European Movers: British Energy, Soc Gen, UBS
Up GBP0.60 to GBP6.32
Brokers up target post bid news
Pali raises target to GBP6.29 from GBP5.37, retains neutral. ING upgrades to hold from sell, raises target to GBP6.60 from GBP5.10. Thinks potential acquirers could include: RWE, E.ON, EDF, GDF-Suez and Centrica, of which the most likely could include RWE (BE would reduce the carbon intensity of RWE's coal-dominated fleet); EDF (BE would complement EDFs nuclear fleet); and Centrica (BE would balance Centrica's long customer base). But points out that none has made any public comment on this. Co. says is in talks with interested parties which could lead to a business combination or an offer.
Down GBP0.45 to GBP4.87
1H trading profit in line, outlook gloomy
Posts 1H trading profit GBP300m, -23.1%; PTP GBP233m, -29.4%; revenue GBP8.029bn, +2.0%; EPS 26.69p, -31.1%; interim DPS 11.25p, +3.7. Expects business conditions in a number of markets to become more challenging. Adds in the US, housing market is likely to deteriorate further and put additional pressure on the RMI market. Says the US commercial and industrial market is likely to remain stable for the next few months, but soften thereafter. Analysts had forecast 1H trading profit of between GBP288.6m and GBP333m; PTP from GBP216.9m to GBP223m and EPS of 24.07p and 25.8p.
Down EUR 5.77 to EUR 62.98
Bear Stearns crisis puts financials under spotlight
Financial stocks will be in focus following the buyout of crisis-hit Bear Stearns by JP Morgan for US$236m. Press reports suggest the move could impact on current valuations of financials worldwide.
Down EUR 1.68 to EUR 48.99.
To lower bid price for Brazil unit
Co. says that, following the recent dividend payment, it has decided to lower the price offered to minority shareholders of its Brazilian unit Inox Brasil. Co. will now pay BRL94.55 per ordinary share (vs BRL100 previously) and BRL94 per pref share. The total amount of the operation will be c.US$1.760bn. In broker news, Goldman Sachs lifts target to EUR 55 from EUR 52, keeps neutral. Looking at the European Steel sector, broker For 2009, assumes margin lost in 2008 (from higher than expected iron ore settlements this year) is recaptured in higher steel prices. Interpipe, the Ukrainian steel company, is preparing what is likely to be one of the biggest floats in London this year, which should value the group at about US$4.5bn, The Sunday Times reports.
Down EUR 0.70 to EUR 15.28
Italian government to meet today on Air France offer
Italy's Transport Minister Alessandro Bianchi said that the government will hold a meeting today to review Co.'s's offer for Alitalia. Added that unions, who the government will meet tomorrow, have reservations about job security and Co.'s industrial plan. Co. has agreed to acquire Alitalia for less than one fifth of its market price. Alitalia's board voted unanimously to accept the all-share offer of EUR 139m (1 Co. share for 160 Alitalia shares). The deal has to be signed off by the Italian Government and aviation unions.
Down EUR 13.35 to EUR 66.75
S&P Eq.Research downgrades after profit warning
S&P Eq. Research downgrades to sell from buy and cuts target to EUR 68 from EUR 102, after Co. issued a profit warning this morning. After reviewing 39 large projects, Co. unveiled EUR 900m in write-downs, largely related to turnkey power projects. Beyond the provision itself, however, the analyst perceives an escalation of critical risks in this area, possible cascading losses in the future and guidance likely to be revised downward for 2Q08. Notes that 23 projects (20%) are still under review until the end of the month.
Up EUR 1.15 to EUR 158.30
CEO expects to remain after Porsche control
Co.'s chief executive Martin Winterkorn expects to remain a manager in the company after Porsche AG becomes the German carmaker's majority shareholder, according to an interview in Frankfurter Allgemeine Zeitung. In broker news, Goldman raises target to EUR 175 from EUR 170, maintains neutral recommendation. Continues to view Co.
as an attractive industrial asset offering substantial growth and earnings potential.
