European Indexes Lower; Samsonite IPO Raises $1.25 Billion

Arthi Gupta
10 Jun, 2011
New York City

The European indexes slid after Italy reported weak GDP growth and German inflation index declined. Samsonite raised $1.25 billion in Hong Kong IPO. Vivendi got the European Commission approval for acquiring Vodafone

[R]1:00 PM Frankfurt – The European indexes slid after Italy reported weak GDP growth and German inflation index declined. Samsonite raised $1.25 billion in Hong Kong IPO. Vivendi got the European Commission approval for acquiring Vodafone’s 44% stake in SFR.[/R]

European indexes traded slightly lower after a batch of mixed economic data from France, Germany and Italy.

The Italian economy expanded at a slower pace of 1% in the first quarter after growing at 1.5%. German inflation edged lower and industrial production in France was nearly unchanged.

U.S. indexes futures traded lower on mixed economic data. Asian markets dropped after China''s weaker-than-estimated export growth.

China''s trade surplus increased in May to $13.1 billion from $11.4 billion in April. Exports grew 19.4% annually in May to $157.16 billion

The rating agency Moody’s placed seven banks on a review with a possible downward action. The rating agency has lagged the market perception in issuing its review on Portuguese banks.

The seven banks include Caixa Geral de Depositos, Banco Comercial Portugues, Banco Espirito Santo, Banco Santander Totta, Banco BPI, Caixa Economica Montepio Geral and Banif.

The European Central Bank President Jean-Claude Trichet hinted a rate hike as early as next month as growth in the 17-nation economy appears to be slowing amid high inflation.

Separately, the European Central Bank Vice President Vitor Constancio today proposed the establishment of a Euro Area Resolution Fund that could mitigate the impact of bank failures.

In Paris CAC-40 Index declined 20.91 or 0.53% to 3,857.74 and in Frankfurt DAX index edged higher 9.27 or 0.13% to 7,168.93. For the week, the CAC-40 Index fell 0.85%.

KKR and TPG Withdraw Bid for Nokia Siemens

Kohlberg Kravis Roberts & Co L.P. and TPG Capital have pulled out from a deal to acquire a majority stake in Nokia Siemens Networks B.V, a 50-50 joint venture between Finnish mobile phone maker Nokia Corp. and German telecom company Siemens AG.

The news was confirmed two bankers in London and was first reported in The Financial Times reported on Thursday.

Samsonite Raises $1.25 B in Hong Kong IPO

Samsonite International SA priced its initial public offering in Hong Kong at the bottom end of its revised price range, raising HK$9.73 billion or about $1.25 billion.

The company sold 671.2 million shares at HK$14.50 each to raise $1.25 billion, the sources have said.

Vivendi Receives EC Approval

Vivendi SA, the French media company said the European Commission has granted approval for its acquisition of Vodafone Group Plc''s 44% stake in SFR, the French mobile operator.

Earlier, in April, Vodafone announced an agreement to sell its entire 44% shareholding in SFR to Vivendi for a cash consideration of €7.75 billion.

Gainers & Losers

Akzo Nobel NV gained 0.07% to €48.51 after the Dutch specialty chemicals firm said its Chief Executive Officer Hans Wijers decided to step down with effect from Annual General Meeting 2012. Ton Büchner, currently President and Chief Executive Officer of Switzerland-based Sulzer AG has been appointed in his place, pending approval.

Autoliv Inc. gained 1.32% to $72.68 after the supplier of automotive safety systems announced that the representatives of the antitrust authorities of the European Commission visited 2 of Autoliv''s German facilities to gather information for an inquiry into possible anti-competitive behaviors among certain suppliers to the automotive vehicle industry.

ING Group NV climbed 1.29% to $11.81 after the Dutch financial services company completed the sale of Clarion Partners, ING''s U.S.-based private market real estate investment manager, to Clarion Partners management in partnership with Lightyear Capital LLC for $100 million.

Separately, the company said it estimates to repay the remaining €3 billion state aid from its banking unit''s own resources.

LVMH Moet Hennessy Louis Vuitton SA fell 0.17% to €116.70 after the French luxury goods maker said it does not plan to make a bid for Hermes International SA.

Nokia Corp. advanced 0.96% to $6.29 after the Finland-based mobile phone maker said that its Chief Technology Officer Richard Green has taken ''leave of absence'' to resolve a personal matter, but it did not issue a date of his return.

In another report, Nokia Corp. CEO Stephen Elop termed the rumors related to the sale of the company as ""completely groundless.""