European Movers: LVMH, Escada, Nestle
DSG INTERNATIONAL Down GBP0.05 to GBP0.61... Warns on profit, brokers cut tgt, ests - Co. says sales for 25 wks to 5 April up 6%, LFL fell 1%. Notes trading is challenging, particularly UK, Italy and Spain. Adds sales are in line, but increased promotions have squeezed LFL gross margins to 0.8%. Expects FY u/l PTP GBP200m-GBP210m. First phase of review on 15 May. Dresdner cuts target to GBP0.48 from GBP0.55, sell. Cuts FY09 EPS by 13% to 6.0p. Assumes DPS is halved. Panmure cuts target to GBP0.65 from GBP0.70, retains hold. Cuts current year forecast by 20% and assumes FY DPS of 4p on the back of today's profit warning.
BRITISH ENERGY Up GBP0.37 to GBP7.39... Rumour Centrica could bid GBP8/sh - Traders note speculation that Centrica could offer GBP8/sh. A spokesperson for Centrica offered a 'no comment' when asked about the matter. A trader says that the sector will see a competing bid for Co. Points out that today's reports of RWE put a floor on the share price and expects a final takeover price between GBP9/sh and GBP9.50/sh. German utility group RWE has made all-cash offer of close to GBP7.00 per share in a deal that could value Co. at up to GBP11bn, reports the FT. Co. says nuclear output for year ended 31 March was 50.3TWh, marginally ahead of current market expectations.
HAYS Up GBP0.02 to GBP1.09... 3Q LFL up 17%, UK slower but good - Co. reports a 17% organic growth in group net fees and strong performances in both temporary and permanent placement businesses. Says UK & Ireland LFL was 5%; Asia Pacific +40%; Continental Europe & ROW +38%. Ests Easter falling earlier this year reduced growth by approximately 2% in the quarter. Says in Asia Pacific and Continental Europe, growth in demand continues to be strong, whereas growth in the UK & Ireland has slowed compared to 1H but continues to be good. Remains confident in its outlook for the year, whilst mindful of the current economic uncertainty.
ENODIS Up GBP0.78 to GBP2.30... Receives indicative offer at GBP2.60 - Co. confirms it has received an indicative cash proposal from The Manitowoc Company at GBP2.60 per share. Explains this is inclusive of the right to a 2p per share in lieu of the 2008 interim dividend. Co. has granted Manitowoc due diligence access and will update the market in due course as appropriate.
LVMH Down EUR 1.49 to EUR 68.16... Exane BNP Paribas lowers target to EUR 87 from EUR 93. Exane has cut its estimates by an average 10% (and target prices by 20%) since December to factor in fx changes and the deteriorating economic environment in the USA and Japan and the greater volatility in Europe. Keeps outperform on Co. and PPR. Says their risk/reward profiles are attractive from a historical perspective vs watch and ready-to-wear players, which are far from having integrated a potential trough scenario.
EADS Up EUR 0.14 to EUR 15.33... Mulls sale of Socata division and is already in talks with several parties over the aviation manufacturing business, according to La Tribune.
AREVA Up EUR 3.08 to EUR 708.00... Wins contracts in Japan worth a total of EUR 2bn - Co. finalised several major contracts with Japanese utilities. Worth a total of EUR 2bn, the contracts cover services in the front end of the nuclear fuel cycle such as uranium supplies, conversion and enrichment.
RWE Down EUR 2.30 to EUR 78.70... British Energy suitors come to the fore - Co. has made an all-cash offer of close to GBP7.00 per share, valuing the UK nuclear operator at about GBP11bn, according to the FT. Co. has declined to comment on the matter. Sal Oppenheim says, all in all, it would welcome an acquisition of British Energy by Co. due to the strong industrial rationale. Believes this should even overcompensate a potential over-payment. Broker reaffirms its buy rating for Co. Meanwhile, UK's Centrica is understood to be offering GBP8.00 per share for British Energy.
