European Movers: HBOS, BNP Paribas, Munich Re
HBOS Down GBP0.49 to GBP1.84... Broker cuts numbers on funding fears Citigroup cuts target to GBP2.0 from GBP2.50, keeps sell. Says de-leveraging is likely to be difficult to achieve, as credit lines are drawn-down by distressed borrowers and refinancing activity declines, and damaging to profitability as revenue slows and impairments rise. In specific cases, such as Co., broker believes funding fears could spread to shorter maturities increasing the potential liquidity risk for the bank.
BARCLAYS Down GBP0.08 to GBP3.08... Confirms talks with Lehman - Co. confirms it is discussing with Lehman Brothers the possible acquisition of certain assets on terms that would be attractive to its shareholders. A further announcement will be made in due course. The WSJ says Lehman continues to seek buyers for some assets, including its US broker-dealer business and investment management arm. The paper adds Co. remains interested in Lehman's US broker-dealer unit, the core of the firm.
DEBENHAMS Down GBP0.01 to GBP0.42... Seymour Pierce cuts to sell from hold, with a target price of GBP0.35. Co. says FY LFL sales fell 0.9%; gross transaction value rose 1.3%; market share gains were achieved in all major product categories; gross margin was flat, in line with guidance given during the year. Expects PTP and net debt position at year end to be in line with market consensus. Enters the new financial year with a very clean stock position. Notes trading in August showed a marked improvement over July but the UK retail sector continues to be adversely affected by wider economic concerns.
MICHAEL PAGE Down GBP0.79 to GBP2.43... ING downgrades to sell from hold and cuts target price to GBP2.50 from GBP3.50. Seymour Pierce lowers to hold from buy, target price GBP3.20. Co. says Adecco's proposals materially undervalued the group and its excellent prospects. Adds its interests are better served by remaining independent. This follows Adecco's announcement that it will not make an offer.
FRANCE TELECOM Up EUR 0.81 to EUR 20.03... Turns its attention to Africa - FT - Co. is turning its attention back to Africa, with a new focus on making acquisitions in Anglophone countries, chief executive Didier Lombard told the FT. CEO added that FCF generated in 2008 would probably be a little bit better than the EUR 7.8bn Co. had forecast. Also hinted that Co. could raise the ratio of FCF it returns to investors above its target of 45%.
BNP-PARIBAS Down EUR 1.83 to EUR 58.09... Has 'manageable' exposure to Lehman - Co. said it has 'manageable' exposure to Lehman. Co. made a bank loan of US$250m to Lehman, according to Lehman's bankruptcy filing. French banks may see 'limited' repercussions from the bankruptcy of Lehman Brothers, the French finance ministry said.
LAFARGE Up EUR 0.83 to EUR 81.43... Sources deny potential merger with Holcim rumor - Various market sources say the vague rumor that Co. and Swiss Holcim may merge is very unlikely. Co. says it does not comment market rumors. In further news, traders say that yesterday's rumors that a foreign investor may be building a stake in Holcim boost the sector.
MUNICH RE Down EUR 3.63 to EUR 95.77... Says Lehman exposure EUR 350m and exposure to AIG 'not significant'. Adds that its buyback program is unaffected by recent market developments.
BAYER Up EUR 0.37 to EUR 56.31... Pfizer talk back / Direvo buy / Xarelto OK in Canada - There is renewed speculation that Pfizer has Co. in its sights. A bid of EUR 65 to EUR 67 per share is thought to be on the table. In other news pertaining to Co., it is acquiring Germany's Direvo Biotech, a deal valued at EUR 210m. Also, Co.'s Xarelto gets approval in Canada. Marketing of the anticoagulant in the country will start immediately. Co. expects marketing authorization for Xarelto across all EU member states 'very soon'.
DEUTSCHE BANK Down EUR 2.48 to EUR 51.74... Banking stock to avoid - JP Morgan - Co.
is among those European banking stocks best avoided because it may be a counterparty to bankrupt Lehman Brothers, says JP Morgan.
FIAT Up EUR 0.20 to EUR 10.75... Iveco interested in Santana - Automotive News Europe reports that Co.'s truck unit, Iveco, is interested in acquiring Spain's Santana. Business Standard reports that Co. eyes an investment in Romania. Meanwhile, Co. has unveiled an 11.7% decrease in August new car registrations to 55,844, helped by a solid result at the core Fiat brand.
UNIPOL Down EUR 0.02 to EUR 1.61... EUR 250m exposure to Lehman corporate bonds - Co. has said that its overall gross exposure to Lehman corporate bonds is EUR 250m (around 1% of total investments). Added there is no exposure towards Lehman equity stocks.
FORTIS Down EUR 0.91 to EUR 7.43... Needs more time to sell Polish unit - Bloomberg cites a filing with local regulators that says that Co. needs more time to sell a stake in its Polish unit Fortis Bank Polska SA. Co. seeks to decrease its stake by the end of June 2010 rather than in March 2009. Co. has announced that its direct exposure to Lehman Brothers, which yesterday filed for Chapter 11, is EUR 137m in bonds (EUR 5m of those secure) and EUR 7m in credit default swaps. Co.'s indirect exposure (through insurance etc.) is EUR 117m.
TNT Down EUR 0.55 to EUR 23.54... Bid rumors do the rounds once more - Traders note that rumors once again do the rounds of Co. possibly being a bid target. UPS has repeatedly been cited as a potential suitor.
HUSQVARNA Down SEK3.55 to SEK49.70... Lowers sales and earnings forecast for 3Q - Co. says 3Q operating income will be substantially lower than in the previous year, with the decline referring primarily to consumer products for the mass market channels in North America and Europe, as well as to products for the construction industry within Professional products. Co. now expects 3Q operating income to amount to c.SEK300m (SEK553m). Co. adds that cost-cutting measures will be implemented, involving a total reduction of c.850 employees, which will generate annual savings of c.SEK300m. Co. will also lower its capacity. The cost of these measures is estimated at c.SEK300m.
SEADRILL Down NOK1.75 to NOK123.00... US$1.7bn sale and leaseback deal - Co, and Ship Finance International have agreed a combined sale and leaseback arrangement whereby Co. will sell the ultra-deepwater semi-submersible rigs West Hercules and West Taurus for US$1.7band, and at the same time lease the units for a 15-year period. The up front cash contribution from the sale adjusted for remaining newbuild installments is estimated to US$1bn at delivery of the two semi-submersible rigs.
FCC Up EUR 0.61 to EUR 31.74... Shares up on short-covering, stake sale talk - Colonial may have sold stake at above market prices, Reuters reports citing traders. However, Colonial denies the report. Traders pour cold water on the rumor, attributing Co.'s share price gains to short-covering.
SANTANDER Up EUR 0.02 to EUR 10.58... EU approves A&L deal / Exposure to Lehman - Has EUR 11m of direct exposure to Lehman Brothers and as of 12 September it had further exposure of up to EUR 44.6m through derivative operations, Co. said late on Monday. The EU approves Co.'s purchase of Alliance & Leicester.
ADECCO Up CHF0.62 to CHF49.92... No offer for Michael Page at this stage - Co. says, noting that a response from the UK staffer has indicated that a recommended transaction would not be achievable on terms it considers satisfactory.
HOLCIM Up CHF2.70 to CHF87.00... Lafarge merger talk seems far-fetched - Various market sources say the vague rumor that France's Lafarge and Co. may merge is very unlikely (due to antitrust concerns) but note that it is not impossible. Lafarge says it does not comment on market rumors, while Co. is not available to comment. Yesterday, there were rumors that a foreign investor may be building a stake in Co.