THE 2.4 billion disposal of Scottish Newcastle’s 1400-strong pubs chain to Spirit yesterday appears to have gone down about as well as a flat pint with the City.
A clutch of big brokers have come out with some bearish comments on the brewer. UBS has downgraded from buy to neutral and slashed its target from 450p to 380p, saying it lacks a catalyst ahead of interims in December.
US securities house Goldman Sachs has repeated its underperform rating and cut its 2004 earnings forecast from 39p to 29p a share, and the estimate for 2005 from 43p to 32p. It warns that the disposal leaves the brewing business on a valuation that is too high compared with European rivals.
The dividend is being financed out of debt, Goldman adds.
Lehman Brothers is reputed to have lowered its target to 340p compared with today’s price of 3463/4p, down 91/4p.
Share prices generally traded in a narrow band.
The FTSE 100 index fell 13.5 points to 4256.6 undermined by opening falls on Wall Street this afternoon.
The ITV merger twins extended this week’s gains after the Government’s all-clear for the deal. Granada firmed 81/2p to 1111/ 2p on turnover of 225 million, while Carlton Communications was 223/ 4p better at 2041/4p as 95 million shares were traded. Broker Numis is pleased the 4.2 billion merger can go ahead, creating one big ITV franchise. It has raised its target for Granada from 117p to 132p, which implies a 240p target for Carlton.
Another dramatic twist was recorded in the tale of Manchester United, up 12p at a three-year high of 247p, after Rupert Murdoch’s BSkyB sold its entire 9.9% stake in the Premier League side.
In the first trade of the day in the stock, Goldman Sachs paid 239p (62 million) for the 25.95 million shares. It sold them on to Irish shareholders JP McManus and John Magnier, stretching their joint stake to about 23%. They also bought 4.5 million more shares in the marketplace this afternoon.
Meanwhile, Man U chief executive David Gill has paid top dollar for 16,881 shares at 245p, stretching his total holding to 57,138, while Nick Humby has bought 11,535 and now owns 31,390.
Total turnover in the shares reached 35 million and it now looks as if a full bid is on the cards.
Malcolm Glazer, owner of the NFL’s Tampa Bay Buccaneers, last week doubled his stake to almost 6% and several other large parcels of shares changed hands. Hedge fund Lansdowne sold 2.2 million shares yesterday.
BT rose 23/4p to 188p as more than 114 million shares changed hands.
This included a line of 100 million shares at 187p as part of a late converted trade. Dealers say it was a currency switch, or a move by one fund to another.
Defence contractor BAE Systems was marked 13/4p higher to 1813/ 4p following an upgrade by broker UBS which has raised it from neutral to buy and lifted its 12-month target from 165p to 210p.
Gas distributor Centrica shaded 11/4p to 1903/4p, though broker Merrill Lynch has raised its recommendation from neutral to buy and set a target of 215p. Merrill says the group’s strategic refocusing and investment in customer relationship management should lift margins.
Celltech fell 63/4p to 363p after broker ING turned buyer following a review of the European market for auto-immune diseases.
