European Indexes Fall 1%; AXA and Citi in $1.7 Billion Deal

Arthi Gupta
08 Jun, 2011
New York City

The European indexes edged lower after comments from the U.S. Fed Chairman Ben Bernanke yesterday. AXA Private Equity agreed to acquire $1.7 billion buyout fund assets from Citigroup. Total sold Gassled stake to Silex Gas Norway for NOK 4.64 billion.

[R]2:00 PM Frankfurt – The European indexes edged lower after comments from the U.S. Fed Chairman Ben Bernanke yesterday. AXA Private Equity agreed to acquire $1.7 billion buyout fund assets from Citigroup. Total sold Gassled stake to Silex Gas Norway for NOK 4.64 billion.[/R]

World indexes retreated after comments from the U.S. Federal Reserve Chairman Ben Bernanke. Bernanke estimated economy to rebound in the second-half but he also highlighted uneven recovery and persistent weakness in the labor market.

“The economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed,” Bernanke said.

Bernanke also highlighted the recent surge in commodities prices but noted that the recent increases are transitory and have not spilled into the broader economy.

The euro-zone economy expanded 0.8% sequentially in the first quarter, following the 0.3% expansion in the fourth quarter of 2010, second estimates published by Eurostat showed today.

Germany''s trade surplus fell to €10.9 billion in April from €18.8 billion in March, the Federal Statistics Office said.

Greece''s unemployment rate advanced to 16.2% in March from February''s 15.9%, the Hellenic Statistics Authority said today. The jobless rate rose for the ninth month in a row in March. In March 2010, the jobless rate was 11.6%.

In Paris CAC-40 Index declined 41.98 or 1.08% to 3,829.94 and in Frankfurt DAX index edged lower 87.48 or 1.23% to 7,015.77.

AXA Acquires Citigroup’s Private Equity Portfolio

AXA Private Equity, the leading European diversified private equity firm, signed a Sale and Purchase Agreement with Citigroup for the acquisition of a $1.7 billion portfolio of limited partnership interests in private equity buyout funds and a portfolio of direct stakes in companies. The deal represents one of the largest ever secondary private equity transactions.

The portfolio sold by Citi Holdings comprises 207 limited partnership interests in mostly buyout and a number of investments that were made directly into certain companies.

Total Sells Gassled Stake to Silex Gas Norway

Total signed an agreement with Silex Gas Norway AS, a wholly owned unit of Allianz, to sell its entire stake in Gassled and related entities for a price of NOK 4.64 billion or around $870 million.

Gassled is a joint venture formed in 2003 to transport natural gas from fields on the Norwegian Continental Shelf to Continental Europe and the UK.

Gainers & Losers

BMW AG fell 1.39% to €59.48 after the automobile manufacturer said deliveries of BMW, MINI and Rolls-Royce brand vehicles rose 22.1% to 147,563 in May from 120,850 a year ago.

Deliveries for the year to the end of May climbed 20.7% to 667,511 vehicles from 552,866 a year ago.

Deutsche Boerse AG dipped 0.24% to €53.37 after the marketplace operator said it plan to pay a special one-time dividend of 2.00 euros per share after the closing of the merger with NYSE Euronext.

4 SC AG plunged 33.78% to €2.36 after the German biotechnology firm stated that its investigational drug vidofludimus failed to meet primary efficacy endpoint in a phase IIb clinical trial in rheumatoid arthritis patients.

Kabel Deutschland Holding AG slumped 6.18% to €41.71 after the cable operator reported fourth quarter revenue grew 5.3% to €407.75 million from €387.23 million in the prior year. Net loss for the quarter narrowed 99% to €152,000 from €16.61 million in the same quarter last year.

NYSE Euronext dropped 0.65% to $35.27 after the global operator of financial markets and provider of trading technologies said global derivatives average daily volume declined 20.6% to 10.6 million contracts in May, versus the prior year.

NYSE Euronext U.S. equity options average daily volume dropped 16.7% to 4 million contracts compared to May 2010 level.