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Tuesday 15th of June 2010
September 20, 2006    

Eurofirst advances on M&A rumors

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by Elaine Frei

The FTSE Eurofirst 300 added 1.1 percent on Wednesday to close at 1,380.92 as several sectors were affected by mergers and acquisitions rumors.

In the retail sector, Ahold was said to be thinking about selling its US operations to Belgian retailer Delhaize. Hedge funds Paulson & Co and Centaurus Capital, which own 6.4 percent of Ahold between them, have been urging the company to sell their US division for some time. Ahold was 1.4 percent higher to €8.08 and Delhaize added 1.8 percent to €62.20.

French builder Eiffage gained 5 percent to €75.25 after it said it is in talks with Spanish company Sacyr Vallehermoso. It was unclear whether there was merger in the works or if Sacyr would attempt to purchase outright the portion of Eiffage that it does not already own. According to JP Morgan, however, it might cost Sacyr too much to buy the 68 percent of Eiffage’s shares that it doesn’t currently hold. At any rate, Sacyr added 2 percent to €31.42 on the news.

After admitting that it had been approached once and amid speculation that it could receive further inquiries, German tire maker Continental was 2.3 percent higher to €90.40. Dresdner Kleinwort said that the company was a good candidate for a leveraged buy-out, noting that any deal to do so would be the largest LBO in German history. Elsewhere in the sector, French rival Michelin added 1.2 percent to €55.35.

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