Solvay Offers

Arjun Dave
04 Apr, 2011
New York City

European markets in a quiet trading focused on banks in Ireland, Italy and Portugal. Italian banks are expected to raise as much as 10 billion euros in the next two months ahead of banks stress tests. Vodafone agreed to sell its 44% stake in SFR to Vivendi and Solvay launched an offer for Rhodia.

[R]12:45 PM Frankfurt – European markets were generally quiet with focus on banks in Ireland, Italy, Portugal and Germany. Italian banks are expected to raise as much as 10 billion euros in the next two months ahead of banks stress tests. Vodafone agreed to sell its 44% stake in SFR to Vivendi and Solvay launched an offer for Rhodia.[/R]

Stocks in European markets edged higher on deal news and positive market currents in Asian trading.

Industrial producer price index increased 0.8% in February from January in both the euro area and in the wider region of EU27 nations. The measure of wholesale price increased 6.6% from a year ago by 6.6% after increasing 5.9% in January.

DAX 30 index in Frankfurt trading increased 12.41 to 7,192 and CAC 40 index in Paris eased 1.78 to 4,052.98. Italian benchmark index MIB was steady despite the banks extended their declines second week in a row.

Two separate private surveys showed an increase in UK activities.

Confederation of British Industry survey indicated financial services sector increased in the third quarter ending in March and around 33% participants said business volume increased and 11% said declined.

The latest survey of construction industry indicated that Markit/CIPS Construction Purchasing Managers’ index slipped to 56.4 in March and declined from the eight month high of 56.5 in January.

Stock Movers

Alstom SA increased 1.4% to 43.78 euros after the power plant equipment maker said the company is leading in a bidding process for a coal-fired power plant of 1 billion euros in Malaysia.

Rhodia soared 48.6% to 31.29 euros after it agreed to a deal with Belgium based Solvay for 31.60 euros a share. Solvay increased 2.6% in Brussels trading. The offer values the company at 3.4 billion euros.

Qiagen gained 0.6% after it announced a deal with Australia based Cellestis Limited for $350 million that will gain a control of its early tuberculosis detection diagnostic and monitoring technology.

Vivendi increased 0.8% to 20.67 euros after it agreed to acquire 44% stake in the second largest mobile company in France, SFR for 7.9 billion euros from the UK based Vodafone.

Vodafone increased 1% to 29.38 pence.

Italian banks were among the leading decliners in the region on the worries that more banks will have to raise capital ahead of bank stress test.

Intensa Sanpaolo SpA dropped as much as 1% but recovered a fractional gain to 2.12 euros ahead of its board meeting tomorrow that may lead to 5 billion euro capital offering.

Banca Monte dei Paschi di Siena SpA declined 2% to 87 euro cents on the media reports that the company may raise as much as 2 billion euros.

UniCredit SpA declined 0.5% and the bank chief confirmed in comments over the weekend that the bank is not looking to sell its German operations.

However, banks in Ireland increased for the second week after the release of the stress tests that will see the injection in banks of as much as $34 billion. Bank of Ireland increase 11% to 35 euro cents and Allied Irish Banks PLC increased 9.5%.