Down EUR 0.14 to EUR 0.39
Italian government to meet today on Air France offer
Italy's Transport Minister Alessandro Bianchi said that the government will hold a meeting today to review Air France-KLM's offer for Co. Added that unions, who the government will meet tomorrow, have reservations about job security and Air France-KLM's industrial plan. Air France-KLM has agreed to acquire Co. for less than one fifth of its market price. Co.'s board voted unanimously to accept the offer of EUR 139m. Press reports that the accord must to be signed off by the Italian Government and aviation unions.
Down EUR 0.19 to EUR 4.25
Brokers downgrade stock
Westlb downgrades to hold from add and cuts target price to EUR 5 from EUR 6.30, post FY figures published on Thursday and as a consequence of the limited upside for the stock. KBW downgrades to market perform from outperform and cuts target to EUR 5.60 from EUR 6.60. Says that despite being 8% below 2008 consensus pre-results, further lowers FY08/FY09 EPS by an average 11%, mainly on lower MIB and asset management fees. Adds that Co. has several growth engines; however, a still low capital base, uncertain revenue outlook and an almost certain significant cut by consensus forecasts explain broker's downgrade. Co. could take another few weeks to reach a final decision on the sale of its 186 branches to a group of lenders to meet antitrust requirements, according to Reuters. Adds that the deal could be worth EUR 750m.
Down EUR 0.51 to EUR 19.91
To build high-speed trains with Bombardier – press
Co.'s unit AnsaldoBreda and Bombardier could announce today the construction of a new generation of high-speed trains, reports Il Corriere della Sera. Ahead of today's FY report, Merrill Lynch estimates EBITDA of EUR 1.363bn, with sales of EUR 13.474bn and EPS of EUR 1.26.
ROYAL DUTCH SHELL (NL)
Down EUR 0.93 to EUR 21.44
2007 yr-end net reserves flat y/y
Co. says added 1.4b boe in 2007, which will take the total oil and gas resources estimates to some 66b boe, with a resources life of some 55 years. Adds total net reserves attributable to shareholders at end-2007 were 11.9b boe, unchanged y/y. Co. did not give any information on its growth targets in the strategy update.
Down SEK3.75 to SEK87.25.
Reaches 3 year agreement with UAW
Co. says it has reached a 3 year agreement with the United Auto Workers concerning 2600 employees. This means the strike, which started on 1 February, is now over and workers will return to the plant in New River Valley on March 24.
Down EUR 0.05 to EUR 2.79
Enters Russian markets through acquisitions
Co. says it will enter the Russian market by acquiring a 75% holding in two companies, a pharma retailer and a wholesaler, at an estimates cost of EUR 70m-EUR 90m. Co. plans to buy the remaining 25% in each group in 2010.
Down EUR 2.55 to EUR 46.75
Airlines unite for break-up of BAA
Bosses of 4 airlines (easyJet, Ryanair, Virgin and BMI) will urge transport secretary Ruth kelly to reform airport regulation and push for a break-up of Co.'s BAA, The Sunday Times writes.
Up EUR 1.60 to EUR 18.90
Given until 26 March to meet debt payment
Co. has announced that it has been given until March 26 to meet a EUR 362m debt payment that was due today. Adds that it reached an agreement with most of its creditor banks to restructure the debt raised last year for the acquisition of Fadesa.
Down CHF3.94 to CHF24.50
May cut up to 8,000 jobs - press
According to a report in SonntagsZeitung, Co. may cut as many as 8,000 jobs globally.
Down CHF17.75 to CHF289.25
Credit Suisse downgrades to neutral from outperform and cuts target price to CHF300 from CHF500. On the back of an ongoing difficult market environment for commercial print advertising in 2007 & Co.'s ongoing restructuring, the broker believes Co. is unlikely to surprise positively market expectations when it reports on March 19.