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Smith & Nephew has confirmed Salamander Davoudi’s scoop that the company is in talks to merge with Biomet of the US. The company’s Q3 figures, out this morning, are more or less in line with expectations but its shares were off more than 2 per cent on our report – it looks like such a deal would dilute S&N’s earnings. I’d also like to know what happened to the US Attorney’s investigation into S&N’s agreements with surgeons. Other companies, including Biomet, also received subpoenas earlier this year. In the meantime, big plaudits for the FT Alphaville guys who got wind that something was up 10 days ago. They discussed the merits of a deal between S&N on Biomet in their Markets Live discussion this morning and rightly praised Bruce Nudell at Bernstein for pointing these out way back in mid-September.
As expected, the heavy cost of its poorly-delivered “free” broadband offering has hit Carphone Warehouse’s profits hard. But it is an indication of the group’s confidence in its ability to overcome this, and the blow of being dumped by Vodafone, that it is raising its interim dividend by a third.
Fun story on FT Alphaville: CQS, the hedge fund run by Michael Hintze which was one of the backers of Macquarie’s unsuccessful LSE bid, is launching an Aim-listed fund for building off-shore oil rigs. Is there some sort of scientific term for the collision of three investment bubbles?
Unilever this morning reported disappointing progress on margins but produced decent top-line growth. No news on a new chairman.
Vodafone has denied a report in The Times that it is in talks with Altimo, the telecoms arm of Russia’s Alfa Group. “We are not in any sort of negotiations,” a spokesman for the mobile phone giant told Reuters. The Times, however, quoted Kirill Babaev, a vice-president of Altimo, saying: “We are in negotiations with Vodafone, and with other large European telecoms companies.”
We’ve also checked out the story in The Telegraph that WPP has teamed up with Hellman & Friedman to make a joint bid for Sportfive, the sports rights marketing agency used by the Football Association, Euro 2008 and the Six Nations rugby tournament. However, it seems not to be WPP itself bidding alongside Hellman & Friedman, but an affiliate in which it holds a minority stake. We will probably run something, but only short.
A strong rise in BG Group‘s exploration and production and liquefied natural gas divisions helped the UK gas producer lift operating profits by 15 per cent for the third quarter, to £633m. The figures were in line with expectations. We should find out more later about its plans in Bolivia, where the government has been renationalising assets. ICI reported a 10 per cent rise in third-quarter profit to £144m, at the top of the range of market forecasts.