* FTSEurofirst 300 up 0.1 pct, hits new 6-1/2-yr high
* Pan-European index heads for 10th straight week of gains
* Shire surges about 20 pct on takeover approach
By Atul Prakash
LONDON, June 20 The FTSEurofirst 300 index
climbed to a 6 1/2-year high on Friday and headed for its 10th
straight week of gains, as shares of the drugmaker Shire surged
after it got a takeover offer.
Shire rose almost 20 percent to 44.66 pounds after
AbbVie confirmed it had made an offer to acquire it. Shire's
board rejected the offer, saying it fundamentally undervalued
the company and its prospects.
AbbVie said its final offer was worth 46.26 pounds a share,
adding that talks with Shire have ended. Shire has been seen as
a prime takeover target for U.S. drugmakers, thanks to a
mid-sized market value and its tax base in Ireland, where
effective corporate tax rates are among the lowest in the world.
"We have had a dearth in M&A activity in the last few years
but it does appear to be picking up as business confidence has
improved. This is supportive for the market," Robert Parkes,
equity strategist at HSBC, said.
"Investors' attention will start to shift from macroeconomic
data to the second-quarter earnings numbers. We are relatively
optimistic on the outlook for European earnings and expect them
to grow by 12 percent this year and the next."
According to Thomson Reuters data, 44 percent companies in
the STOXX Europe 600 index reported earnings above
analyst estimates in the first quarter. On average, 48 percent
of companies beat analyst estimates in a typical quarter.
Shire added the most points to the FTSEurofirst 300 index
, which had risen 0.14 percent to 1,397.53 points at
1456 GMT. The index reached a 6 1/2-year high earlier in the
session. It has gained more than 6 percent so far this year.
The European healthcare index rose 1.2 percent,
making it the best-performing sector in Europe.
"M&A is going to be a big theme, especially in the pharma
sector, in the second part of the year. A lot of companies have
accumulated a lot of cash and are looking for interesting
deals," said Philippe Gijsels, the head of research at BNP
Paribas Fortis Global Markets in Brussels.
"The market has paused after a good week as some investors
have taken profits, but we are in a bull market," Gijsels said.
"It's a good environment for equities as economic outlook is
improving and central banks generally have been quite
On the downside, Norway's Telenor fell 2 percent
after the country's trade minister said the government would ask
parliament for the right to cut its stake in the telecom company
and industrial group Kongsberg Gruppen.
France's state-controlled utility EDF fell 1.6
percent, down for a second day, as analysts at UBS and Natixis
cut their target price after the government decided to scrap a
planned increase in electricity prices.
"The 2013 re-rating of EDF was to a large extent driven by a
change in investor perception, because the regulatory
environment seemed to become more reliable and predictable," UBS
analysts wrote in a note. "Therefore, the cancellation of the
already agreed tariff hike could lead to an increased risk
perception on lower regulatory visibility."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Reporting by Francesco Canepa; Editing by Larry King)