Linde Acquires Lincare for $4.6 B, European Markets Advance

Arthi Gupta
02 Jul, 2012
New York City

The European indexes gained for the second day and jobless rate rose in May and UK home prices stagnated in June. Linde agreed to acquire U.S.-based Lincare for $4.6 billion and Essar Energy agreed to sell stake in Vietnam gas block to ENI.

[R]2:20 PM Frankfurt – The European indexes gained for the second day and jobless rate rose in May and UK home prices stagnated in June. Linde agreed to acquire U.S.-based Lincare for $4.6 billion and Essar Energy agreed to sell stake in Vietnam gas block to ENI.[/R]

European markets extended Friday’s gains on the optimism after regional leaders took emergency steps and offered direct lending to banks easing stress in the sovereign bond markets of Spain and Italy.

However, analysts are cautious and investors are looking for details of the new bank lending rules and the plans for the launch of regional banking authority.

French economic growth estimated to weaken in 2012 and 2013. Mixed manufacturing activity was reported in the euro area with the German PMI falling to a three-year low in June.

The French economic growth is estimated to be weaker in 2012 and 2013, Finance Minister Pierre Moscovici told Figaro newspaper in an interview.

Moscovici said the economic growth may reach around 0.4% in 2012 and an expansion within 1% to 1.3% appears ""more credible"" in 2013.

In Paris trading, the CAC-40 Index gained 35.63 or 1.1% to 3,232.28 and in Frankfurt the DAX Index edged higher 61.49 or 1% to 6,478.22.

The yield on 10-year bonds of Spain dropped 10 basis points to 6.185% and Italian bonds declined nine basis points to 5.70%.

Euro-zone Jobless Rate Rises

The euro-zone unemployment rate rose to a record 11.1% in May from 11% in April, Eurostat said today.

The number of unemployed increased 88,000 in May from the previous month and on a yearly basis, unemployment surged by 1.82 million.

The unemployment rate in the larger region of EU27 was 10.3% in May compared to 10.2% in April with Spain reporting the highest jobless rate of 24.6% followed by Greece with 21.9%.

Euro Area, German, French PMI Data

The Eurozone Purchasing Managers'' Index for the manufacturing sector remained unchanged in June from the prior month, final data from Markit Economics showed.

The index was flat at 45.1 in June but above the flash reading of 44.8.

The final seasonally adjusted Markit/BME Germany Purchasing Managers'' Index fell to 45.0 in June from 45.2 in May, its lowest reading for three years, results of survey by Markit Economics showed today.

Separately, the seasonally adjusted purchasing managers'' index for the French manufacturing sector dipped to 45.2 in June, lower than 45.3 in the flash estimates.

UK Home Prices Flat, PMI Climbs

Home prices in the UK remained unchanged in June compared to the previous month, the latest survey by Hometrack showed.

The number of first time home buyers fell 0.5% in June, marking the first drop in five months.

Price growth in London remained stable at 0.3%.

Separately, a survey by Markit Economics showed that the purchasing managers'' index for the UK manufacturing sector rose to 48.6 in June from 45.9 in May.

Linde to Acquire Lincare

German industrial gases producer Linde AG agreed to acquire Lincare Holdings, Inc., the U.S- based homecare provider for $41.50 per share, a 22% premium to the closing price on June 29.

The $4.6 billion transaction is expected to close in third quarter of fiscal 2012 and Lincare had 2011 revenues of $1.8 billion.

Heritage Acquires Interest in OML 30

Heritage Oil Plc agreed to buy a 45% participating interest in a Nigerian producing oil mining lease, known as OML 30 from Royal Dutch Shell, Total and ENI for $850 million. The remaining 55% participating interest is held by the Nigerian National Petroleum Corporation.

The acquisition provides Heritage with exposure to Nigeria, the second largest proven reserves in Africa and growth opportunities in a prolific hydrocarbon region.

Gainers & Losers

Bankia SA fell 0.9% to €0.9160 after the Spain-based financial institution plans to reduce €30 billion in property assets by 2015.

Barclays Plc soared 5.3% to 171.40 pence after the financial services provider announced the resignation of its Chairman, Marcus Agius. The bank was fined £290 million last week for admitting to attempting to manipulate the reference rate used by trillions of dollars of international contracts, Libor.

Essar Energy plc rose 3.3% to 126 pence after the India-focused integrated energy company’s subsidiary agreed to sell a 50% stake in Vietnam’s offshore gas exploration block 114 to ENI International B.V.

GlaxoSmithKline Plc climbed 1.3% to $45.57 after the healthcare group extended its tender offer to acquire Human Genome Sciences to July 20.

Rhoen-Klinikum AG plunged 12.5% to €16.57 after the health care services provider said the takeover offer from Fresenius SE only attracted 84.3% of shareholder vote.