European insurance sector up on M&A rumors
New mergers and acquisitions rumors helped send the FTSE Eurofirst 300 higher on Thursday. The index added 0.5 percent to 1,447.86.
In the insurance sector, Swiss Life was 2.1 percent higher to SFr306 after it was rumored that Generali of Italy and Allianz of Germany might be ready to enter a bidding war over the Swiss insurer. Allianz was 0.7 percent higher to €149.61, while Generali, also a possible takeover target, gained 4 percent to €34.55.
French-Spanish tobacco group Altadis was up 7 percent to €40.37 after the confirmation of a bid for the UK company Gallaher raised hopes of more consolidation in the sector. JP Morgan commented that Altadis was a much more attractive target than Gallaher.
In the steel sector, ThyssenKrupp added 3.7 percent to €31.86 on positive broker comments. Deutsche Bank raised the steel maker’s target share price from €35 to €36, while West LB upped its target price from €32 to €34 and Commerzbank raised its earnings estimate for the 2006-2007 fiscal year by 16 percent.
Among telecommunications companies, Alcatel-Lucent gained 2.6 percent to €10.30 upon being added to Goldman Sachs’ “conviction buy” list. On the other hand, Dresdner Kleinwort retained its “sell” rating and target share price of €8, noting that Alcatel-Lucent isn’t a major manufacturer of mobile devices, unlike its rivals, Nokia and Ericsson.