European Movers: BHP, Soc Gen, Postbank
Down GBP0.77 to GBP15.20
Rio rejects offer as too low
Rio Tinto rejects Co.'s sweetened offer, seeing it as too low, according to a statement. Co. has launched 3.4-for-1 all share bid for Rio Tinto. Reports 1H revenue of US$25.539bn, +15.5%; u/l EBITDA of US$11.2bn, +6.4%; u/l EBIT of US$9.6bn, +5.4%. Says attributable profit fell 2.8% to US$6.0bn; EPS US$1.068, +2.8%. Says these were record results for iron ore, petroleum and manganese. Raises interim dividend by 45% to US$0.29.
Down GBP0.17 to GBP54.17
Rejects BHP bid as too low
Co. has rejected BHP Billiton's bid as too low, according to a statement. BHP Billiton has launched a US$147.4bn takeover bid for Co. Shareholders to receive 3.4 BHP Billiton shares for each one in Co. The offer contains a minimum acceptance condition requiring acceptances of more than 50%. BHP Billiton also proposes a buy-back of up to US$30bn within one year of completing the acquisition. Earlier today, The Times reported sources close to Chinalco had said that it was likely that China would intervene and counterbid if BHP raised its offer, although observers said it could face regulatory hurdles. The Chinese are already seeking approval in Australia to raise their holding to 19.9% and may go further to ensure that BHP is blocked.
Up GBP0.38 to GBP5.77
2Q net adds below ests, 1H op profit down
Posts 2Q net customer adds 167,000 to 8.832m, churn reduced to 10%. Says 1H revenue was GBP2.458bn, +11%; operating profit GBP295m, -25%, interim DPS 7.1p, +8%. Broadband customers at 31 December 1.199m. Anticipate FY operating profit performance to be in line with expectations. Analysts had expected 2Q net customer growth of 170,000-188,000, churn of 10.3%.
Down GBP0.13 to GBP5.97
4Q numbers in line
Posts 4Q total worldwide sales of GBP38.583bn, +25%; worldwide life and pensions sales GBP31.60bn, +22%; UK total sales GBP14.406bn, +6%; Europe total sales GBP16.486bn, +19%; North America pro-forma GBP3.60bn, +39%; Asia Pacific GBP4.089bn, +60%. Says the estimated cost of UK adverse weather rose GBP75m to GBP475m, higher than first estimated.
Down GBP0.06 to GBP4.83
Most businesses ahead of expectations
Says 1Q revenues rose 2% y/y and results are ahead of its expectations. Reports continued strong growth from DMG Information and good progress for Euromoney Institutional Investor, DMG World Media and DMG Radio Australia. Thinks it is too early to predict the outcome of the full year, but it is pleased with the start to the financial year. Adds most of businesses continue to perform well, and above expectations, despite the troubles in the financial and property markets.
Up EUR 2.55 to EUR 81.75
HSBC has cash to pay EUR 126 per share – ML
Traders note market rumour having it that HSBC may bid for Co. Separately, Merrill Lynch estimates that HSBC has cash to pay EUR 126 per Co. share. Thinks that an acquisition of Co. for up to EUR 126 per share (with EUR 15bn of cash) could be earnings neutral in 2009 and mildly accretive thereafter. Says that other things equal, broker probably would be more positively disposed to HSBC/Co. than HSBC alone because of the lower US$, higher emerging markets mix. In broker news, ABN Amro cuts target to EUR 90 from EUR 135, keeps hold. Says speculation has seemingly overtaken fundamentals as the key share price driver. However, believes a domestic bid is largely priced in and broker sees a case to take near-term profits, even if longer-term independence is in question.
