The Week Ahead: Arcelor offers €5bn carrot to reject Mittal's €21bn stick

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The Independent Online

The waiting is finally over. As the steel giant Arcelor readies itself for an extraordinary general meeting later this week - when it will seek permission to return €5bn (£3.4bn) to investors - Mittal's €20bn hostile approach for its rival looks set to be formally launched.

It has been a long time coming, as regulators in various jurisdictions mulled over the approach, first revealed in January. But Lakshmi Mittal's group will now be able to market its bid direct to shareholders, while Arcelor will no doubt go into further detail about its defence plans, such as that €5bn carrot.

The proof, meanwhile, will be in the pudding for BAA on Tuesday. Two weeks after the airport operator sent out its circular to shareholders telling them that the offer from Spanish suitor Ferrovial "does not begin to reflect BAA's true value", it is expected to deliver results in line with analyst expectations.

The stockbroker Charles Stanley predicts £650m in pre-tax profit, up from £636m the year before. Management is prohibited from talking in any detail about Ferrovial's affections but the Spaniards are unswerving, especially after the company handily beat analyst earnings estimates thanks to diversification into areas such as airport services.

When British Airways drops its annual results on Friday, Charles Stanley is looking for it to unveil £530m in pre-tax profits. That is better than the £513m the year before, despite fourth-quarter numbers that are expected to be weak in line with seasonal fluctuations.

Another former monopoly, BT, reports on Thursday with results that Williams de Broë predicts will be solid. Doubts still linger, however, about its long-term future in the face of growing competition.

On Thursday, Boots hopes to dispel some of the confusion surrounding its performance. Matthew McEachran of Investec expects the UK's largest chemist to register £343m in operating profit in its annual earnings call, but added that numbers may be deceiving. Since last year the company has sold its over-the-counter medicines unit to Reckitt Benckiser, and has invested a great deal of money in rejigging the appearance of some of its stores and slashing prices to gain back territory from competitors, such as Tesco, which have elbowed their way on to its patch.

"It's a very complicated picture, with the disposal, re-investment and the return of cash," said Mr McEachran. "We'll be looking at margins and like-for-like sales at its continuing business." The company is set to hold a shareholder meeting next month to approve its merger with Alliance UniChem.

InterContinental Hotels has first-quarter earnings on Tuesday, when its numbers should reflect the better performance it has been able to achieve after selling off great chunks of its real estate portfolio.

Beer company SABMiller continues to extend its bar-room reach. When the group, one of the world's biggest brewers, publishes its annual results on Thursday, its latest foray will be in the frame. "The main focus will be Bavaria," said Matthew Jordan of Dresdner Kleinwort Wasserstein. The Colombian brewer, which shares its name with the German province, was bought by SABMiller last year but questions have been raised about its accounting practices and how its numbers will come out once translated to comply with international standards. "It will be better in profits but it might be worse in terms of revenue," said Mr Jordan.

Investors will also be anxious to guzzle news about SABMiller's South African operations, where sales of its Castle beer have fallen.

A week after VT and its partner BAE Systems called off their possible acquisition of defence contractor Babcock International, the shipbuilder will unveil annual results on Tuesday that should leave investors feeling just fine about VT's loner status. Sandy Morris of ABN Amro expects pre-tax profit to have risen 31 per cent to £54.7m.

VT is riding a wave of good news, including being chosen last month as the preferred bidder to build three patrol boats for Oman. "Our heroes seem to be in great shape," said Mr Morris.

VT is also in the running for several multi-billion-dollar service contracts, including a military flying training programme that Mr Morris said could be "transformative" for the group.

Compass, the world's largest caterer, has done much in recent months to reverse the slide in its share price caused by several cuts to profit forecasts, corruption allegations in its bidding practices and questions about management succession. The new chief executive, Richard Cousins, will now be under pressure to get the numbers going in the right direction.

Williams de Broë expects a pre-tax profit of £220m, down from the £229m last year, though part of that fall can be attributed to the sale of its SSP travel services business.

Much further along the turnaround road is J Sainsbury. Charles Stanley expects the supermarket group to report 4.1 per cent growth in like-for-like sales, which would represent its best set of figures in quite some while.


Tomorrow 15

UK RESULTS: (final) Robert Wiseman Dairies, Torotrak,; (interim) RM

Tuesday 16

UK RESULTS: (F) BAA, Big Yellow, Bizspace, VT, Tangent Communications; (interim) Compass, Enterprise Inns, Intercontinental Hotels, ScS Upholstery, Slimma

Wednesday 17

UK RESULTS: (F) Firstgroup, iomart, J Sainsbury, Land Securities, Mice, Rensburg Sheppards(I) De Vere, Jessops, Holidaybreak, Baggeridge Brick

Thursday 18

UK RESULTS: (F) Aveva, BETonSPORTS, Boots, BT, Investec, National Grid, Oakdene Homes, Phoenix IT, SABMiller; (I) Avon Rubber, Euromoney Institutional Investor

Friday 19

UK RESULTS: (F) British Airways; (I) Hardys & Hansons