Thursday, April 26, 0730 BST
Pushing the envelope
Britain faces its first national postal strike for more than a decade in a
dispute over pay and cost cuts that would halve collections, The Times
reports.
More on Royal Mail here
The Communication Workers Union (CWU) has said it will ballot for industrial
action after Royal Mail proposed a pay freeze for this year.
The postal group is also planning £350 million in cost cuts, which will
include reducing by half the number of collections from post boxes. In busy
city locations they will fall from an average of four a day to two and, in
other areas to one.
The CWU says that in the absence of a change in Royal Mail’s stance, a major
dispute is inevitable.
ABN Amro: Act II
The Dutch bank has agreed to open its books to a consortium of European banks
that on Wednesday proposed a €72 billion (£49 billion) break-up bid,
according to the Financial Times. The offer, comprising 70 per cent
cash, trounced an all-share €66 billion offer from Barclays agreed just 48
hours before.
More on ABN Amro here
The consortium, led by Royal Bank of Scotland, is also understood to have
found a way to halt the sale of ABN Amro’s US subsidiary to Bank of America
for $21 billion (£10.5 billion). It would make a higher offer for LaSalle,
which would be conditional on its bid for the whole bank being a success.
The Telegraph comments that Barclays is now reeling, with a bid that is
materially lower than the one RBS has proposed and all in shares. No analyst
believes that Barclays will be able to return with an offer high enough to
knock out RBS, it says.
More commentary here
History, too, may favour Sir Fred Goodwin, chief executive of RBS. His £23.6
billion acquisition of National Westminster Bank in 2000 broke up an agreed
deal with Bank of Scotland, its tartan rival.
Sainsbury’s
A fresh front opens up in the battle for British aisles. The Times
reports that the board of J Sainsbury is likely to come under increasing
pressure to break up the company after a dawn raider grabbed 14 per cent of
the supermarket group.
More on Sainsbury’s here
Shares in the superstore operator rose 7 per cent after an investor - believed
to be Three Delta, the Qatari-backed property fund - spent £1.3 billion
acquiring at least 250 million shares at 575p each.
The newspaper says that the chain’s board is expected now to face growing
calls to realise the value of its property assets. Three Delta, an
investment group run by Paul Taylor, the former chief executive of Robert
Tchenguiz’s Rotch property group, is likely to back Mr Tchenguiz’s campaign
for the sale of all or some of its stores.
The BBC comments that Three Delta has indicated to Sainsbury’s that it is a
supportive long-term holder - perhaps it could buy Mr Tchenguiz’s stake and
bring a little more cohesion to the ownership of the company.
More commentary here
Up, up and away
Far from being the cruelest month, April has been the best month since
December 2003 for US stock market investors. The icing was poured on to the
cake on Wednesday when the benchmark Dow Jones industrial average closed
above 13,000 for the first time.
More on the Dow here
The milestone was passed just six months after the Dow breached 12,000. Since
then the markets have been led higher by Honeywell and Alcoa, both of which
have recorded gains of more than 20 per cent, and a buoyant first-quarter
earnings season.
Alcoa was among the standout performers on Wednesday, up 5.2 per cent after
the biggest aluminum company said that it may sell three divisions.
Amazon.com rose 27 per cent after the online retailer reported
stronger-than-expected profits. The Dow increased 1.05 per cent to
13,089.89, the S&P 500 advanced 1.01 per cent to 1,495.42 and the
technology-laden Nasdaq gained 0.92 per cent to 2,547.89.
Where next? The New York Times says that the pundits are divided
between the sceptics, who think that problems in the housing sector will
trip up investors, and the optimists, who say that the relative value of
shares signals that the market still has room to run.
Apple
Even Steve Jobs might have cracked a smile as booming sales of Macintosh
computers and iPods powered an 88 per cent increase in profits and a 21 per
cent rise in revenues in the first quarter.
More on Apple here
The Wall Street Journal reports that shares in the company soared more
than 6 per cent after Apple said that it had shipped 1.5 million computers
(up 36 per cent) and more than 10.5 million music players (up 24 per cent)
during the quarter.
And the eagerly awaited iPhone – the mobile phone cum iPod – is yet to come.
Steve Jobs, chief executive, described the quarter as a “blowout”. The board
backed him on Wednesday over the other blowout at Apple on stock options
backdating. America’s chief market watchdog filed civil charges this week
against the company’s former chief financial officer and a former general
counsel.
Siemens
Who’s in charge? Europe’s biggest engineering group was deeper into turmoil on
Wednesday after Klaus Kleinfeld said that he would resign as chief executive
before the end of the summer, says the Financial Times. The
announcement follows the resignation of Neinrich von Pierer as chairman amid
Germany’s biggest corporate corruption scandal.
More on Siemens here
Mr Kleinfeld said that he was unwilling to tolerate further uncertainty about
his and the company's future after divisions among Siemens board members
about whether to renew his contract became public in the past few days. A
successor has not yet been chosen.
The irony is that neither Mr von Pierer nor Mr Kleinfeld has been personally
implicated in four separate suspected bribery investigations of current and
former Siemens staff.
Ben Uglow, an analyst at Morgan Stanley, said: “The fact is that [Mr]
Kleinfeld has done nothing wrong; he has tripled the share price, doubled
operating margins and he is leaving for an unspecified reason.”
