Markets live chat transcript for the chat ending at 11:44 on 25 May 2007. Participants in this chat were: Chris Hughes (CH) Andrew Slade (AS)
CH: Good day and welcome to Markets Live – FT Alphaville’s daily discussion opf what is moving in the markets.
CH: Paul Murphy remains in Florida. Which gives me, Chris Hughes, the pleasure of hosting Markets Live today.
CH: I am joined today by FT.com’s news editor, Andy Slade, no less. Neil Hume is out taking care of business.
AS: Morning. Pleasure to be here. I see what they mean about the kit here.
CH: Great photo, mate.
CH: Taken years off you …
AS: Likewise, dude
CH: It is a pleasure to be here – it is indeed a great honour. For we can now reveal that the reason for Paul’s presence in Florida.
AS: …is that he was busy bagging a gong
CH: best business blog
AS: I’ve managed to pull up some of the judges specific comments about Markets Live — about their work specifically.
CH: er go on …
AS: Kathleen Buckly says, “Not only is it timely but it is clear, even for people like me. The Markets live chats are fast, informative and delivered with obvious understanding and good old reporting. We sometimes forget about that, sidetracked by personality and presentation.
CH: see…. ”Good old reporting….”
AS: not just printing any old rubbish
CH: Indeed. I should say, the full award is “business blog affiliated to a media organisation”
AS: Must be a crate of fizzz in that for us. shall we move on?
CH: Yep … so what’s out there?
AS: FTSE off again – down 14.7 at 6550.7
AS: Choppy session on Wall Street.
AS: Asia a bit wobbly too – HK down. North Koreans playing with their foireworks agsin
CH: Still quite a bit going on in London. We should talk about EMI.
AS: Yeah. Jim Fifield, the old boss, has put out a statement.
CH: Saying?
AS: Let me paste …
AS: Jim Fifield, former Chief Executive of EMI, confirms he had been actively working with Corvus Capital in respect of a possible offer for EMI and that he was therefore acting in concert with Corvus Capital. Jim Fifield and Corvus Capital wish to clarify that it was not the intention for him to be held to the terms of that announcement and Jim Fifield therefore wishes to confirm that he remains interested in potentially making an offer for EMI.
CH: Corvus being Andrew Regan’s outfit, which said on Wednesday it wasn’t interested anymore.
AS: Correct. But it looks like Jim still is.
CH: EMI has already recommended a deal with Terra Firma , the private equity firm.
AS: But I guess this means there’s more chance of an auction now.
CH: Let me check the shares … up 2.75p at 275.25p in a down market
AS: Market not going crazy on this one.
AS: NY Post also had Charles Koppelman, another ex-EMI hand, may be interested. Chairman of Martha Stewart, no less
CH: The other big story today is this bid for OMX – the Scandi xchange – by Nasdaq.
AS: Yeah – Nasdaq hinted it might do this when it was trying to buy the LSE.
CH: Obviously it wasn’t bluffing. Does this mean they won’t buy the LSE then?
AS: You could call it the other way.
AS: They are now a bigger company. So that gives them more firepower to buy out the LSE.
CH: And they’ve still got that 30% stake from the bid. What’s the market saying?
AS: Shares up 14p at £13.24, a bit more than 1 per cent
CH: But LSE’s boss Clara Furse seems pretty intent on independence.
AS: She’s seen off Nasdaq, Macquarie and Deutsche Boerse, so it seems that way
CH: Ok, what else is moving today?
AS: Experian also doing well on the back of a bullish note from Merrill Lynch
CH: I’ve got that note
CH: I’ll paste you a bit
CH: The re-rating of Experian’s credit bureau and marketing peers, some of which
have recently been the subject of private equity bids, has led us to increase our
sum of the parts valuation to 666p. We have raised our price objective from 654p
to 680p, based upon the average of this sum of parts and our theoretical DCF
valuation of 694p. This would equate to a P/E multiple of 18x to March 2009E,
which still looks reasonable relative to 2009/10E growth.
We believe that the shares should re-rate, as investors price in future growth and
cash flow expectations.
AS: Experian up 1 per cent at 617p.
CH: We’ve got a questoin about Cazenove …
AS: We’ re hearing it’s not terribly senior bods involved, so perhaps no big deal
CH: Three people, two off to the country ..
