(Adds closing levels, recasts with profit-taking in late trade)
* FTSEurofirst 300 dips 0.3 pct following sharp gains
* Deutsche Telekom, Bouygues, Iliad up on M&A talk
* More than $312 billion in European M&A year-to-date
* Europe stocks enjoy further inflows from U.S. funds
By Blaise Robinson
PARIS, May 2 European stocks dipped late on
Friday as investors, wary that the confrontation over Ukraine
could escalate over the weekend, booked recent gains spurred by
an M&A wave.
The FTSEurofirst 300 index of top European shares
ended 0.3 percent lower at 1,351.08 points. It slightly rallied
following better-than-expected U.S. jobs data, before investors
started to take profits off the table in late trade.
Pro-Russian rebels shot down two Ukrainian helicopters on
Friday and Moscow accused Kiev of wrecking hopes of peace by
launching a "criminal" assault to retake the separatist-held
town of Slaviansk.
Mergers and acquisitions continued to boost a number of
sectors, with Deutsche Telekom up 1.1 percent on talk
that Sprint Corp has approached banks to work out funding
for its bid for T-Mobile US Inc, which is
majority-owned by the German telecom operator.
French telecoms group Iliad rose 4.9 percent and
conglomerate Bouygues added 4.2 percent, boosted by
speculation of a tie-up. JP Morgan Cazenove analysts raised
their rating on Bouygues to "overweight" from "neutral",
factoring in a 50 percent probability of a combination with
"The flurry of recent deals shows a swing in sentiment from
company managers. The fact that they are starting to buy means
they have better visibility on the economy," said David
Thebault, head of quantitative sales trading at Global Equities.
"For all the companies sitting on big cash piles, it's much
faster to do acquisitions to boost their market share and
improve revenue than to spend money in capital expenditure. This
could be the beginning of a long wave of M&A, as valuations
Also on the M&A front, AstraZeneca shares dipped 0.1
percent. The company rejected Pfizer's new indicative
offer of 50 pounds per share, and some traders said Pfizer might
have to raise its offer again up to the 55-pound level.
"Mid-50s is a level that Astra would be far more comfortable
with," said Dafydd Davies, senior trader at London-based firm
Prime Wealth Group.
AstraZeneca's share price has surged by around 26 percent
since news of Pfizer's interest emerged in late April.
European shares started to rally this week as corporate
deal-making outweighed mixed quarterly results from companies.
So far this year, M&A activity involving a European target
has grown to more than $312 billion. That is more than double
the value over the same period last year and the highest since
2008, according to Thomson Reuters data.
The week's rally in European stocks was also supported by
brisk investment flows, with fresh money coming in from U.S.
investors in the seven-day period ended April 30, data from
Thomson Reuters Lipper shows. Since the start of the year,
European stocks have seen 16 weeks of net inflows from the
United States and only one week of net outflows.
European M&A: link.reuters.com/qax88v
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Sudip Kar-Gupta in London; Editing by