Oslo shares close higher, led by Scan Subsea, Belships; Norske Skog lower UPDATE

Oslo shares close higher, led by Scan Subsea, Belships; Norske Skog lower UPDATE

	Published : Mon, 15 Oct 2007 15:59 By : Agencies Print this Story

(Updating with full report)

OSLO (Thomson Financial) - Share prices closed higher, led up by Scan Subsea following a bid for the company by Parker-Hannifin, and by Belships on strong bulk transport rates, while Norske Skog was lower after Finnish peer UPM-Kymmene issued a profit warning, according to dealers.

The OSEBX Benchmark index closed 3.31 points higher at 508.75 and the OSEAX All Share index rose 4.60 points to 588.85.

Total turnover amounted to 13.02 bln nkr.

Scan Subsea closed 2.6 nkr higher at 21.6 and Blom added 3 to 65.5. Scan Subsea rose sharply after the firm's board said it was recommending a takeover bid from US peer Parker-Hannifin that values the Norwegian firm at 1.4 bln nkr.

The offshore services company said it has agreed to the 22 nkr per share takeover offer, which represents a premium of 33 pct to the average volume-weighted share price over the last 30 days and a 16 pct premium to its closing price last Friday.

Shareholders representing 61.8 pct of Scan's shares, including the largest shareholder Blom, have agreed to accept the offer, which requires the support of at least 90 pct Scan's shareholder base.

Belships rose 1.2 to 31.2, building on recent rises and tracking gains made by US peers, as dry bulk rates continue to rise on record demand, driving the bulk transport index Baltic Dry Index to yet another record today, dealers said.

According to brokers, the rapid rate of growth in dry bulk shipping rates results from a higher-than-expected seasonal demand for grain globally and for coal from the Northern Hemisphere ahead of winter.

Port congestion at key ports is also exacerbating the current tightness.

However, Jinhui Shipping shed 2 to 79 and Golden Ocean was 0.55 lower at 39.45 on profit-taking after their recent rises.

Havila Shipping was up 0.5 at 99. The company has ordered a new platform supply vessel from Norway's Fjellstrand Verft in a deal worth 260 mln nkr.

Golar LNG shed 2.5 to 138 and Frontline was 3.25 lower at 236.75.

Petroleum Geo-Services added 4.5 to 163.5. The group will recognize approximately 150 mln usd of deferred taxes in its third-quarter accounts as it now expects to benefit from reduced future taxes. The Norwegian seismic firm is scheduled to release the results on October 24.

Wavefield Inseis shed 1.1 to 46.1. The group has initiated 'a joint effort' to review the causes of the shortfall in third-quarter revenues announced by merger partner TGS-Nopec Geophysical last week.

TGS-Nopec was down 3. at 90.4.

Prosafe rose 2 to 95. Late on Friday the firm announced a 67 mln usd accommodation rig deal.

StatoilHydro was up 4 at 186. Dealers said CitiGroup raised its target price for the stock to 200 nkr from 179.5, seeing WTI crude rising by 10 usd a barrel to 70 next year.

The stock was also supported by the high crude oil prices, which hit fresh all-time highs in London and New York as continuing supply concerns were reinforced by heightened tensions between Turkey and Kurdish rebels in northern Iraq.

Seadrill rose 4.25 to 131.75, Stolt-Nielsen was up 4.5 at 162.5 and Subsea 7 added 3.25 to 152.

Norske Skog was 2.65 lower at 49.85, extending recent falls, after Finnish peer UPM-Kymmene issued a profit warning, raising fears that the whole sector is struggling to hold down wood costs, dealers said.

UPM said its third-quarter operating profit, excluding special items, would come in below last year's 209 mln eur, blaming higher wood costs and a strong euro.

Yara International added 2.5 to 180. Morgan Stanley has upgraded Yara to 'overweight' from 'equal-weight', with an increased price target of 206 nkr from 145 on valuation grounds, according to market sources.

The broker, which also raised its EPS estimates on Yara to 14.7 nkr from 13.0, said it thinks the improved demand outlook could trigger a surge in fertilizer prices.

Tomra Systems was 0.3 higher at 36.8. The group posts third-quarter results shortly after the market close. The consensus is for operating profit of 125 mln nkr, down from 194 mln, on sales of 885 mln usd, compared with 1.01 bln.

Kongsberg Automotive added 0.5 to 38. The firm is to acquire the automotive activities of US firm Teleflex for 560 mln usd in cash.

Norsk Hydro added 1.7 to 82.6, Aker Kvaerner was 1 higher at 186.5 and Aker Yards rose 0.25 to 72.75.

Renewable Energy Corporation shed 5 to 251, although DnB NOR Markets raised its target price for the stock to 300 nkr from 280, on an unchanged 'buy', ahead of the group's third-quarter earnings on Oct 26, when the broker expects REC to post a topline of 1.6 bln nkr and EBITDA of 750 mln nkr.

'However, news about capacity expansions is still the main driver behind share price moves,' DnB NOR Markets said. 'We don't exclude the possibility that management will use the opportunity to announce further investments in this connection.'

Tandberg rose 0.25 to 138.25. DnB NOR Markets reiterated its 'buy' stance and 180 nkr target price for the stock ahead of the group's third-quarter earnings, due soon after the market close today.

While the market consensus is for operating profit of 35.7 mln usd, up from 24.9 mln, on sales of 153.8 mln usd, compared with 109.6 mln, the broker sees sales of 156 mln usd and EBIT of 36 mln usd.

'The share has traditionally reacted relatively sharply on the quarterly figures compared with many other shares,' DnB NOR Markets said. 'The absence of a share issue following the Codian acquisition indicates that management is comfortable with developments. We expect the focus to be on the cash flow and the integration and financing of the Codian acquisition.'

Telenor shed 0.75 to 114.5.

Storebrand was down 1.3 at 88.2, with investors ignoring an upgrade to 'buy' from 'hold' at SEB Enskilda.

The broker said Storebrand has demonstrated that it intends to play an active role in the consolidation of the Nordic life insurance market through its acquisition of SPP, which creates a platform in Sweden with potential for significant value creation for Storebrand's shareholders.

'We now see attractive upside both with and without the SPP acquisition being included and have therefore upgraded our recommendation to 'buy' from 'hold',' SEB said. 'Our target price of 107 nkr per share factors in a 1.25x P/EV for the existing Storebrand life insurance operations and assumes value creation from SPP of 1.5 bln nkr over 12 months.'

DnB NOR shed 0.3 to 86.5 and Orkla fell 0.1 to 96, while Schibsted rose 4 to 297.

michael.delaine@thomson.com

mdl/jfr

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