Markets & Finance

European Indexes Mostly Flat


M&A was in the news as traders prepared for the long weekend

From Standard & Poor's European MarketScope

European indexes were tepid Thursday morning before the easter weekend. Oil was at US$64.42/bbl post EIA data and after an end to the sailor crisis. Wall Street opened a tad lower, ahead of non-farm payroll data.

UK: The FTSE 100 chalked up gains at mid-session as the Bank of England left interest rates unchanged at 5.25%. In more good news ahead of the Easter weekend, the British navy personnel arrived at Heathrow after they were released by Iran yesterday. Locally, the CVC-led group is planning to approach Sainsbury's (-0.53%) board with a £9.50 billion indicative offer, despite having failed to reach an agreement with the retailer's pension trustees, according to The Times.

However, KKR - which is also bidding for Alliance Boots (unch.) - has pulled out of the CVC group due to competition and price concerns. Mobile giant Vodafone (VOD) (-0.51%) has admitted that Indian law prevents it from owning all of the 67% shareholding in Hutch Essar, the FT reports.

BAE Systems (+0.33%) has confirmed that 'support services' were paid for and provided to senior Saudi government members as part of the al-Yamamah arms deal, the Financial Times reported. British Land (+0.84%) has won the contract to rebuild London's Euston station. In broker action: Old Mutual (+2.64%) gained on a Citigroup upgrade to buy, while Intercontinental Hotels (IHG) (+1.10%) gained on a JP Morgan target upgrade.

France: The CAC 40 index (-0.08%) remained in the red at mid-session, dragged down by Arcelor Mittal (-1.11%) and EDF (-1.56%). The latter faced news that the French Court of Accounts said the workers' committee of EDF, which gets 1% of annual sales of electricity and gas, 'totally lacks transparency', according to Les Echos. France Telecom (FTE) (-0.44%) and Spain's Telefonica (TEF) are each considering making an offer for Olimpia, the holding company that controls Telecom Italia (TI), WSJ reported, citing people close to the situation.

Infogrames (+19.05%) surged as Patrick Leleu is named chairman and CEO. EADS's (+1.34%) Airbus plans to complete partnership deals for three of its factories by the middle of July as part of its restructuring plan, AFP reported. The company said Latecoere (-1.78%) is a potential buyer of Airbus's Meaulte plant in northern France. Renault (+1.36%) sold €500 million of bonds maturing in five years.

Elsewhere, the possibility of a merger between Safran (+5.67%) and Thales (+0.52) has resurfaced, according to Le Figaro. Areva (+4.52%) gained on news that two Russian-built nuclear power plants in eastern China are delaying commercial operation by about half a year, following months of safety checks and repairs at one faulty unit.

Germany: The Xetra-Dax index (+0.1%) remained flat, with Wall Street looking set to open on a similar note. Volumes were low ahead of the long Easter break. In local corporate news, M&A is on the agenda: Puma (+6.53%) jumped on bid rumors. In the past Nike (NKE) has been mentioned as a possible suitor. Magna International and Blackstone-Centerbridge have submitted bids for DCX's (DCX) (-1.28%) Chrysler unit, reported Bloomberg, citing people familiar with the negotiations.

Karstadt's (+0.21%) Thomas Cook is in talks with Lufthansa (-0.23%) about taking full control of charter carrier Condor earlier than planned, according to Sueddeutsche Zeitung. The company said that after the deal is done, Thomas Cook wants to sell Condor to Air Berlin (+4.18). Siemens (SI) (+1.11%) said that Johannes Feldmayer, who was detained last week in one of a series of corruption investigations, has been released on bail, The Times reported.

Deutsche Telekom's (DT) (-0.77%) second round of talks with unions over plans to move 50,000 staff to three new service units ended without progress and will resume next week. Bilfinger (-0.77%) has been awarded a contract to design, build and, over a 30-year period, operate a justice and civic centre in Wiesbaden, Germany. On the broker front, UBS upped Kloeckner's (+3.11%) target to €46.50 from €44.00, buy.

Elsewhere: Spanish equity markets turned a touch lower at midday as in Amsterdam the AEX index remained slightly in the red.

Claudia Perotti, Lydia Carroll, Sara Oscarsson, Isabell Witt, Michael Sanderson, Gaurav Panchal, Julien Manrique, John West, Ben Marino, Emma Stevenson, Pawan Girglani.

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