European shares buoyed by merger hopes
EDINBURGH May 27 (Reuters) - European shares edged higher on Tuesday, supported by hopes for more mergers and acquisitions activity that helped UK shares outperform mainland Europe.
Intercontinental Hotels Group jumped 5.2 percent, the top performer on the pan-European FTSEurofirst 300, buoyed by British media reports of bid interest from the United States.
The FTSEurofirst 300 was up 0.1 percent to 1,377.99 at 0713 GMT.
UK shares gained 0.3 percent, ahead of bourses in the rest of Europe, following a public holiday on Monday when they missed out on the strong rise in European equities.
On Monday, Germany's DAX hit a record high and the euro zone Euro STOXX 50 hit a new 5-1/2 year peak as showings by pro-European forces in Germany and Italy provided an antidote to Eurosceptic gains in France, the UK and Greece.
However the UK market also saw Europe's biggest faller, with pharmaceutical firm AstraZeneca dropping 1.7 percent after Pfizer walked away from a proposed takeover.
Although the news was widely anticipated, analysts at Societe Generale downgraded AstraZeneca to "sell" from "hold" and slashed their target price on the stock by over 10 pounds, saying investors had not yet priced in the challenges facing an independent AstraZeneca. (Reporting by Alistair Smout; Editing by Lionel Laurent)