ESCADA Down EUR 3.20 to EUR 11.15... Warns on earnings / Broker comment - Co. expects a 25% slide in 2007/08 EBITDA.
Deutsche cuts target to EUR 14 from EUR 20, reiterating hold.
BULGARI Down EUR 0.19 to EUR 6.93... Exane downgrades to underperform from neutral as Co.'s guidance seems too optimistic. Cuts target to EUR 8 from EUR 10 and lowers estimates by an average 10% to factor in forex changes and the deteriorating economic environment in the US and Japan and the greater volatility in Europe. Says that despite unfavourable earnings momentum, the sector looks attractive. While expects earnings momentum to remain negative, maintains outperform rating on the sector.
PARMALAT Down EUR 0.03 to EUR 2.50... To call EGM to discuss hike in dividend payout - Co.'s board will call a special shareholders' meeting to discuss a request by some investors that it boost its dividend payout. Also, as expected Enrico Bondi was re-elected as CEO while Raffaele Picella was kept as chairman. Separately, Co. is eyeing deals in Australia, CEO Enrico Bondi reportedly said, without getting into specifics.
FINMECCANICA Down EUR 0.01 to EUR 21.50... In talks with Severstal over j/v - CEO Pier Francesco Guarguaglini, has told in interview with Bloomberg, that Co. is in talks with Russia's Severstal to set up a j/v to build power plants. The MF writes that Severstal could be also interested in having a 30-40% stake in Co.'s unit Ansaldo Energia. Confirms 2008-10 earnings forecasts despite an expected negative impact on revenues at its Alenia Aeronautica unit from Boeing's delay on its 787 Dreamliner, reportedly.
HEINEKEN Down EUR 0.15 to EUR 38.25... Announces intention to buy Eichhof unit - Co. has announced its intention to buy Eichhof Holding's beverage division in Switzerland for EUR 176m.
ROYAL DUTCH SHELL (NL) Up EUR 0.10 to EUR 23.32... Warns on investment in Europe / Oil near US$111 - Co. will stop investing in Europe if utilities are made to pay for emissions permits, which are currently granted free, The Times writes, with Co. arguing that should emission quotas be auctioned, it will be too expensive. Oil near US$111 a barrel after a sharp fall in US crude and fuel stocks.
YARA Up NOK12.00 to NOK337.00... Chinese export taxes up 100-135% - Chinese export taxes are set to increase 100-135% from 20 April, removing the largest exporter of urea in Asia, Profercy reports. Urea prices are expected to go through the roof. An official announcement is expected at the end of the week.
IBERDROLA RENOVABLES Up EUR 0.11 to EUR 4.30... Production figures in line - broker - Co. says its electricity production rose 79.7% y/y in 1Q to 4.898 GWh. Installed capacity rose 79.3%. Caja Madrid comments that production is in line with estimates, while new installations are also in line, with broker expecting 1,909 MW for the whole year.
COLONIAL Down EUR 0.04 to EUR 0.90... Portillo cuts stake / Debt negotiations - Co. says its creditor banks may allow it renegotiate the conditions of a long term EUR 1.55bn debt packet linked to the acquisition of a stake in FCC. The drop in FCC's share price has triggered a clause allowing banks to recall that EUR 1.55bn debt in the short term, but Co. says it has received a temporary waiver and hopes to reclassify the debt as long term. CNMV records show former chairman Luis Portillo holds 29.9% vs 34.1% previously.
EICHHOF Up CHF216.00 to CHF2216.00... Shares jump as Heineken to buy unit - Heineken has announced its intention to buy Co.'s beverage division in Switzerland for EUR 176m. Following the spin-off of Beverages, together with the planned disposal of the Real Estate portfolio, color measurement specialist Datacolor will be positioned as an independent company on the SWX Swiss Stock Exchange.
NESTLE Down CHF3.50 to CHF506.00... Holds AGM today in Lausanne and will see Paul Bulcke start his new job as CEO as of today.