AS: One off to a rival
CH: So back to the markets
AS: Woolworths moving. Its UK distrbution business has signed a deal to sell DVDs and CDs to Asda. Trevor Bish-Jones reckons it will add £200m to revenues. But knowing who Asda’s parent is, can;t imagine the margins will be very fat.
CH: Woolies up 1.8% to 28.25p.
CH: Some relief for Bish-Jones who’s had a rough ride lately.
AS: Lots of movement in some of the smaller stocks too.
CH: Like REGENT INNS
AS: Ouch. Shares off 18 per cent on a profit warning. 88.25p. Not very funny for the people that own Jongleurs
CH: I had my stag do there
CH: Spent a bit of money
AS: In the days when you had some?
CH: Old Orleans not doing very well they say
AS: I have some reaction from Investec.
AS: Trading is weak, caused by underperformance at the Entertainment Bars
division and delays to the refurbishment of Old Orleans. We expect to reduce
our top-of-the-range estimates by c.25% in the current year and by c.13% in
2008. We retain our SELL recommendation and place our target price under
review.
CH: Company says the impact on its profitability will be “short term”….
AS: We’ll see.
CH: Panmure Gordon says Regent is still a consolition play. I.e. could get a bid.
CH: On a positive note, cash flow and net debt are in line with expectations, supported by
slightly lower capex and favourable working capital movements. Thus, Regent Inns is
continuing to generate c£10m of positive free cash flow, implying a yield of 7%, rising to
9% in 2009E based on revised forecasts and a target price of 100p. We still expect the
company to feature in sector consolidation one way or another.
AS: Bit of damage in the pubs sector, in fact. Marston’s also off. But results today were in line. M&B also down
CH: Deutsche just cut M&B to HOLD from BUY.
AS: Strange – ABN has raises target to 980p from 850p and keeps at ‘buy’
CH: There’s some pain for investors in SMC Group too.
AS: Who they?
CH: Architects. Warning it could see “significantly”reduced profit for the six months to June.
AS: Seen this RBS news? They say they’re going to put out statement re ABN on Tuesday, not Sunday, Three of Europe’s biggest banks obviously forgot it’s a Bank Holiday across le continenton Monday. Even more important, Fred is off to the Monaco Grand Prix on Sunday – RBS sponsors BMW
CH: I seem to remember something similar happening during RBS’s bid for Natwest.
AS: How very civilised. Shall we talk about Admiral?
CH: They have confirmed a bid for Confused.com, a price comparison site for insurance
AS: they of the irritating daytime tv ads
CH: Shares up 2.8% at 1005 on this
AS: Talk is of £700m, which sounds punchy
CH: Buyers seem to like these assets don’t they?
AS: They do. Moneysupermarket.com plans a listing that cld value it at…
CH: …. up to £1bn.
CH: Remember the hoo-hah with Tate & Lyle earlier this week?
AS: I do. a bit of confusion among our analyst friends
CH: The house broker, Citigroup, hinted it might downgrade
CH: And now he has
AS: FY08 Estimates — In our 23 May \\’First Thoughts\\’ note, we interpreted Tate & Lyle
guidance that “the coming year will essentially be one of transition” as a signal that
that FY08 PBT will likely be broadly flat on a pro-forma basis (£289m in FY07A).
Following the results presentation, we see no reason to change our view and adjust
our FY08 estimates accordingly (PBT -9%, continuing adj. EPS -7%).
CH: ABN has also cut to 700p from 725p.
AS: That’s poetic – ABN used to be the house broker to Tate, but Citigroup poached the mandate
CH: shares down 7.5p at 603
CH: One last thing …
AS: It’s HSBC‘s AGM today
CH: US looks to have steadied, Asia and Europe growing. Says investment bank positioned to be ‘emerging markets led and financing focussed’. So there you have it.
AS: Phew – subprime crisis over, then
CH: Question about Pennon.
AS: There’s fresh bid talk today
CH: UK companies editor, Charlie Pretzlik is here
AS: scratching his head.
CH: No new stuff from FTAlphaville on water today – you had it all earlier this week.
AS: shall we wrap it up now?
CH: Very wise. So congratulations once again to Paul and the rest of the regular team.
AS: See you next week. Don’t forget (RBS) that it’s a bank holiday Monday, so Paul & co will be back tues.
CH: Bye all have a good weekend.
AS: Over and out from me, too