Sony
The mood is brighter in the Far East, where Sony plans to take its finance
division public in a 1 trillion yen (£4.2 billion) IPO that is likely to be
Japan’s biggest this year, according to the Nikkei Financial
Daily.
More here
Proceeds from the sale of at least a third of Sony Financial Holdings in the
autumn are expected to reach Y300 billion. It has not been decided whether
new shares in the banking and insurance operation will be issued.
In the last quarter of 2006, Sony's financial operations contributed 7 per
cent of operating revenue and 29 per cent of operating profit to its parent.
Sony intends to use proceeds from the share sale to develop new flat-panel
televisions, camcorders and other products.
MARKETS
FTSE 100 (Wednesday close): up 32.40, or 0.5%, at 6,461.90
Dow (close): up 135.95, or 1%, at 13,089.89
Nasdaq (close): up 23.35, or 0.9%, at 2,547.89
S&P 500 (close): up 15.01, or 1%, at 1,495.42
Nikkei (latest): up 129.48, or 0.8%, at 17,365.64
Hang Seng (latest): up 120.10, or 0.6%, at 20,656.88
Sterling (latest): $2.0033
Oil (latest): West Texas crude up 3 cents at $65.87
Gold (latest): down $1.80 at $688.80
ASIA
Shares rose across the region by the most in a week as higher crude oil and
metals prices gave a lift to commodity producers and companies reported
improved profits.
Baoshan Iron & Steel, China's leading producer of the alloy, led
steelmakers higher after announcing that its profits had more than doubled,
while Honda was set for its biggest jump in three weeks after
reporting earnings that beat analysts’ estimates. BHP Billiton,
the biggest mining company, advanced for a fourth day.
The Morgan Stanley Capital International Asia-Pacific Index was up 0.6 per
cent to 147.68. In Japan, the Nikkei index had risen 0.8 per cent at
17,365.64 while, in Hong Kong, the Hang Seng was up 0.6 per cent at
20,656.88 in intraday trading.
Paul Larter
paul.larter@thetimes.co.uk
LONDON
The FTSE 100 index pushed forward for the first day in three on news that a
Qatar fund had picked up 15 per cent of J Sainsbury - putting the
supermarket's management under increasing pressure to release value from its
property portfolio. Similar arguments helped lift Punch Taverns,
which climbed after analysts at Numis Securities said the pubs group's
managed estate had around £1 billion of hidden value.
A plethora of bid stories were doing the rounds, most notably Cable &
Wireless, which rose on spurious talk of interest from Deutsche Telekom. Tate
& Lyle, Ladbrokes and Invensys were all up on renewed
theories of private equity interest, although there was little in the way of
supporting evidence.
BROKERS
Goldman Sachs raised Premier Foods to "buy" from "neutral"
with an 18-month share price target of 365p, against a closing price of
306.5p yesterday. It said that "stock digestion" following its
deal to buy RHM has left the shares at 12 times 2008 earnings, one of the
sector's lowest multiples, and offering the highest dividend yield at 4.7
per cent. Yet Goldman viewed Premier as an integration specialist with a
long track record of squeezing costs out of acquisitions. It told clients: "While
there remains some risk of modest forecast adjustments to RHM estimates, we
believe that this is more than discounted in the stock price. Furthermore,
delivery of cost savings over the next 18 months should drive considerable
share price appreciation in our view." The broker added Premier to its "conviction
buy" list ahead of the group's AGM on May 10 and trading update on July
6, where it expects the company to allay fears of a sharp deterioration in
trading at the RHM business.
Dresdner Kleinwort downgraded Aggreko to "add" from "buy"
after the temporary generator hire firm said yesterday its earnings would be
materially ahead of expectations. "Although we believe that the
long-term growth drivers for Aggreko are compelling, we do not believe that
the current utilisation levels within the international businesses are
sustainable," it told clients. The broker therefore put smaller
upgrades for 2008 and 2009 earnings into its spreadsheet than the hikes
suggested by yesterday's trading update, and came out with a target price of
590p. Aggreko shares were at 559p yesterday.
Bryce Elder
bryce.elder@thetimes.co.uk
AGENDA
INTERIMS
AMVESCAP
ARM HLDGS
ASTRAZENECA
RECKITT BENCKISER
AQUARIUS PLATINUM
SMITHS NEWS
FINAL
JOHN DAVID
ClinPhone
COURSIE GROUP
EVRAZ GROUP
PUBLIC SERVICE PROPERTIES
STYLO
WORLD TELEVISION
AGMs
ASTRAZENECA
AVIVA
BAILLIE GIFFORD SHIN NIPPON
ARK THERAPEUTICS
BARCLAYS
BBA AVIATION
BRITISH AMERICAN TOBACCO
COLT TELECOM S.A.
COMMUNISIS
CRODA INTERNATIONAL
DRAX
ELEMENTIS
GEORGE WIMPEY
HUVEAUX
MANAGEMENT CONSULTING GROUP
MEGGITT
MURRAY INTL TRST
REUTERS
SCOTTISH AND NEWCASTLE
121MEDIA
ALTIN
DOMINO’S PIZZA UK & IRL
ISLAMIC BANK OF BRITAIN
SR PHARMA
ULTRA ELECTRONICS HOLDINGS
EGMs
COLT TELECOM S.A.
DMATEK LTD
HAW PAR CORP
TRADING STATEMENT
HORNBY
SYNERGY HEALTHCARE
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