European Stocks Advance as Telekom Austria Rallies on M&A
European stocks rose, rebounding from yesterday’s loss, as companies from Alstom SA (ALO) to Telekom Austria AG rallied on mergers-and-acquisitions activity, while Russia resumed military drills along its border with Ukraine.
Alstom climbed 11 percent after people familiar with the matter said General Electric Co. has held talks to buy the French train maker. Telekom Austria jumped 6.3 percent after America Movil SAB said it will buy out the company’s minority shareholders. Technip SA added 8.8 percent after posting profit that beat projections. Konecranes Oyj slid 3.5 percent after reporting first-quarter sales that missed analysts’ estimates.
The Stoxx Europe 600 Index added 0.3 percent to 336.13 at the close of trading after rallying as much as 0.8 percent and sliding as much as 0.5 percent. The benchmark fell yesterday for the first time in four days as new-house sales in the U.S. unexpectedly plunged. The gauge remains 0.9 percent away from the six-year high it reached on April 4.
“The Ukraine situation is certainly raising caution,” said Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva. “You can’t be completely serene when there are geopolitical tensions like these. We are in the midst of the earnings and they look good. M&A is on the rise. Ukraine is a serious topic, but should not be overstated as long as there’s no real escalation, which I think is not on the cards yet.”
European equities briefly declined as the Interfax news agency reported that the drills will include airplanes and troops along Russia’s border with Ukraine. Interfax cited Russian Defense Minister Sergei Shoigu.
National benchmark indexes climbed in 11 of the 17 western-European markets that opened today. Iceland’s market closed as the country held a public holiday to celebrate the first day of summer. The U.K.’s FTSE 100 and France’s CAC 40 climbed 0.4 percent and 0.6 percent, respectively. Stocks in Germany -- Russia’s largest European trading partner -- rose 0.1 percent.
Alstom climbed 11 percent to 27 euros after a person familiar with the matter said GE may offer more than $13 billion for the builder of trains and power plants. The companies may announce an agreement as early as next week, the people said.
The developer of wind farms said it does not know of any bid for the company. The shares pared a rally of as much as 18 percent after Le Figaro reported that GE is only interested in buying Alstom’s energy assets. Bouygues SA, which owns 29 percent of the shares according to data compiled by Bloomberg, climbed 4.6 percent to 30.35 euros.
Telekom Austria climbed 6.3 percent to 7.07 euros after America Movil said it will offer 7.15 euros apiece for the outstanding shares in Telekom Austria, a 7.5 percent premium to yesterday’s closing price. The Mexican mobile-phone operator signed an agreement with state-holding company OeIAG, giving the pair control over the telecommunications company.
Technip rallied 8.8 percent to 83.25 euros after Europe’s largest oilfield-services provider by market value reported first-quarter net income of 67.2 million euros, exceeding the 62.4 million-euro projection of analysts surveyed by Bloomberg. The chief executive officer said the company has won major contracts in Angola, Brazil and Indonesia.
Scania AB surged 8.6 percent to 187.80 kronor, the biggest gain since Volkswagen offered in February to buy out the Swedish truckmaker’s minority shareholders. Swedbank Robur, which controls 1.87 percent of Scania (SCVB), said it would accept the offer of 200 kronor a share. Investors holding a 5.8 percent stake have rejected the proposed price. Volkswagen plans to pursue the bid only if acceptance reaches 90 percent, the threshold needed under Swedish law to force remaining owners to sell their holdings and delist the company.
Air Liquide SA gained 2.4 percent to 102.70 euros as the world’s second-largest supplier of industrial gases said sales rose 1 percent to 3.73 billion euros in the first three months of the year. Analysts had expected 3.75 billion euros. Chief Executive Officer Benoit Potier forecast that net income will grow in 2014.
Imagination Technologies Group Plc, which has a licensing agreement with Apple Inc., rose 7.4 percent to 197.4 pence after the maker of iPhones and iPads reported quarterly profit and sales that beat analysts’ estimates. Dialog Semiconductor Plc (DLG), which got 80 percent of its revenue from Apple last year, advanced 2.1 percent to 17.95 euros.
AstraZeneca Plc (AZN) advanced 3.3 percent to 4,175 pence after Chief Executive Officer Pascal Soriot said the company will seek partners for treatments that fall outside its core areas.
The U.K.’s second-biggest drugmaker has surged 10 percent in the last three days after the Sunday Times reported that Pfizer Inc. made a tentative approach about buying the company. Soriot declined to comment during the call. AstraZeneca reported first-quarter profit today that missed projections.
Konecranes dropped 3.5 percent to 22.05 euros after the Finnish maker of cranes posted first-quarter sales of 427 million euros, missing analysts’ forecasts of 472 million euros.
Michelin & Cie. lost 4.2 percent to 88.83 euros after Europe’s largest tiremaker said sales fell 2.4 percent to 4.76 billion euros in the first quarter as conflict between Russia and Ukraine weakened demand in eastern Europe.
In the U.S., a Commerce Department report showed durable-goods orders advanced 2.6 percent in March, more than the 2 percent median forecast of economists surveyed by Bloomberg News. The release showed orders increased a revised 2.1 percent in February.
To contact the reporter on this story: Namitha Jagadeesh in London at firstname.lastname@example.org
To contact the editors responsible for this story: Cecile Vannucci at email@example.com Will Hadfield