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A fresh round of M&A headlines helped lift markets Monday
London: The FTSE 100 closed comfortably higher Monday after bouncing back from last week's losses. The blue-chip index was supported by M&A activity and strength in banking and mining stocks. Wall Street was flat over interest rate woes. The pound was trading at US$1.9680 after in-line PPI data. Gold in Europe closed firm on bargain hunting. Copper and lead were higher on strike concerns and short-covering. Oil moves to US$65.21/bbl after OPEC said has no plans to raise supplies.
In company news, Atticus Capital, an activist hedge fund with a 1% stake, has asked Barclays (+1.59%) to drop its agreed bid for ABN Amro, the FT reported. Centrica (+1.88%) fired up after Gazprom was reportedly closing in on a deal to boost its market presence in the UK. However, the Russian firm denied Centrica was a target. Prudential (+1.04%) gained on rumours of Hermes building up a stake. JJB Sports (+3.41%) climbed after David Whelan's 29% stake sale. The market felt this left the sporting goods retailer vulnerable to a takeover.
The broker comments also added to the gains: investors cheered Enterprise Inns (+1.82%) after Deutsche said that if the firm were to get a nod to convert to a single company REIT, then the shares could bounce by £1.50/sh-£2.00/sh; Ryanair (+1.64%) flew after Citigroup said the sell-off has been overdone and reiterated buy. Among the fallers, Rexam (-3.32%) bought OI Plastics Products for US$1.83 billion.
Paris: The CAC 40 (+0.97%) closed in the black with Wall Street flattish. President Nicolas Sarkozy's ruling UMP party has taken a commanding lead from the first round of legislative elections.
In market news, according to The Times, SocGen (+1.72%) is engaged in an urgent search for another group to combine with to avoid being taken over. Last Friday, Les Echos reported that SocGen had mandated two investment banks to advise on a possible merger with BNP Paribas (+1.98%). However, Le Figaro this morning reported that BNP's management opposes the idea. The two banks added over 14 index points. Alcatel Lucent (+2.23%) CEO Patricia Russo emphasised in a CMD presentation that integration is 'on track'. The Business reported that BNP Paribas has been hired to examine a bid for Vallourec (+3.7%) - both Gazprom and Arcelor-Mittal (+2.35%) have been rumored to be studying a bid.
EADS (+1.79%) COO Jean-Paul Gut confirmed he will resign. Aeroflot is to order 22 of Airbus' A350 aircraft, reported La Tribune. In utility news, Suez (+0.84%) benefited from a Credit Suisse target increase to €46.50. Les Echos cited a report suggesting just 330-350 of EDF's (+0.5%) 27 million customers will change electricity supplier after liberalisation comes into force on July 1. In the wider market, Air France-KLM (+2.62%) CEO Jean-Cyril Spinetta said he expects further consolidation in the sector, Wirtschaftswoche wrote.
Frankfurt: Xetra-Dax closed firmly higher on Monday while Wall Street was trading sideways ahead of inflation data later in the week. US stocks had clocked up solid gains at the end of last week, after prior weakness, with shares in United States Steel, for instance, jumping as Russian news agency Interfax reported that ThyssenKrupp (+2.3%) is interested in buying the group. ThyssenKrupp, meanwhile, said it is not in talks with the US company, nor with Russia's Severstal, which was also speculated.
In other news, traders note market talk of HP building a stake in SAP (+1.41%). This followed recent speculation about Oracle buying more than 12% of the maker of business software. Allianz (+3.34%) is looking at ways to defend its position in financial services, including the option of merging with a bank, Reuters reported citing sources.
Merck (+0.15%) is buying a stake in Archemix. It will invest US$29.8 million in the US biotech group, expanding their alliance in developing therapeutics for treating cancer. Qiagen (+2.08%) wants to accelerate growth through its takeover of US rival Digene and aims for more than 15% annual organic growth.
Deutsche Telekom (-0.44%) could see demonstrations in Washington as the Communications Workers of America union is looking for intervention in an ongoing dispute.
Broker-wise, WestLB upgraded Colonia Real Estate (+2.08%) to buy, also lifting its earnings estimates for the group.