Bloomberg News

European Stocks Rise; International Power Shares Advance

April 16, 2012

European stocks rebounded from their longest stretch of weekly losses since August as companies from International Power Plc (IPR) to Royal KPN NV rallied amid an increase in takeover activity.

International Power jumped 3.2 percent after GDF Suez SA agreed to pay 6.4 billion pounds ($10 billion) for the stake in the U.K. utility that it doesn’t already own. KPN climbed after saying it’s reviewing its Belgian mobile-phone unit. French banks paced declining shares.

The Stoxx Europe 600 Index rose 0.3 percent to 254.26 at the close in London, paring an earlier rally of as much as 1.2 percent. The gauge fell last week, for a fourth week of losses, amid renewed concern the euro area’s debt crisis is worsening and as China’s economic growth slowed.

“There is volatility out there at the moment,” said Kevin Gardiner, head of global investment strategy at Barclays Wealth in an interview on Bloomberg Television. “When the dust settles, the underlying profitability of average large quoted companies is actually pretty resilient. Investors will eventually come back in and capitalize on that opportunity.”

The benchmark Stoxx 600 has risen 4 percent this year as the European (SXXP) Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders and as U.S. economic reports topped forecasts. The number of shares changing hands on gauge today was 4.8 percent greater than the average over 30 days, data compiled by Bloomberg show.

U.S. Retail Sales

A report today showed that U.S retail sales climbed 0.8 percent in March. The increase was almost three times as large as economists had predicted and followed a 1 percent advance in February.

National benchmark indexes climbed in 12 of the 17 western- European markets that were open today. The U.K.’s FTSE 100 advanced 0.3 percent and Germany’s DAX rose 0.6 percent. France’s CAC 40 increased 0.5 percent. Greece’s stock market was closed for the Orthodox Easter holiday.

International Power added 3.2 percent to 416.8 pence after GDF Suez (GSZ) agreed to buy the 30 percent stake at a revised price of 418 pence a share. That’s 7 percent more than an earlier offer of 390 pence that the U.K. utility rejected as too low. GDF increased 5 percent to 18.86 euros as Europe’s biggest utility by market value confirmed that it will raise its 2012 targets if the deal goes through.

KPN, Vestas Climb

KPN rose 0.9 percent to 7.12 euros after the Netherlands’ largest phone company said it has started a review of Belgian mobile-phone unit, BASE. The business will probably attract interest from private-equity firms such as Apax Partners LLP, according to people familiar with the situation. BASE may fetch 1.8 billion euros in a sale.

Vestas Wind Systems A/S (VWS) surged 13 percent to 55.55 kroner for the biggest gain on the Stoxx 600. Jyllands-Posten reported that Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co. are considering bidding for the Danish company. The newspaper cited unidentified people it said were close to the process. Andrew Hilton, a Vestas spokesman, declined to comment when contacted by Bloomberg News.

Denmark’s government wouldn’t block a bid for Vestas by a Chinese company, Danish Energy Minister Martin Lidegaard said today in Copenhagen.

A.P. Moeller-Maersk A/S increased 0.8 percent to 41,600 kroner after Denmark’s biggest company said Maersk Mc-Kinney Moeller, the main owner and son of the firm’s founder, died today. He was 98.

Pernod-Ricard, InBev

Pernod-Ricard SA (RI) rose 1.6 percent to 77 euros after Morgan Stanley upgraded France’s biggest distiller to overweight, the equivalent of a buy recommendation, citing a recent selloff in the shares.

Anheuser-Busch InBev NV (ABI) gained 1.6 percent to 55 euros, after the world’s largest brewer agreed to buy control of Cerveceria Nacional Dominicana, the Dominican Republic’s biggest beermaker, for $1.24 billion.

AB InBev’s AmBev unit will pay CND’s majority owner E. Leon Jimenes SA about $1 billion cash, according to a statement today. AmBev will also acquire a 9.3 percent stake in CND owned by Dutch competitor Heineken NV (HEIA) for $237 million. Heineken rose 1.4 percent to 41.84 euros in Amsterdam.

BNP Paribas, SocGen

BNP Paribas SA led a selloff in banks amid concern that the election of France’s next president won’t lead to a reduction in the country’s debt. France’s biggest lender slid 4.6 percent to 29 euros, Societe Generale SA fell 4 percent to 17.10 euros and Credit Agricole SA lost 4.8 percent to 3.72 euros.

Socialist candidate Francois Hollande, who’s leading in the polls ahead of Nicolas Sarkozy, signaled that he may increase the minimum wage. He has pledged to push back the retirement age to 60 from 62 for some people and said he wants to hire more teachers at public schools.

“Many say that the scale is tipping in favor of Hollande,” said Yves Maillot, the head of investments at Robeco Gestions SA in Paris, who helps oversee $6.8 billion. “In this case, there is an argument for the market to question the subject of debt a bit more. But it’s a concern no matter who wins the election.”

Kuehne & Nagel International AG tumbled 9.5 percent to 107.80 francs after the company reported a 14 percent drop in net income excluding one-off payments to 133 million francs ($145 million). The average estimate of seven analysts surveyed by Bloomberg called for profit of 143 million francs.

Aquarius Platinum Ltd. dropped 4.6 percent to 129.5 pence after Zimbabwe ordered local and foreign mining companies to reapply for exploration rights. Aquarius generated 25 percent of sales in the fiscal year through June from its Mimosa venture in Zimbabwe.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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