* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 up 0.2 pct
* Elan surges after $8.6 bln takeover offer from Perrigo
* Despite recent wave of deals, M&A activity subdued in 2013
* Banking stocks slip as cap hike worries hit Barclays
By Blaise Robinson
PARIS, July 29 Big mergers and acquisitions
deals fuelled consolidation expectations and helped European
stocks gain ground on Monday after a two-session dip.
Shares in Irish drugmaker Elan jumped 9 percent
after U.S. peer Perrigo agreed to buy the firm for $8.6
billion, sparking a rally in pharma stocks, with Shire
up 1.5 percent and Qiagen up 1 percent.
Media shares also surged, boosted by a merger plan between
Publicis and Omnicom unveiled over the
weekend, in a deal worth $35.1 billion. France's Havas
soared 6.3 percent and UK's WPP added 1.5 percent.
Publicis shares were halted on Monday.
The FTSEurofirst 300 index of top
European shares was up 0.2 percent at 1,207.40 points, after
losing about 0.8 percent in two sessions. The benchmark index
has risen 9 percent since late June.
"It's Merger Monday. Money is cheap, companies are sitting
on piles of cash, and finally some of them are looking for
deals," said David Noble, a specialist trader at Louis Capital
Markets in London.
Also among the biggest gainers on Monday, ophthalmic optics
firm Essilor rose 4.8 percent after buying a stake in
photochromic lens unit Transitions Optical from PPG Industries
Inc for $1.7 billion.
Despite the number of high-profile deals unveiled over the
past 10 days, European merger activity remains subdued, with the
12-month rolling average running at around $160 billion, down
from about $240 billion at its 2007-2008 peak, according to
Thomson Reuters Datastream.
French food group Danone gained 3.1 percent after
saying sales growth accelerated in the second quarter. It kept
its full-year 2013 profit and sales outlook.
Around Europe, UK's FTSE 100 index, Germany's DAX
index and France's CAC 40 were all up 0.3
percent. The euro zone's Euro STOXX 50 index was up
0.2 percent at 2,747.69 points.
"I'm quite positive, the market goes up slowly with some
consolidation moves happening during the session," TradingSat
analyst Alexandre Tixier said.
"Trading volumes remain brisk, which is a sign of strong
buying appetite at this point. Our exposure to equities is at 80
percent right now."
Bucking the trend, worries of a capital hike by UK lender
Barclays prompted investors to book profits on banking
stocks. Barclays was down 3.7 percent, Commerzbank
down 1.9 percent and Banco Popolare down 1.7 percent.
The STOXX Europe 600 banking index has gained 13
percent since late June, outpacing the FTSEurofirst 300 which
has risen 8.4 percent over the same period.