Sentiment was lifted by M&A news and strength on Wall Street
The FTSE 100 trades higher on M&A activity. However, there is caution ahead of the US non-farm payrolls today, which are expected to be notably weaker m/m. Wall Street is seen opening higher on reports of a Microsoft approach for Yahoo. Oil is steady at US$63.13/bbl as fears over a disruption in supplies in the Niger Delta region ease. In M&A news, the mining sector lights up after Merrill Lynch says that BHP Billiton (+2.58%), Rio Tinto (+3.32%) and Anglo American (+2.85%) could become private equity bid targets. Moving to the media sector, Reuters (+23.77%) is the top percentage gainer after it confirms that it has received a bid approach. Canada's Thomson or News Corp. are being seen as possible bidders.
In the banking sector, ABN Amro is to meet the Royal Bank of Scotland (-1.12%) consortium today. Yesterday, a Dutch court ruled that ABN must freeze its US$21 billion sale of LaSalle to Bank of America. Also, Hanson (+5.56%) is in focus after Germany's largest cement maker in late trade yesterday confirmed that it may make an offer for the British building materials company. More sweet music for investors as EMI (+9.45%) confirms it has received a number of preliminary indications of interest. In earnings news: gas producer BG (-0.53%) posts a 20% fall in net profit, before one-offs.
Xetra-Dax (+0.3%) trades above breakeven midsession Friday, with M&A talk driving much of Europe's equities action. Locally, Deutsche Boerse (-1.39%), which tabled a 17% rise in EBITA to €300.3 million, is understood to be interested in buying a stake in ICAP. Heidelzement (-0.25%) remains in the frame on its interest in Hanson. It is seen bidding £11.50 per share for the UK sand and gravel supplier. On the earnings front, Munich Re (-1.2%) reported estimates-exceeding first quarter net income before minorities of €982 million on quarterly gross written premiums of €10 billion, a touch lower than expected. It expects EPS to grow by more than 10% on average from 2007-10, and plans more share buy-backs with a volume of over €3 billion up to 2010.
Linde (+0.68%) posted first quarter operating profit of €569 million on quarterly revenues of €2.86 billion, and confirmed its outlook for 2007. Solar World's (+0.94%) first quarter EBIT rose 31% year-over-year to €35.1 million on quarterly sales up 60% at €132.8 million. Earnings news aside, Allianz (+0.69%) plans to sell properties worth €3.5 billion and reinvest the proceeds in real-estate abroad. Siemens' (-1.23%) networks j/v with Nokia aims to cut 9,000 jobs by the end of 2010 in order to reach annual savings of €1.5 billion. Altana (-57.43%) slumps as its stock goes ex-dividend. The pharma is paying a special dividend of €33 per share from the sale of its drugs unit. Deutsche Telekom (-4.48%) trades ex-dividend of €0.72 per share. E.On (-3.07%) trades ex-dividend of €3.35.
The CAC 40 (0.37%) trades in the black at midsession, with Wall Street set for a higher open on an M&A buzz fuelled by talk of Microsoft potentially bidding for Yahoo! In major results news, back home Vallourec (+4.86%) has posted first quarter sales of €1.453 billion, up 10.3% vs consensus of €1.4 billion, confirming it should record sales growth of around 7-10% in 2007. Pernod Ricard (+1.72%) posts third quarter sales of €1.391 billion, up 6.8%, comfortably above consensus of c.€1.332 billion. Confirms net profit growth of nearly 20% over the full year. Eiffage (+2.32%) posts first quarter sales of €2.7 billion, up 24.2%. Weighing heaviest on the blue chip index, however, Total (-0.74%) erases 5.4 index points as it reports first quarter adjusted net income of €3 billion vs. €3.38 billion in first quarter of 2006.
In other news, traders note bid rumour for Soitec (+4.02%) at €25 per share. Three days ago revived rumours had it Intel is interested in Soitec. Arcelor Mittal (+1.33%) benefits from a Citigroup target increase to €50, with the broker keeping its buy recommendation. Michelin (+1.25%) plans to increase prices for two tyre categories in the US and Canada. Vinci's (+0.95%) Apion Kleos consortium has been announced preferred bidder by the Greek government for the country's biggest motorway concession project. Casino (-0.15%) lifts its stake in Exito, a Colombian retail chain, to 61.44%.