Finance Markets

October 9, 2006

MAN could drop hostile bid for Scania

Permalink: MAN could drop hostile bid for Scania

Filed under: Equities, Economy, Europe

European equities markets seemed little bothered Monday by North Korea’s announcement that it had tested a nuclear device. The FTSE Eurofirst 300 added 0.2 percent to 1,414.38.

Part of the gains on the day came from advances in the oil and mining sectors as prices for crude oil and metals were up after the North Korean news. In the UK, the mining sector added 3.3 percent as a whole. Among European oil companies, Total advanced 1.2 percent to €51.90, while Neste Oil was 1.9 percent higher to €22.60 and OMV added 3.1 percent to €39.28.

The MAN/Scania story continued to unfold. MAN said that it was thinking about discontinuing its hostile bid for Scania in favor of talks between those two companies and Scania’s largest shareholder, Volkswagen, after VW bought 15 percent of MAN last week. MAN added 0.9 percent to €68.45 on its announcement. Meanwhile, VW dropped 0.4 percent to €69.31, Investor B shares fell 2.2 percent to SKr154.50 and Scania B shares fell 4.4 percent to SKr443. Scania B shares were suspended from trade for a time during the session.

Elsewhere in the automobile manufacturing sector, Renault dropped 0.2 percent to €89.95 after GM shareholder Kirk Kerkorian said he would not buy any more GM stock, signaling an end to the possibility that Renault, Nissan, and GM might form some sort of cooperative relationship. Kerkorian had been an advocate of such a deal. Peugeot, meanwhile, fell 0.6 percent to €42.92 on a downgrade and lowered target share price from Morgan Stanley. The broker reduced its reccomendation on the carmaker from “overweight” to equal-weight” and dropped its target from €53 to €41.

In the telecommunications sector, TeliaSonera added 2.3 percent to SKr49.20 on the news that investment fund Cevian Capital had bought 72 million shares in the telecom, an acquisition that gives the fund a 1.6 percent stake in the company, making it TeliaSonera’s fourth-largest shareholder.

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