European Stocks Close Mixed as AstraZeneca Rejects Bid

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European Stocks Close Mixed as AstraZeneca Rejects Bid

European equities closed mixed Monday, with London hit after AstraZeneca rejected Pfizer's final takeover bid, while Frankfurt and Paris rose.

LONDON -- European equities closed mixed Monday, with London hit after AstraZeneca (IW 1000/157) rejected Pfizer's (IW 500/22) final takeover bid, while Frankfurt and Paris rose.

London's FTSE 100 index of top companies gave up 0.2% to close lower at 6,844.55 points.

Converselyl, Frankfurt's Dax 30 gained 0.3% to 9,659.39 points, while the CAC 40 in Paris ended the day up 0.3% at 4,469.76 points, compared with Friday's closing values.

Italian stocks plunged more than 3% at one stage, with banks leading a slump that was mainly owing to technical reasons related to dividend payouts.

Traders said the market was hit also by last week's weaker-than-expected first-quarter eurozone economic growth data, bond market pressures and uncertainty before European parliamentary elections.

Milan's FTSE Mib index later closed at 20,319 points, down 1.6%.

The euro edged up against the dollar, with dealers saying that traders were on the sidelines in the absence of big economic indicators.

AstraZeneca Suffers Steepest Drop

In London, British drugmaker AstraZeneca topped the fallers board.

The group's shares tumbled by up to 15% after the company rejected Pfizer's improved $117 billion (85-billion-euro) bid pitched at £55 per share.

The announcement appeared to put an end to the long-running saga after Pfizer described its latest bid as its "final" bid on Sunday.

"The biggest story on Monday is without doubt AstraZeneca's decision to reject Pfizer's final offer to buy the company, after it valued the company's shares at £55 each, around £3 short of what the board would consider," said Craig Erlam, an analyst at Alpari traders. "Clearly, with Pfizer labeling this their final offer for the company, the deal now appears to be dead in the water, and AstraZeneca shares are suffering as a result."

The stock later pulled back slightly to stand at £42.98, down 10.9% from Friday's close.

Erlam added that downbeat Chinese economic data was also hitting London's mining sector, because China is a top consumer of metals.

"Also weighing on the FTSE are the miners after more disappointing data from China over the weekend added to concerns that the country cannot achieve its ambitious 7.5% growth target," he said.

On Wall Street, indices were positive, with the Dow Jones index slightly up 0.2% and the Nasdaq gaining 0.8%.

Huge AT&T, DirectTV Deal

Germany's biggest lender Deutsche Bank meanwhile bucked the trend in Frankfurt, closing down 1.8% at 30.20 euros, after it announced a capital hike of 8.0 billion euros.

The move, which is the second biggest recapitalisation in its history, sees Deutsche Bank turn to the Qatari royal family for a portion of the new funds.

Investor sentiment however was not boosted by a huge takeover deal in the telecommunications sector.

U.S. telecom giant AT&T clinched a deal on Sunday to acquire broadcast satellite service provider DirecTV for nearly $50 billion, the latest in a string of pay TV consolidation moves.

A merger between the two companies would create a potent rival to cable TV giant Comcast, which hopes to expand its coverage with the pending takeover of Time Warner Cable.

The European single currency rose to $1.3716 from $1.3695 late in New York on Friday.

The euro fell to 138.90 yen, having fallen earlier to 138.67, the lowest level since the beginning of February, from 139.08 late on Friday.

The dollar also fell to 101.27 yen, having reached 101.10 earlier and the lowest level for three and a half months, from 101.54 on Friday.

Sterling steadied at 81.55 pence to the euro, and rose to $1.6822.

The yuan was at 6.2373 to the dollar from 6.2334.

The price of gold advanced to $1,299.40 an ounce on the London Bullion Market from $1,291.50 on Friday.

Copyright Agence France-Presse, 2014

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