Tufton Assets Share Discussion Threads

[ariane] 23/5/2004 18:05

FRANKFURT (AFX) - Siemens AG expects EU Competition Commissioner Mario Monti
and French Finance Minister Nicolas Sarkozy to make public their decision
regarding the 3.2 bln eur rescue package for Alstom this week, but the German
electronics and engineering company does not think it will be able to acquire
any of its rival's units, Welt am Sonntag newspaper reported, citing unnamed
sources within Siemens.
Siemens believes that Alstom will not be forced to sell either its
transportation or power generation units. Instead, Siemens may be able to form
partnerships with these divisions in two years' time according to the terms
of the EU decision, Welt am Sonntag reported.
If the EU decision does not include any clause about Alstom's need to form
partnerships with rivals, Siemens may consider taking legal action, Die Welt
reported.
amk/bam

[maywillow] 21/5/2004 11:01

PARIS (AFX) - Siemens AG has made a firm offer to Alstom SA that would avoid
the troubled engineering group being dismantled, French daily La Tribune
reported, without citing sources.
In doing so, Siemens wants to prevent Alstom from using time after its
planned recapitalisation to gain market share, the report said.
The report said Siemens is opposed to the European Commission making a deal
with Alstom under which the company would agree to form a partnership with
another company once its financial situation has improved in two years time.
La Tribune said Siemens is interested in the whole of Alstom's business,
which would give the German conglomerate greater market share and also growth
potential in servicing activities.
Such a move would allow Siemens to create a European player able to compete
with General Electric Co, the report said.
[e-mail]
sr/jms

[maywillow] 20/5/2004 12:37

LONDON, May 20 (New Ratings) — Analysts at JP Morgan issue an “underweight” rating on Alstom (AOM.FSE).

In a research note published this morning, the analysts mention that Alstom is likely to report its FY04 results broadly in-line with expectations. JP Morgan expects the company to post FY04 cash outflow from operations and net debts of €1.4 billion and €3.1 billion, respectively.

[waldron] 20/5/2004 05:33

Siemens keeps its own counsel
By Daniel Dombey in Brussels and Peter Marsh in London
Published: May 20 2004 5:00 | Last Updated: May 20 2004 5:00

Ministers and officials in Paris, Berlin and Brussels have all been exercising their minds about a possible alliance between Alstom and Siemens of late.


But while meetings have been held and cancelled in recent weeks, the diversified German engineering group has been thinking some thoughts of its own.

From his headquarters in Paris, Nicolas Sarkozy wants to ensure an all-French solution to Alstom's problems - and believes the deal he has struck with Mario Monti has done just that.

Mr Monti, however, believes that Alstom's long-term viability will not be assured by the French government's injection of €800m ($960m) in return for a 31.5 per cent stake.

The competition Commissioner thinks he will get his revenge by forbidding Paris from propping up Alstom any further - even if it is through Areva, the state-owned energy group.

He wants to set a schedule for the group's organisation into more distinct units, in preparation for alliances with other companies - in which typically, those other groups would exercise at least equal control.

Such sales and spin-offs would be in addition to the divestments for some €1.6bn that Paris has agreed as an immediate condition of its outline agreement with Mr Monti.

But sceptics will be quick to note that anything can happen in Brussels' three to five-year time-scale - and that Paris has yet to sign anything at all.

In addition, Siemens' thoughts may not be to the liking of any of the governments involved - even Berlin, which has not disguised its desire to see new pan-European champions.

For while the company thinks its operations across the board have been disadvantaged by the subsidies Alstom has received, it is far from interested in acquiring everything that Alstom might offer.

Heinrich von Pierer, Siemens chief executive, is thought to be particularly keen on taking over Alstom assets that would give access to its business in servicing and refurbishing existing power stations, rather than the turbine-building operation.

This is a business estimated to be worth about 40 per cent of the €10.9bn sales of Alstom's power generation business in 2002/03.

This looks attractive to Siemens because, out of a world market for power generation installations and services of some €160bn a year, the service component accounted for about €70bn last year, according to industry estimates.

It is all the more so because Alstom or its precursors have been responsible for building 28 per cent of total world power station installed capacity of 3,683GW, according Alstom figures.

That puts the French group ahead of both Siemens, with 17 per cent, and General Electric, with 23 per cent.

By contrast, it is highly likely Siemens would want to shut down much of Alstom's manufacturing of parts, such as turbines, generators and boilers, which would lead to large job losses.

