May 2 (Bloomberg) -- European stocks gained after British Sky Broadcasting Group Plc and Novo Nordisk A/S reported earnings that topped analysts' estimates and News Corp.'s bid for Dow Jones & Co. fueled speculation of takeovers among publishers.

``A positive earnings season will keep underpinning equities along with the fact that mergers and acquisitions continue to show a bullish trend,'' said Henk Potts, who helps oversee $45 billion at Barclays Stockbrokers in London.

BSkyB, the U.K.'s biggest pay-television company, climbed the most in more than four years. Novo Nordisk, the world's largest maker of insulin, reached a record high. Lagardere SCA and RCS MediaGroup SpA led a rally by media companies.

Of the 19 Dow Jones Stoxx 50 Index companies that have reported their latest first-quarter earnings, 13 beat forecasts, according to data compiled by Bloomberg. Corporate profits in Europe may rise about 5 percent in 2007, a fifth consecutive annual increase, according to estimates compiled by FactSet Research Systems Inc. in London.

Deals in Europe have totaled $949.5 billion this year, based on Bloomberg data. Mergers reached a record $1.6 trillion in 2006.

The Stoxx 600 added 0.4 percent to 388.64. The index is trading less than 1 point short of its April 20 close, when it finished at the highest since September 2000. The Stoxx 50 also advanced 0.4 percent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, rose 0.5 percent.

Man Group Plc and Beiersdorf AG paced gains by companies whose revenue depends on the U.S. after a report showed orders placed with factories rose more than forecast in March, signaling corporate spending is recovering.

National Markets

National benchmarks increased in all 18 western European markets except Austria, Portugal and Sweden. The U.K.'s FTSE added 1 percent, and Germany's DAX gained 0.6 percent. France's CAC 40 increased 0.5 percent. The U.K., Ireland and Denmark were the only markets in western Europe that were open yesterday. The rest were closed for Labor Day.

BSkyB climbed 5.5 percent to 616.5 pence, leading gains in the Stoxx 600. The company said fiscal third-quarter profit fell 6 percent to 142 million pounds ($284 million) as costs to start a broadband Internet service hurt earnings. That beat the 132 million-pound estimate in a Bloomberg survey.

Novo Nordisk jumped 7.6 percent to 579 kroner. The company said first-quarter profit climbed 41 percent to 1.71 billion kroner ($312 million) on rising sales of new versions of injectable insulin. Profit exceeded the 1.63 billion-kroner forecast of 23 analysts surveyed by SME Direkt. Sales at the Danish company climbed 10 percent.

Beating Estimates

Continental AG advanced 3 percent to 105.52 euros. The world's fourth-largest tiremaker said first-quarter profit rose 22 percent to 270.5 million euros as sales of car electronics and high-performance tires increased. Analysts surveyed by Bloomberg had expected net income of 240 million euros.

Lagardere, France's largest publisher, gained 2.5 percent to 59.36 euros. RCS, owner of Italy's biggest daily, advanced 1.8 percent to 4.03 euros. Wolters Kluwer NV, Europe's largest tax and legal publisher, added 2.8 percent to 22.39 euros.

Rupert Murdoch's News Corp. yesterday offered $60 a share for Dow Jones of the U.S., owner of the Wall Street Journal, Barron's and Dow Jones Newswires. The bid, 65 percent above the previous day's close, was rejected by Bancroft family members who control more than 50 percent of the voting power at the New York- based publisher.

``There could be a move to consolidate'' in the media sector, said Stephen Pope, head of equities research at Cantor Fitzgerald Europe in London. ``You are going to see some companies will fall by the way and some will be snapped up.''

Bloomberg competes with Dow Jones in providing financial news and information.

Manufacturing Rebound

Man Group gained 3.7 percent to 581 pence. The London-based hedge fund company made 62 percent of its revenue in the Americas last year. Beiersdorf, a German skin care company that derived 21 percent of sales from North America in 2006, gained 2.5 percent to 54.40 euros.

U.S. factory orders climbed 3.1 percent, compared with a 2.2 percent increase expected by economists in a Bloomberg survey.

``We are seeing a kind of rebound in the U.S. manufacturing sector,'' said Thierry Lacraz, a private-banking investment adviser with Pictet & Cie. in Geneva, which manages the equivalent of $191 billion. ``It's good for European companies that are oriented toward U.S. markets.''

Bank of Ireland, Altana

Shares of Bank of Ireland Plc rallied 3.8 percent to 16.45 euros on speculation U.K. mortgage lender HBOS Plc may bid for the nation's biggest bank by assets. HBOS rose 1.1 percent to 1087 pence.

``There is a rumor that HBOS may bid for Bank of Ireland,'' said Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England.

Anne Mathews, a spokeswoman for Bank of Ireland in Dublin, and HBOS spokesman Shane O'Riordain said their banks don't comment on speculation.

Altana AG fell 4.9 percent to 51.82 euros before a dividend payment. The company plans to pay a 50-cent bonus and 33 euros following the 4.5 billion-euro sale of its pharmaceutical unit to Nycomed Holding AS in December. Banks don't have to pay taxes on dividends according to German tax laws, while private investors have to pay taxes on half of the amount.

Syngenta AG, the world's biggest maker of agricultural chemicals, dropped 4.3 percent to 231 francs after saying corn acreage in the U.S. this season may fall short of government expectations because wet weather has delayed the start of the sowing season.

Credit Suisse, UBS

Credit Suisse Group, Switzerland's second-largest bank, declined 0.5 percent to 95 francs. First-quarter pretax earnings at the investment bank division rose to 2 billion francs ($1.64 billion) from 1.56 billion francs a year earlier.

``I'm a bit disappointed with the investment bank'' earnings, said Dirk Becker, an analyst at Kepler Equities in Frankfurt who has a ``buy'' recommendation on the shares. ``In this market they should have been higher.''

UBS AG, Europe's largest bank assets, fell 0.8 percent to 78.55 francs. The bank reports earnings tomorrow.

TeliaSonera AB fell 5.9 percent to 51.5 kronor. The Swedish government said it will sell a stake valued at about 19.7 billion kronor ($2.9 billion) in the biggest Nordic phone company to institutional investors as part of a plan to cede state holdings and reduce debt.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

Last Updated: May 2, 2007 12:16 EDT