Euroshares close higher, logging solid weekly gain; M&A, telecoms drive gains

Euroshares close higher, logging solid weekly gain; M&A, telecoms drive gains

	Published : Sun, 14 Oct 2007 20:53 By : Agencies Print this Story

LONDON (Thomson Financial) - Leading European shares ended slightly higher to cap a positive week for the market as merger and acquisition talk drove gains and the telecom sector outperformed, helped by an upbeat outlook from Spain's Telefonica.

The Dow Jones STOXX 50 rose 9.59 points, or 0.2 pct, to an unofficial close of 3,932.44 while the STOXX 600 edged up 0.20 point or 0.05 pct to 390.63.

On the week, the STOXX 50 rose about 0.7 pct while the STOXX 600 gained 1 pct.

'It's been quite a positive week. We have seen some good news out of the telecom sector, with Telefonica's update,' said Henk Potts, equity strategist at Barclays Global, noting that the sector is increasingly benefiting from a less aggressive regulatory framework for mobile communications.

'The market will also be pleased that the world of M&A, which has gone through some tough times in the last couple of months, is showing signs of life again.'

Friday's trading session proved a case in point, with a number of corporate takeover deals doing the rounds.

Shares in SAP rose 1.5 pct on expectations the German software maker would be unlikely to face a counter-bid to its 42 eur a share offer for France's Business Objects after Oracle, which had been talked up as a possible rival bidder, launched a 6.7 bln usd takeover offer for US peer Bea Systems.

SAP's bid for Business Objects had already been described as expensive by some analysts. Business Objects ended the session, down 0.4 pct.

Back in the UK, Northern Rock shares rose 5.9 pct after Virgin Group, the travel and telecoms group led by celebrity entrepreneur Sir Richard Branson, confirmed it is planning a takeover of the ailing UK mortgage bank as part of a consortium of US and Asian investors.

Lone Star, Apollo, Blackstone and JC Flowers are just some of the other private-equity groups rumoured to be interested in Northern Rock.

Telefonica climbed 4.2 pct to hit a fresh seven-year high as the Spanish telecom operator's upbeat guidance yesterday prompted Citigroup to upgrade the company to 'buy' from 'hold' and lift its price target to 26.50 eur from 19 eur.

Mark.cotton@thomson.com

mc1/slj

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