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February 6, 2006    

Takeover bids, rumors boost European markets

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by Elaine Frei

Takeover bids, rumors boost European markets

In Europe on Monday, the FTSE Eurofirst 300 finished the day up 0.1 percent at 1,321.65, largely on activity within the banking sector.

BNP Paribas initiated a takeover bid for Banca Nazionale del Lavoro, Italy’s sixth largest bank. The bid, worth €9 billion, spurred large gains in the Italian banking sector. Capitalia was up 7.6 percent to €5.74. Banca Popolare di Milano gained 6.9 percent to €10.57. Mediobanca advanced 4 percent to €16.24. Banca Intesa was up 3.3 percent to €4.90. BNL, however, fell 2.4 percent to €2.89.

In other fallout from the announcement from BNP, BBVA lost 1.2 percent to €16.22. BBVA will sell its 14.9 percent stake in BNL as part of the deal. Elsewhere in the banking sector, Societe Generale gained 0.5 percent on the day to €109.90, but Credit Agricole fell 0.1 percent to €29.05.

Takeover rumors also affected the oil sector as Repsol gained 4.2 percent to €23.18 on reports out of Spain that BP and Italian oil company Eni are thinking about entering takeover bids for Repsol, which is seen as vulnerable after the expiration of Spanish government protection of the company from hostile takeover. Eni gained 0.8 percent on the day to €24.60. Elsewhere in the oil sector, Austrian company OMV gained 6.4 percent, while Norwegian firms Statoil and Norsk Hydro were both up. Statoil gained 3.4 percent to NKr184.00 while Norsk Hydro advanced 1.9 percent to NKr815.00.

In the biotech sector, Swiss company Serono posted disappointing profits and revenues growth in the fourth quarter, opening it to takeover speculation and sending the company’s shares down 0.1 percent on the day to SFr958.50. GlaxoSmithKline has been seen as a likely party to attempt a takeover, but it has been reported to be unwilling to pay what analysts say would be an adequate per-share price. Other possible bidders for Serono are thought to be Novartis and Johnson & Johnson.

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