Alstom's power generation operations employ 45,000 people world-wide, more than two-thirds of them in Europe.

source:ft.com

[waldron] 19/5/2004 09:57

FRANKFURT (AFX) - The French government's rescue plan for Alstom should
include the condition that within two years it must form a cooperation agreement
with an unspecified "strong industrial partner", EU competition commissioner
Mario Monti has insisted, Handelsblatt reported citing unspecified industry
sources.
This means that Siemens could still make a bid for the troubled French
engineering giant, the report said.
Negotiations over Siemens and Alstom will be the subject of a summit meeting
in Berlin between representatives of the French and German government, which
will take place during the first weekend of June, it said.
amk/jkm/

[waldron] 19/5/2004 09:08

FRANKFURT (AFX) - Siemens AG's lawyers are examining the possibility of
making a legal claim against the French government's subsidies to troubled
engineering giant Alstom, Handelsblatt reported on its Website, citing a company
source at a meeting in Shanghai.
"The board of directors is united on this issue," the source told
Handelsblatt. "In a worst case scenario, we will sue."
EU competition commissioner Mario Monti and French Finance Minister Nicolas
Sarkozy have agreed upon a rescue package for Alstom, Handelsblatt reported. If
the European Commission approves this package, Siemens will consider legal
action, the newspaper said.
A Siemens spokesman in Munich declined to comment.
zb/she/amk/jfr

[waldron] 19/5/2004 06:02

VT floats bid idea for shipyards
By Mark Odell
Published: May 19 2004 5:00 | Last Updated: May 19 2004 5:00

VT Group yesterday signalled it would consider bidding for the two shipyards in Scotland, which BAE Systems has indicated could be sold if it decides to dispose of its naval business.


Paul Lester, chief executive of the shipbuilding and support services group, confirmed that he was interested in buying the surface ship business and the two yards on the Clyde in Glasgow, but ruled out a bid for the submarine business at Barrow in Cumbria.

He said he was expecting a memorandum of information in the "next few weeks" from BAE, which has also held initial talks with Thales, the French defence contractor, and General Dynamics of the US.

But BAE denied it was at the stage of issuing a memorandum of information. "We are still reviewing our options, which include retention of the business, and haven't got to that point yet," it said.

The former Vosper Thornycroft has grown rapidly its support services business in defence, education and vocational training in recent years. Its shipbuilding business now accounts for only 20 per cent of operating profit.

The expression of interest came as VT Group reported a sharp jump in pre-tax profit for the year to the end of March from £11.6m to £26.3m. Underlying profit before exceptionals and amortisation charges rose 11 per cent to £46.2m, ahead of consensus forecasts. Group turnover, including the share of joint ventures, rose by almost a fifth to £671m.

Shipbuilding is expected to bounce back strongly in the next few years as production ramps up on big UK programmes. The group said it was confident that it could continue delivering growth and raised the final dividend from 8.4p to 9p. It also announced that Admiral Michael Boyce, the former chief of the defence staff, would join its board in late July replacing Sir Jock Slater, the former head of the Royal Navy, as one of six non-executive directors.

FT Comment

* The shares have had a good run in recent months as investors recognised VT's switch into support services. But the acquisition of BAE's shipbuilding assets would have a large impact on the balance of the group and investors would be well advised to see what the group plans to do with them. Analysts are looking for pre-tax profit of £50m this year, giving earnings per share of 20p. This puts VT on a forward p/e multiple of just under 13, which seems about right.

[ariane] 18/5/2004 15:48

PARIS (AFX) - Finance Minister Nicolas Sarkozy said the French state will
transform the debt owed it by Alstom into shares in the company, as part of a
new financial aid package that is currently being negotiated with the EU
Commission.
The French state made several loans to Alstom in September, including a 900
mln eur bridging loan, as part of a 3.5 bln eur rescue package, but these funds
are expected to be exhausted within the coming months.
Speaking to the National Assembly, Sarkozy also said that as part of the new
aid package, Alstom's creditor banks will be asked to transform some of their
debt into Alstom shares.
"The banks still need to be convinced, so that they will accept their
responsibilities," Sarkozy said. "You can count on the determination of the
government to convince them."
The new aid package will not require the closure of any Alstom production
sites in France, and will not lead to a break up of the company, Sarkozy added.
"The government is convinced that Alstom is a viable enterprise, because its
main markets are in energy and transportation," Sarkozy said.
"Alstom has had financial difficulties because it was under-capitalised and
there were management errors that are not the fault of its employees, and there
is no reason why the women and men of Alstom should pay for errors that they did
not make," he said.
[e-mail]
js/cml

