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* European shares edge up
* US stimulus hopes offers support
* DAX briefly tops 13,000 points
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Joice Alves (joice.alves@thomsonreuters.com)
and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) and Danilo Masoni (danilo.masoni@thomsonreuters.com) in
Milan.
TALKTALK: ANOTHER SIGN OF THE M&A BOOM (0840 GMT)
It may be a small stock after all with a market cap of around 1 bln pounds but TalkTalk
is getting front-page attention today after the UK broadband provider received a buyout
offer from Toscafund Asset Management that sent its shares rallying more than 17% at one point.
The offer is not just about TalkTalk but also underscores a broader boom global M&A activity
that has seen deals climb to a record $1 trillion in Q3. And the outlook for the coming quarters
looks promising.
"Despite Covid and the upcoming U.S. presidential election take-overs and mergers are going
ahead and not only that but decent premiums are being paid also," says Markus Huber, trader at
City of London Markets.
Last week Citi highlighted that M&A activity had already started to recover in the U.S.
while Europe offered scope to catch up, as the economics of debt-financed M&A look compelling
but also because valuations are much cheaper than in the U.S..
Back to TalkTalk, the stock trades at a PE of 6.3 times and Huber says "the premium offered
(is) not necessarily on the high side". Its shares surged above the price tag offered but later
aligned to it.
Toscafund, which is TalkTalk's No. 3 investor, has made a 97 pence per share offer to take
the company private.
(Danilo Masoni)
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OPENING SNAPSHOT: DAX BREAKS ABOVE 13K (0750 GMT)
In a risk-on morning, a combination of positive results and hopes for more U.S. stimulus
boosted investors' appetite for European equities.
The pan European index surged 0.6% to a three-week high, with the German DAX
hitting the highest level since mid September and breaking above 13,000 points.
Online gaming got a boost from GVC results. Shares in the Ladbrokes and bwin owner
reached a two-year high, up 6.7% after the company raised annual core earnings estimates and
reported stronger Q3 revenues.
In terms of sectors, travel and leisure shares were the best performers up 1.8% with
British Airways' IAG owner jumping 4%.
Shares in British broadband operator TalkTalk surged 17% after it said it had
received a preliminary offer of 97 pence per share from asset manager Toscafund Asset Management
to take the company private.
(Joice Alves)
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ON OUR RADAR: AMS, SUEDZUCKER, GVC, MEDIOBANCA (0645 GMT)
Renewed hopes for more U.S. stimulus are pushing European futures up after House Speaker
Nancy Pelosi disparaged Trump for backing away from talks on a deal with lawmakers.
In the corporate world there is a mix batch of results. For instance, sensor maker AMS
unexpectedly reported 13% drop in revenue, and announced new measures to secure long-term
financing after the takeover of Germany's Osram.
While Suedzucker, Europe's largest sugar refiner, posted a 142% surge in
second-quarter earnings but a disappointing sugar beet crop expected in Europe this year, weaker
trend in world sugar prices and COVID-19 are still creating uncertainty for the sugar sector, it
said.
Ladbrokes and bwin owner GVC Holdings raised its estimates of annual core earnings
after posting a stronger third-quarter revenue, helped by a surge in online gaming and as sports
events such as the English Premier League resumed.
British airline easyJet warned it would report a loss of as much as 845 million
pounds in its last financial year.
Meantime, British fund supermarket Hargreaves Lansdown took in 800 million pounds
of net new business in the quarter to Sept. 30, despite what it described as weakening investor
sentiment arising from COVID-19 and Brexit uncertainty.
Flavour and fragrance maker Givaudan said like-for-like sales growth accelerated to
3.1% in the third quarter as demand for items like toothpaste and soap held up and sales of
perfume improved slowly.
In Italy, eyewear tycoon Leonardo Del Vecchio said he is ready to support ambitious plans
for Mediobanca after raising his stake in Italy's top investment bank to just above
10%, according to an interview with daily Il Messaggero.
In M&A, U.S. business analytics firm Dun & Bradstreet Holdings said it will acquire
European data and analytics firm Bisnode from Swedish private equity firm Ratos.
(Joice Alves and Danilo Masoni)
******
MORNING CALL: STIMULUS HOPES (0540 GMT)
Expectations of more U.S. stimulus measures are boosting global appetite for risky assets.
As a result, European shares are seen opening high, following a gauge of Asian shares, which
climbed to a one-month high.
After the U.S. President Trump shut down the negotiations with lawmakers in Washington on a
coronavirus package, he wrote on Twitter that Congress should pass money for airlines, small
businesses and stimulus checks of $1,200 for individuals.
All eyes will be on U.S. employment data due later in the day, which will likely show the
recovery in the country is losing steam.
Financial spreadbetters at IG expect London's FTSE to open 13 points higher at 5,959,
Frankfurt's DAX to open 49 points up at 12,978 and Paris' CAC to open 20 points higher at 4,902.
(Joice Alves)
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