an interview with Automotive News Europe that the company could consider spinning off its Automobile Unit if the market does not fully value the automaker shares. Marchionne adds that the microcar could be launch by 2009. Avtovaz has signed an agreement with France's Renault, which has agreed to buy a 25% stake in the Russian automaker. Renault beat off the likes of the company and GM to take the stake. UniCredit CEO Alessandro Profumo has reportedly said the bank will sell its 5.2% stake in the company by year end. Sources believe that it is very likely that the stake has already been sold through an equity swap.
ALITALIA was down €0.01 to €0.85...
Chairman prefers Air France business plan - Chairman Maurizio Prato said in an interview with Saturday's Il Corriere della Sera that the Air France-KLM business plan to take control of the company is clearer than that of its rival AP Holding (the group that owns Air One). Adds that the board still needs to understand how the Air One plan actually functions.
IMPREGILO was up €0.12 to €4.93... Hedge funds build stake in the company - Local press reports that several hedge funds are building up large stakes in the company ahead of the expiry of the shareholder pact in June 2008. Il Corriere della Sera says that hedges funds own a total 18.6% in the company
PHILIPS (PHG) was up €1.02 to €29.49... Hedge funds likely to demand cash return - Two US hedge funds, which jointly hold a 1.6% stake in the company , are planning to talk to the company about its operating performance and capital structure. Analysts say they are likely to ask the company to return cash to shareholders as the company will benefit from a new tax law, which will allow it to return up to €6 billion tax-free. Separately, Lehman Brothers removes the company from its European Recommended Portfolio.
STATOILHYDRO (STO) was down NOK2.40 to NOK162.40... The brokers adjust ratings and targets after lowered guidance - ING cuts target to NOK152.70 vs NOK162.70, keeps hold rating. Deutsche Bank downgrades to hold vs buy and cuts target to NOK170 vs NOK200. JP Morgan cuts target to NOK185 vs NOK200, keeps neutral. ABN cuts target to NOK175 vs NOK192, keeps hold. Carnegie downgrades to neutral vs outperform. Goldman cuts target to NOK186 vs NOK206, keeps buy. SocGen upgrades to hold vs sell and keeps target at NOK160.
MOELLER MAERSK was down DKK1400.00 to DKK56500.00... Carnegie downgrades to underperform vs neutral and lowers EPS estimatge for 2008-09 by 10%. The broker notes the company is facing tough challenges, with turnaround being delayed and Maersk Line's risk caught in structural trap.
UNION FENOSA was down €1.37 to €46.39... Credit Suisse issues trading sell alert - Credit Suisse issues a short-term trading sell alert on the company following surprise new legislation from the Spanish government that claws back value derived from the internalisation of CO2 prices. Estimates that the pre-tax impact from the new law on 2008E could be around €155 million. In valuation terms, says this could be equivalent to a max. impact of almost €1 billion, or €3.1 per share. Has fundamental neutral recommendation and €43 price target.
SOGECABLE was up €1.70 to €24.21... M&A, stake-building talk provide boost - the company 's shares move up strongly amid M&A speculation in the sector. Market talk has it that the French media giant may put €1.8 billion on the table for Premiere. Other speculation sees Highlight Communications AG and Leo Kirch buying 15% of the German group. Sources also note the company 's weak performance YTD and add that the company 's leading shareholder Prisa may be increasing its stake once more. In addition, a source comments that the company 's recent US roadshow was well received.
UBS (UBS) was up CHF0.80 to CHF58.00... New capital amid US$10 billion writedown (update) - the company is writing down US$10 billion in subprime holdings and says it is possible it will post a fiscal net loss. Meanwhile, it has reached agreements with two strategic investors to subscribe to an issue of CHF13 billion of mandatory convertible notes. The two investors are Singapore's GIC and an unnamed Middle Eastern investor, which some are speculating could be Abu Dhabi. the company has further approved the re-sale of 36.4 million treasury shares previously intended to be cancelled. the company also proposes to replace the 2007 cash dividend with a stock dividend, ie a bonus issue of new shares. This will boost Tier 1 capital by CHF4.4 billion.