[ariane] 18/5/2004 12:16

BRUSSELS (AFX) - The European Commission said it is close to a deal with the
French government on a state-sponsored rescue plan for stricken engineering
group Alstom SA.
"We are close to it (a deal), but there is nothing yet," commission
competition spokesman Tilman Lueder said.
vm/rhb

[ariane] 18/5/2004 07:45

PARIS (AFX) - The French government and the European Commission yesterday
agreed a 2.0-2.5 bln eur recapitalisation plan to rescue troubled engineering
group Alstom SA, according to a report in French daily La Tribune, citing
sources close to the matter.
Yesterday EU competition commissioner Mario Monti said there is "the basis
for an agreement this week" on the French government's planned bailout package
for Alstom.
The report said there are no plans for a tie-up between Alstom and French
nuclear group Areva or Germany's Siemens AG.
In September Alstom said the French government would contribute 800 mln eur,
of which 300 mln was to be converted into shares subject to EC approval.
But Monti agreed yesterday that all of the 800 mln eur will be converted
into shares, La Tribune said earlier. The French government's stake in Alstom
will rise to 40 pct from 18-20 pct agreed in the initial plan, it added.
The report said the new plan also includes a capital increase of around 1
bln eur.
Alstom's 3.5 bln eur financing facility agreed in September may be increased
to 7.5-8.5 bln eur, La Tribune added.
In September Alstom said a syndicate of banks is providing a contract bonds
and guarantees facility of 3.5 bln eur, counter-guaranteed in part (65 pct) by
the French state, which will allow Alstom to cover its normal level of business
activity.
[e-mail]
sr/lam

[ariane] 18/5/2004 07:00

FRANKFURT (AFX) - ThyssenKrupp AG's purchase of the Howaldtswerke-Deutsche
Werft (HDW) shipyard will generate an estimated 1,000 job losses among the
operations' combined 9,300-strong workforce, daily Die Welt quoted unnamed
sources as saying.
The newspaper quoted the head of HDW's works council, Ernst-August Kiel, as
saying the deal, which was announced yesterday, will lead to an unspecified
number of job losses.
jms/lam

[ariane] 18/5/2004 05:58

Paris and Brussels reach Alstom deal
By Daniel Dombey in Brussels, Richard Milne in Paris and Bettina,Wassener in Frankfurt
Published: May 18 2004 5:00 | Last Updated: May 18 2004 5:00

Nicolas Sarkozy, France's finance minister, and Mario Monti, EU competition commissioner, yesterday revealed they had come to an outline deal over Alstom, the stricken French engineering giant, so ending a Paris-Brussels dispute.


The battle has pitted the European Commission, which regulates national subsidies in the EU, against the French government, which has been intent on preventing Alstom from being broken up.

People close to the case said Alstom would remain a stand-alone group and would not be forced into an alliance with Siemens, its German rival, or Areva, France's state-controlled nuclear energy group.

Alstom could have to carry out significant divestments to compensate for state aid that Brussels has estimated at more than €3bn ($3.6bn) - but the company would not have to sell off its show-piece high-speed trains or gas turbines businesses.

Mr Monti and Mr Sarkozy declined to give any details of their deal.

"We have the basis of an agreement and this should be finalised by the end of the week," Mr Monti said. Formal Commission authorisation of the French measures may take several further weeks.

"Alstom will not be dismantled. There will be disposals, but we will keep the basic structure of Alstom," a French finance ministry official said. The official indicated it would be an all-French solution "leaving a viable company".

Alstom declined to comment yesterday. But a person close to the group said the outline plan would allow all senior managers including Patrick Kron, chief executive, to remain.

However, large-scale divestments would also allow Mr Monti to claim he had protected the integrity of Brussels's policy of controlling government subsidies.

The Alstom case has been particularly sensitive, since Mr Monti was infuriated when Paris announced a bail-out plan last year without consulting him, even though it involved taking a government stake in the group.

However, Mr Monti's brief has been complicated by his twin duties of cracking down on state aids and policing companies' mergers.

Last year, a Commission report concluded that a sale of either one of Alstom's main businesses to Siemens, the most likely purchaser, could create antitrust problems.

However, Siemens has been concerned that the Commission has not paid sufficient attention to its own complaint that it has been hit hard by the subsidies to Alstom.

The company has suggested that a Commission green light for an Alstom bail-out could lead it to take legal action.