Down EUR 12.08 to EUR 129.62
Sees no sales growth in FY08 / Cheuvreux downgrades
Last night, Co. posted 4Q sales of EUR 1.629bn, up 13.1% and beating consensus of EUR 1.56bn. FY07 sales climb to EUR 6.141bn, up 10.8% and above consensus of EUR 6.09bn. Sees FY08 sales in line with FY07 on a comparable basis. In response, Cheuvreux downgrades to underperform from outperform and cuts target to EUR 150 from EUR 192. Removes its speculative premium. FY08 sales guidance leads broker to cut FY08 & FY09 EPS ests. by 4% and 11%. See Broker Views & News - France
Up EUR 5.51 to EUR 57.
Stock jumps on FTD report of merger plan
Deutsche Post is looking for merger candidates for Co., according to the FTD, with exploratory talks understood to have already been held with Deutsche Bank, Allianz and ING.
Up EUR 0.89 to EUR 15.34
In talks with Temasek Holdings with regard to Co. merging its shipping operations with the Singapore state investor, writes the FT, citing unnamed sources.
Down EUR 4.14 to EUR 13.16
Announces cap injection amid slide into FY loss
Co. plans a EUR 250m capital increase to help repay debt. Reports have it that investor Otto Happel and others have agreed to subscribe to 50% of the capital injection. Meanwhile, Co. says it will exit some countries or merge activities. This comes as it misses its 2007 targets, with last year's operating loss coming in at EUR 210m after an EBIT gain of EUR 19m the year before. There will be no dividend payment before 2010. On the broker front, Citigroup cuts target to EUR 14 from EUR 18, reiterating sell. See Broker Views & News - Germany.
Up EUR 0.29 to EUR 5.35
Goldman adds to conviction buy list and upgrades to buy from neutral, on grounds of low valuation. Lowers target to EUR 9.30 from EUR 10.95, as factors a more bearish macro environment, although not a full hard landing scenario. Regarding sector, says that Italian financial advisor networks remains solid. In the short term, says market turmoil will lead to share price volatility, given that both net inflows and growth in AUMs depend on equity market performance. However, sees current share price weakness as a buy opportunity for Co.
Up EUR 0.15 to EUR 1.52
Rumour Vodafone could present bid
Rumours have it that Vodafone could be interested in bidding for Co. and could offer EUR 2/sh, according to traders. Separately, Co. announced that its 6-for-17 rights issue, which closed on Friday, was 97.85% subscribed. Says that during the offer period, a total of 415.312m pre-emption rights were subscribed. This corresponds to 146.581m shares, or 97.85% of the total 149.793m shares offered.
Up EUR 0.12 to EUR 7.13
Rumour DZ Bank could pull out bid plan
Unsubstantiated rumours have it that Germany's DZ Bank could abandon bid for Co. as the due diligence gave negative answers.
Unchanged at EUR 5.00
Office Depot more likely suitor – report
Contrary to a newspaper report in De Telegraaf yesterday, Co. says it is not in talks with Staples regarding a takeover of Co. Meanwhile investment site IEX.nl reports that a takeover of Co. by Staples would make no sense, mainly because it is doing too well to have the need for an acquisition. The site suggests that Office Depot would be a more likely suitor as it is also finding it difficult to compete with Staples. Says that there is more behind the M&A story than just rumours. Co. will report 4Q numbers tomorrow, net profit is expected at EUR 20m, operating profit at EUR 55m and sales at EUR 1450m, according to a Reuters consensus.
Down SEK0.50 to SEK85.50
Maintains outlook for European truck market
Co. says 4Q sales rose 25% to SEK84.6bn, with FY net sales up 10% to SEK285.4bn. Adds 4Q op. income rose 12% to SEK5.775bn, with FY op. income up 9% to SEK22.231bn. Board proposes ordinary dividend of SEK5.50 per share. Sees truck market in Europe growing 5-10% in 2008 vs 2007. Thinks North American market will remain at same level as 2007.
