European Stocks Advance for a Fourth Week on DealmakingCorinne Gretler
European stocks rose for a fourth week as companies from Scania AB to Dixons Retail Plc rallied amid a resurgence in mergers-and-acquisitions activity.
Scania soared 34 percent after Volkswagen AG offered to buy the remaining stake in the Swedish truckmaker for 6.7 billion euros ($9.3 billion). Dixons rose 9 percent as the largest U.K. consumer-electronics retailer said it has started talks to merge with Carphone Warehouse Group Plc. Royal Bank of Scotland Group Plc slumped 8.9 percent after posting the largest full-year loss since it received a bailout in 2008.
The Stoxx Europe 600 Index rose 0.6 percent to 338.02 this week as it completed the longest stretch of weekly gains since November. The benchmark declined as much as 1 percent on Feb. 27 as tension escalated in the Ukrainian region of Crimea following the removal of the country’s president. European equities jumped 4.8 percent in February, their biggest monthly rally since July.
“The resurgence of mega M&A deals have kept the index afloat this week and given a boost to market participants’ confidence,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “On the other hand, certain question marks, such as some negative news from bigger companies and the tensions between Russia and the Ukraine are still worrying.”
Ukraine’s acting president, Oleksandr Turchynov, said that Russian soldiers had contributed to the rising tension in Crimea. Armed men wearing uniforms without Russian markings arrived at the main airport in Simferopol overnight. Crimean lawmakers agreed to hold a referendum on the territorial status of the peninsula on May 25.
The European Commission raised its forecast for 2014 economic growth in the euro zone to 1.2 percent. It had predicted that the 18-nation currency bloc’s gross domestic product would expand 1.1 percent this year.
Scania surged 34 percent. Volkswagen, which controls a majority of the truckmaker’s shares and 89.2 percent of its voting rights, said late on Feb. 21 that it has offered 200 kronor per share for the remaining stock. Germany’s largest carmaker dropped 5.9 percent this week.
Dixons Retail rose 9 percent. A merger with Carphone Warehouse, a mobile-phone retailer, would unite businesses with combined revenue of about 12 billion pounds ($20 billion). The discussions have only reached a preliminary stage, the companies said on Feb. 24. Carphone Warehouse rallied 15 percent.
Man Group Plc jumped 24 percent after the world’s largest publicly traded hedge-fund firm announced a $115 million stock buyback and said clients made net contribution to its funds for a second consecutive quarter.
Jupiter Fund Management Plc surged 10 percent. The money manager increased its full-year dividend by 43 percent to 12.6 pence from 8.8 pence a share. That beat the 12 pence payout that Peter K. Lenardos, an analyst at RBC Capital Markets, had predicted. Jupiter also said assets under management rose to 31.7 billion pounds in 2013 from 26.3 billion pounds in 2012.
Vodafone Group Plc gained 3.5 percent. The mobile-phone operator’s shares traded on Feb. 24 after adjusting for the cash distribution and share consolidation resulting from the sale of its joint venture with Verizon Communications Inc.
The company said it would give its shareholders 29.53 pence a share in cash and six new shares for every 11 they held. The telecommunications operator also said it would distribute about 263 Verizon shares for every 10,000 Vodafone shares owned.
RBS slumped 8.9 percent, its biggest drop since June. The state-owned lender’s net loss widened to about 9 billion pounds in 2013 from 6.1 billion pounds in 2012 as it took more than 12 billion pounds in charges for impairments, customer redress and legal costs.
Fresenius Medical Care AG dropped 4.8 percent after the world’s biggest provider of kidney dialysis forecast profit that fell short of analysts’ estimates. The company projected net income of $1 billion to $1.05 billion this year, less than the $1.19 billion that analysts had predicted. Its parent company Fresenius SE slid 5.4 percent.
PostNL NV plunged 19 percent, the biggest weekly slump since United Parcel Service Inc. dropped a bid for the company’s holding in TNT Express NV in January 2013. The largest Dutch postal operator posted a net loss of 170 million euros ($235 million) for last year and cut its 2015 operating profit forecast by 40 million euros, citing pricing pressure in its package-delivery operations.
National benchmark indexes advanced in 13 of the 18 western-European markets this week. France’s CAC 40 added 0.6 percent and Germany’s DAX gained 0.4 percent. The U.K.’s FTSE 100 dropped 0.4 percent.