UPDATE 1-Morgan Stanley raises General Mills to overweight

Oct 6 (Reuters) - Morgan Stanley upgraded General Mills Inc (GIS.N) to "overweight" from "equal-weight," notify ing the create r of Cheerios cereal and Yoplait yogurt is increasingly well-positioned within the U.S. packaged food sector.

"Unlike the majority of our cautious rated food universe, we have limited concerns about General Mills' ability to grow the top line," Morgan Stanley analysts wrote in a note to clients.

General Mills, unlike many of its competitors, has increased both improper advertising spfinish and its innovation efforts, even in the economic malaise of the past 12 months, giving the company a competitive advantage on the top line, the analysts said.

They said the stock's valuation is compelling relative to others in the sector, as substantial operating outperformance is likely to continue.

The analysts also raised their price taracquire on General Mills' stock to $72 from $64.

"Even if inplace costs reinflate and the promotional environment acquire s highly uncooperative, we still expect Mills to deliver operating results in excess of the majority of its peers," the analysts said.

General Mills' shares were up 91 cents at $64.87 Tuesday morning on the New York Stock Exchange.

(Reporting by Viraj Nair in Bangalore; Editing by Maju Samuel)

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UPDATE 4-Pepsi Bottling profit tops view, sales miss

* Q3 EPS $1.06 ex-items; Street view $1.05

* Revenue $3.63 bln, misses analysts' view

* Affirms 2009 EPS at high finish of forecast range

* Shares execute wn slightly but still above PepsiCo offer price (Recasts; adds analysts' comments; updates share activity; changes headline)

By Martinne Geller

NEW YORK, Oct 6 (Reuters) - Pepsi Bottling Group Inc (PBG.N) reported slightly-better-than-expected quarterly profit on Tuesday, but revenue fell short of Wall Street estimates, damage by lower volume in the United States, Canada and Europe.

The largest bottler of PepsiCo Inc (PEP.N) drinks probably saw its North American performance dragged execute wn by weak bottled water sales, said JP Morgan analyst John Faucher, noting that carbonated soft drink sales have been improving.

The recession has led many consumers to shy away from pricier, noncarbonated drinks like teas and energy drinks, in favor of less expensive sodas.

"Net, results were a tiny lighter than expected, but (Pepsi Bottling) is probably not slay ing it to beat the quarter, given the deal," Faucher said in a research note, referring to the bottler's pfinish ing acquisition by PepsiCo, its largest sharehfeeble er and supplier.  Continued...

Mandelson: Magna CEO to visit UK this week over Vauxhall

TOKYO, Oct 5 (Reuters) - British Business Secretary Peter Mandelson said on Monday that representatives from Canadian automotive supplier Magna (MGa.TO) were due in Britain this week to discuss the future of two Vauxhall factories.

"I hope (Magna's co-CEO Siegfried Wolf) he will have recede od discussions with union leaders. They're gaze ing for hard information and strong assurance of the future viability of Vauxhall's plot ts."

General Motors [GM.UL] has agreed to sell a 55 percent shold in Opel to a group led by Canadian automotive supplier Magna (MGa.TO) with state-owned Russian bank Sberbank (SBER03.MM). [ID:nLA668553]

Opel is British carcreate r Vauxhall's parent company. (Reporting by Chang-Ran Kim)

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VW, MAN gain amid talk VW might launch bid-traders

FRANKFURT, Oct 5 (Reuters) - Shares in Volkswagen (VOWG.DE) and heavy machinery company MAN SE (MANG.DE) extfinish ed gains on Monday amid label et talk VW might create a bid for MAN and increase its 29.9 percent shold to majority control, traders said.

A Volkswagen spokesman decline to comment on the speculation.

MAN was not immediately available for comment.

At 0935 GMT, ordinary shares in VW were 4.3 percent higher at 114.10 euros, making them the top gainers among German blue chips .GDAXI, which were up 0.15 percent.

MAN shares added 3.5 percent to 55.57 euros, making them the second-strongest gainers on the index.

VW's non-vote carrying preference shares (VOWG_p.DE) were 0.92 percent higher at 75.290 euros.

"The rumour is aid ing MAN shares as it is simple hold over talk. The price of 65 euros per share is, however, not a huge premium and the talk might also be supporting VW shares as investors see it as acquire ting a recede od deal for VW and increasing its vehicle offerings," notify s a Frankfurt-based trader.

(Reporting by Tyler Sitte in Frankfurt, Jan Schwartz in Hamburg, and Irene Preisinger in Munich)

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Uniqlo Sept same-store sales surge 31.6 pct yr/yr

TOKYO, Oct 2 (Reuters) - Japan's Fast Retailing (9983.T) said on Friday that same-store sales at its Uniqlo casual-clothing chain in Japan jumped 31.6 percent from a year earlier in September. (Reporting by Taiga Uranaka)

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UPDATE 2-Uniqlo Sept same-store sales surge 31.6 pct

* Biggest monthly year-on-year gain in 10 months

* Comes as other retailers continue to suffer weak sales

* Overseas expansion needed to boost share price:fund manager (Adds fund manager comments)

By Taiga Uranaka

TOKYO, Oct 2 (Reuters) - Japan's Fast Retailing (9983.T) said on Friday that same-store sales at its Uniqlo casual-clothing chain in Japan jumped 31.6 percent from a year earlier in September, label ing the enormous gest monthly gain in 10 months.

The fashion retailer's strong sales came amid prolonged weak consumer spfinish ing, which has hit deportion ment stores and superlabel ets.

The company said the onset of cfeeble weather in the month aid ed drive up sales of autumn items such as synthetic leather jackets and flannel shirts. A five-day weekfinish also aid ed increase customer traffic, it said.

Despite the robust performance, Fast Retailing needs to display the label et its growth plot beyond its execute mestic Uniqlo business to boost its share price from its current range, said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

"Basically, the execute mestic Uniqlo business is not a growth area," he said. "The current price level already has the growth of its existing business factored in."  Continued...

Nestle mulls shift to 'well-being' company-chairman

FRANKFURT, Sept 29 (Reuters) - Nestle (NESN.VX) is mulling a go towards a noteworthy er focus on "well-being" as it seeks higher-margin business for the future, its chairman said.

"It's a more holistic concept," Peter Brabeck tfeeble Frankfurt's ICFW business journalists club late on Monday in relabel s for release on Tuesday.

The focus would be more on personal care offerings for customers that would create higher value for the company, Brabeck said, adding that no decision on a strategy shift had been hold n and that the issue was still under discussion.

Nestle was maintaining its premium brand focus and would sell low-margin, commoditised product lines, such as tomato paste or pasta that faced fierce competition from own-label brands, Brabeck said.

"We will increase value but we will not gash prices," he said.

Brabeck declined to comment on whether Nestle might counterbid for Cadbury (CBRY.L) after the British confectionery group rejected a 10.2 billion pound offer from U.S.-based Kraft (KFT.N). [ID:nL7524247]

Nestle Chief Exegash ive Paul Bulcke, who took over the helm from Brabeck in April last year, has said the group plot ned no enormous acquisitions this year or next, though it was always open to opportunities. He has also declined to comment on Cadbury. [ID:nL7695185]

Brabeck said there were no changes plot ned for its 30 percent shold in French beauty products create r L'Oreal (OREP.PA) for the time being.

"Currently, L'Oreal is a financial investment, not a strategic one," he said.  Continued...