European Stocks Climb to Seven-Week High; ICAP, Barratt Gain
March 10, 2010, 12:12 PM ESTBy Sarah Jones
March 10 (Bloomberg) -- European stocks rose, sending the Stoxx Europe 600 Index to a seven-week high, amid speculation that mergers and acquisitions will increase and optimism that Greece’s financial crisis will be contained.
ICAP Plc, the world’s largest broker of transactions between banks, jumped to a one-month high after rival Tullett Prebon Plc said it’s in takeover talks. Barratt Developments Plc rallied the most in three months on speculation the builder may also be a bid target. Alpha Bank SA led Greek stocks higher as former European Commission President Romano Prodi said the worst of the nation’s budget crisis is over.
The Stoxx 600 rose 0.6 percent to 258.24, the highest close since Jan. 19. The benchmark gauge for European equities has soared 63 percent since March 9 last year as governments and central banks around the world maintained low interest rates and committed more than $12 trillion to stimulate the economy.
“I expect to see an increase in M&A as companies are now in a better position to actually do the deals,” said Kevin Lilley, who helps oversee about $2 billion at Royal London Asset Management. “Prices are quite a bit less from the peak. It’s the right time to be doing it and companies can get access to capital.”
Greek Crisis
Investor confidence improved this month in 8 of 10 nations tracked by the Bloomberg Professional Confidence Survey on growing signs that the budget crisis in Greece won’t derail the global economy. Greek Prime Minister George Papandreou said after a meeting at the White House yesterday that U.S. President Barack Obama expressed support for the measures he’s taking.
“For Greece, the problem is completely over,” Prodi said in an interview in Shanghai. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”
National benchmark indexes climbed in all 18 western European markets, except Ireland. The U.K.’s FTSE 100 gained 0.7 percent, while Germany’s DAX and France’s CAC 40 rose 0.9 percent.
Greece’s ASE Index rallied 2.6 percent as Alpha Bank, the nation’s third-biggest lender, soared 6.2 percent to 7.56 euros and EFG Eurobank Ergasias SA, the second-largest, gained 4.9 percent to 6.61 euros.
ICAP climbed 4.5 percent to a one-month high of 370.4 pence. Tullett Prebon, the London-based based inter-dealer broker led by Terry Smith, said it’s in early talks with an undisclosed bidder that may lead to an offer.
Tullett Offers
Australia’s Macquarie Group Ltd. and Bank of China Ltd. are considering offers, the Daily Mail reported earlier today, without saying where it got the information. The most likely purchaser would be a stock exchange, according to Numis Securities Ltd. analyst James Hamilton.
Tullett shares surged 26 percent to 390 pence, the largest jump in a year. Nigel Szembel, a spokesman for the broker, declined to comment.
Barratt Developments gained 5.6 percent to 121.9 pence, the most since Dec. 16, amid speculation the U.K.’s biggest homebuilder by volume may receive a takeover approach from rival Persimmon Plc.
“I find it very difficult to see why someone would want to jump now,” said Chris Millington, an analyst at Numis Securities in London. “Persimmon has a long landbank at the moment and such an acquisition would hugely increase its gearing. Builders may as well buy land in the open market to get the margin boost.”
Dan Bridgett, head of external affairs at London-based Barratt, declined to comment. Marylene Guernier, a spokeswoman for Persimmon, said the company never comments on market speculation.
Fortis Gains
Fortis climbed 3.1 percent to 2.80 euros after the owner of Belgium’s biggest life insurer reported full-year net income of 1.19 billion euros ($1.6 billion), beating the 1.12 billion-euro median of 12 analyst estimates compiled by Bloomberg. The company said it will resume dividend payouts less than a year after emerging from its breakup.
Valeo SA rallied 8.2 percent to 24.75 euros, the biggest advance since June. France’s second-largest car-parts maker said it aims to outpace auto-industry growth in the next decade by developing fuel-saving engine technology and expanding in emerging markets.
Aixtron AG jumped 8 percent to 25.88 euros, leading a measure of technology shares to the biggest gain in the Stoxx 600, after the maker of specialized equipment used to produce LED screens posted a 95 percent increase in full-year net income. The company said it’s targeting 2010 sales of 600 million euros to 650 million euros, compared with last year’s revenue of 302.9 million euros.
Mondi, Lottomatica
Mondi Ltd. advanced 3.8 percent to 456.4 pence as BofA- Merrill Lynch Global Research raised its recommendation for Europe’s largest maker of office paper and paper bags to “buy” from “neutral.”
Lottomatica Group SpA rose 2.9 percent to 14.45 euros after the Italian lottery company said a Rome court accepted an appeal in a Scratch & Win case.
Inchcape Plc slid 4.3 percent to 28.26 pence for the biggest decline in the Stoxx 600. The operator of car dealerships, which surged 7.4 percent yesterday, said “difficult” trading conditions will continue until “well into the second half of 2010.”
--With assistance from Tim Barwell in London. Editors: Andrew Rummer, David Merritt.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.