Up SEK1.00 to SEK100.00
4Q beats consensus - 2008 EBIT seen in line y/y
Co. reports 4Q sales of SEK27.64bn vs a Reuters estimate of SEK27.8bn and PTP of SEK1.58bn vs SEK1.16bn. For 2008 Co. says its difficult to forecast, but expects EBIT to be in line y/y. Co. also sees US launch costs of SEK100m and European employee reduction costs of SEK400m, with the latter affecting 1Q08..
Down SEK6.75 to SEK54.75
Posts FY op. revenue of SEK54.112bn
Co. says FY07 operating revenue rose 4.7% to SEK54.112bn. Adds number of passengers rose 2.9% to 31.2m. says net income for the period was SEK636m and EPS SEK3.87. Co. commments that performance of the first three quarters was positive, while 4Q was affected by Co.
's withdrawal of the Q400 aircraft and replacement with leased capacity. Sees negative earnings effect in 2008 as a result of the Q400 decision of c.SEK700m-SEK800m.
Down NOK14.75 to NOK126.00
Delay and cost overrun to Moses Lake plant
Co. says it sees a delay and cost overrun for the Moses Lake, Washington, granulated polysilicon plant. Says the cost estimate will be increased by close to 20% from the US$660m previously expected. Adds mechanical completion of the plant is delayed by around two months. Says production is now scheduled to start in late 4Q08.
Down SEK6.00 to SEK335.50
4Q earnings top forecasts/ Goldman cuts target
Co. says 4Q net sales rose 21.3% to SEK7.22bn with adjusted EBITA of SEK1.675bn. Says EPS came in at SEK9.66. Earnings are ahead of consensus expectations. Board will propose at AGM a dividend of SEK9.00 and a 4:1 share split. Adds a new mandate to repurchase up to 5% of shares will also be proposed. Says expects demand to remain at current high level. Goldman reduces target to SEK350 from SEK360, keeps neutral.
Up EUR 0.21 to EUR 2.85
FY07 net profit +20% y/y
Co. delivers FY07 results. Says net profit rose c.20% to EUR 731m while revenues rose 12% y/y to EUR 15.2bn. Adds dividend will rise 44% to EUR 0.13.
Up EUR 0.35 to EUR 10.20
Savings banks increase stake – press
Savings banks Unicaja, Caja Castilla La Mancha, Caja Murcia and Caja Duero have increased their joint stake in Co. by 0.6%, according to press reports.
Down CHF1.35 to CHF57.80
ABN Amro downgrades to hold as it thinks Co. will suffer from second-round effects (a revenue slowdown and a turn in the credit cycle) through 2008. Broker says banks such as Co., with significant exposure to the 'originate and distribute' model and capital markets revenues are most exposed. Vontobel lowers price target to CHF68 from CHF85 in the run-up to 4Q results on 12 February, keeps at hold.
Down CHF0.15 to CHF75.80
ABN Amro downgrades to sell
Broker says that as much as it believes in the longer-term structural growth story, it believes wealth management is also a cyclical business and not immune from challenging markets. On the back of pressure on revenue margins and managed asset growth as well as negative operating leverage, it notes that the major Swiss banks' WM earnings fell by 33-42% over 2000-02. It thinks Co. is particulary vulnerable. Keeps price target at CHF60. Deutsche Bank cuts price target to CHF76 from CHF90.
Down CHF0.04 to CHF42.42
RBI recalls banking licence / Broker changes
Mint.com writes that Co.'s reluctance to cooperate with Indian authorities to unravel a multinational trail of money transfers between Indian stud farm owner Hasan Ali Khan and a fugitive Saudi arms dealer has not only cost Co. its deal to buy the Indian mutual fund business of Standard Chartered Bank for US$118.2m but also a presence in the booming Indian banking landscape. After initially clearing it, Mint says the Reserve Bank of India (RBI) has put on hold a banking licence to Co. Separately, Deutsche cuts price target to CHF62 from CHF70, reiterates buy. ABN cuts target price to CHF42 from CHF70, maintains hold.
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