European Factors to Watch-Shares seen stabilising; focus on M&A

Tue Jun 17, 2014 2:19am EDT

EDINBURGH, June 17 (Reuters) - European stocks were set to rise for the
first session in a week on Tuesday, buoyed by merger activity, but geopolitical
tensions in Iraq and Ukraine were likely to keep investors wary of riskier
assets.
    At 0609 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were 0.2-0.4 percent
higher.
    Helping to support the market was merger and acquisition activity. Germany's
Siemens and Japan's Mitsubishi Heavy Industries presented a
joint offer to French turbine maker Alstom late on Monday that
included 7 billion euros ($9.5 billion) in cash. 
    "Siemens and MHI propose a complicated deal in which Siemens seems to be the
only clear winner in our view... It has the opportunity to consolidate its
existing service network with that of Alstom, with the potential to reap the
accompanying cost synergies," analysts at Barclays write in a note.
    "For Alstom, the proposal offers recapitalisation, but doesn't solve demand
issues, in our view. We continue to believe the GE deal is better for Alstom
shareholders."
    Siemens and Mitsubishi challenged a bid by General Electric who were
seeking to work with the French government on a deal. 
    The FTSEurofirst 300 index of top European shares shed 0.4 percent
to 1,383.95 points on Monday, retreating further from a 6-1/2 year high hit last
week, led lower by airlines as geopolitical concerns weighed on shares and the
conflict in Iraq drove oil prices higher. 
    The euro zone's blue-chip Euro STOXX 50 fell 0.7 percent to
3,261.42 points, with Asian shares also under pressure overnight after a dispute
between Ukraine and Russia over gas sapped investors' appetite for risk.
 
    
    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0612 GMT:
                                         LAST    PCT CHG      NET CHG
 S&P 500                             1,937.78     0.08 %         1.62
 NIKKEI                              14975.97     0.29 %        42.68
 MSCI ASIA EX-JP                       489.27    -0.31 %        -1.51
 EUR/USD                               1.3563    -0.07 %      -0.0010
 USD/JPY                               101.96     0.13 %       0.1300
 10-YR US TSY YLD                       2.590         --        -0.01
 10-YR BUND YLD                         1.354         --         0.00
 SPOT GOLD                          $1,264.80    -0.51 %       -$6.49
 US CRUDE                             $106.66    -0.22 %        -0.24
 
  
  > GLOBAL MARKETS-Asian shares soft on anxiety over Iraq, Ukraine   
 
  > US STOCKS-Wall St ends up slightly on M&A; Iraq watched        
  > Nikkei bounces, geopolitical concerns restrain buyers        
  > TREASURIES-Prices steady after solid data, buoyed by Iraq     
  > FOREX-Dollar edges up as market awaits Fed meeting, Iraq news    
  > PRECIOUS-Gold steady below 3-week top; Fed meeting eyed        
  > METALS-Copper climbs on China stimulus outlook             
  > Brent holds near $113 on Iraq supply concerns            
    
    COMPANY NEWS
    
    ALSTOM, SIEMENS 
    Siemens and Japan's Mitsubishi Heavy Industries presented a joint
offer to France's Alstom on Monday that included 7 billion euros ($9.5
billion) in cash, challenging a bid by General Electric. 
    Separately, General Electric wants to avoid a bidding war with Siemens and
Mitsubishi Heavy Industries over Alstom, but it is talking to the French
government about potentially changing non-price terms of the bid, a person close
to GE told Reuters. 
    Related news 
    
    SHIRE 
    London-listed drugmaker Shire has hired investment bank Citi 
as an adviser, expecting to receive takeover approaches following a wave of
deals in the healthcare sector, sources familiar with the matter told Reuters.
    
    TELEFONICA 
    Telefonica will win EU approval for its 8.6-billion-euro ($11.7
billion) bid for KPN's German unit E-Plus after agreeing to let smaller
rivals in Germany piggyback on its mobile network, two people with knowledge of
the matter said.
    
    AIRBUS 
    The Airbus A380, the world's largest jetliner, does not figure in the
current plans of Delta Air Lines Inc DAL.N, an executive at the carrier said on
Monday, citing the reliability and efficiency of smaller aircraft.
 
    
    ROYAL DUTCH SHELL 
    The oil major launched a long-anticipated sale of most of its stake in
Australia's Woodside Petroleum Ltd on Tuesday, looking to reap about
$5.7 billion as it moves to focus on developing its own gas assets in Australia.
 
    
    RSA INSURANCE GROUP LTD 
    Britain's largest non-life insurer is looking to sell its Asian operations
in an auction that could fetch up to $500 million and draw a wide range of
suitors, people familiar with the sale process told Reuters. 
    
    UK BANKS 
    Exempting Britain's banks from planned European Union rules to curb risky
trading would be illegal, the bloc's lawyers said on Monday in a legal opinion
that marks another setback for UK attempts to limit Brussels' influence on the
City. 
    
    ADP 
    The number of passengers passing through Paris' main airports rose 1.7
percent year-on-year in May to 8.1 million, ADP ADP.PA said. 
    
    

 (Reporting by Alistair Smout; Editing by Francesco Canepa, Anand Basu & Kim
Coghill)