[ariane] 17/5/2004 18:19

PARIS (AFX) - Alstom SA's creditor banks are likely to approve the rescue
plan discussed today between the European Commission and the French finance
ministry, to save the troubled engineering group, a banking source said.
[e-mail]
fol/sr/jlw

[ariane] 17/5/2004 14:38

PARIS (AFX) - The rescue plan for troubled engineering company Alstom SA
discussed between the European Commission and the French finance ministry
involves "targeted disposals" and will not break up the company, an EU source
close to the matter said.
The plan will not close down the company's Belfort site, the source added.
Earlier EU competition commissioner Mario Monti said there is "the basis for
an agreement this week" on the French government's planned bailout package for
the company.
[e-mail]
od/sr/jlw

[ariane] 17/5/2004 14:00

(Updates with quotes from Sarkozy)

BRUSSELS (AFX) - EU competition commissioner Mario Monti said there is "the
basis for an agreement this week" on the French government's planned bailout
package for Alstom.
"We are very close to an accord on the undertakings of the French government
regarding Alstom, which should be finalised by the end of this week," Monti said
after meeting with French finance minister Nicolas Sarkozy.
Such an agreement "would enable me to propose a positive decision" to the
rest of the European Commission, he said.
Sarkozy said: "From the moment that the commissioner says there is the basis
for an agreement that means there will, conditionally, be satisfaction on both
sides: the commission, which has done its duty with respect to its principles,
and France, which has committed itself to ensuring the survival of this large
industrial group, Alstom."
aud-dt/far/phr/vm/wf

[ariane] 17/5/2004 07:03

FRANKFURT (AFX) - ThyssenKrupp AG said it signed a letter of intent with One
Equity Partners (OEP) to merge ThyssenKrupp Werften with Howaldtswerke-Deutsche
Werft (HDW) in a 240 mln eur deal.
OEP will receive 240 mln eur in cash and a 25 pct stake in the new
shipbuilding group controlled by ThyssenKrupp. The German steel conglomerate
will hold 75 pct.
Such a move could be a prelude to the creation of a European shipyard giant
along the lines of defence giant EADS, earlier press reports said,
particularly as France's Thales SA and state-owned DCN are also in tie-up talks.
amk/vs

[ariane] 17/5/2004 07:02

FRANKFURT (AFX) - ThyssenKrupp AG said it signed a letter of intent with One
Equity Partners (OEP) to merge ThyssenKrupp Werften with Howaldtswerke-Deutsche
Werft (HDW) in a 240 mln eur deal.
OEP will receive 240 mln eur in cash and a 25 pct stake in the new
shipbuilding group controlled by ThyssenKrupp. The German steel conglomerate
will hold 75 pct.
Such a move could be a prelude to the creation of a European shipyard giant
along the lines of defence giant EADS, earlier press reports said,
particularly as France's Thales SA and state-owned DCN are also in tie-up talks.
amk/vs

[ariane] 15/5/2004 15:12

LONDON, May 14 (New Ratings) - Analysts at Deutsche Bank downgrade Alstom (ticker: AOM ) from "buy" to "hold." The target price has been reduced from €2.5 to €1.2.

Shares of Alstom, a provider of technologically advanced products and systems for the world’s energy and transport infrastructure, are currently trading at €1.2.

According to Deutsche Bank's research note published this morning, Alstom is expected to significantly restructure the company in the near term. The downgrade in rating is based on the limited visibility into the restructuring process, which may include a change in Alstom’s debt-equity mix and the disposal of certain divisions of the company.

The restructuring programme may be driven by certain requirements from the company's lending banks and the European Commission, the analysts add. Deutsche Bank expects the associated uncertainties to raise concern among equity investors and the company's clients. Alstom is scheduled to report its full year results on May 26, with sales and pre-tax losses of €17 billion and €0.95 billion, respectively.

The EPS estimates for 2003, 2004 and 2005 are -€2.02, -€0.22 and -€0.02, respectively.

[grupo guitarlumber] 14/5/2004 15:44

Among second-liners, Alstom gained 0.02 to 1.17, halting the steady losses
over previous sessions, following a report that Finance Minister Nicolas Sarkozy
has proposed asset sales in order to secure EU Commission approval of another
financial restructuring for the engineering group.
This afternoon, Sarkozy maintained that he is "convinced" a solution for
Alstom will be found, and he is expected to meet with Competition Commissioner
Mario Monti again next week.
[e-mail]
js/cmr

[grupo guitarlumber] 14/5/2004 13:52

LONDON, May 14 (New Ratings) – Analyst Ben Uglow of Morgan Stanley maintains his "overweight" rating on Alstom (AOM.FSE). The target price is set to €2.60.

In a research note published this morning, the analyst mentions that Alstom is expected to form an industrial partnership with Areva, Siemens or both the companies. The concerns surrounding the partnership’s negative implications for the company’s shareholders is unjustified, the analyst believes. Morgan Stanley expects the EC to modify the current bond package and call for a private sector solution.