European stocks end flat as warnings of tighter restrictions cloud mergers and acquisitions cheers By Reuters


© Reuters. FILE PHOTO: The DAX chart of the German equity price index is pictured on the stock exchange in Frankfurt, Germany, November 19, 2021. REUTERS / Staff


By Anisha Sircar and Shreyashi Sanyal

(Reuters) – European stocks closed flat on Monday as Germany’s warning of tighter foreclosure restrictions eclipsed gains in Telecom Italy (MI 🙂 following a $ 12 billion proposal from the US KKR fund to privatize Italy’s largest telephone group.

The pan-European index finished flat after falling earlier in the day when German Chancellor Angela Merkel said Europe’s largest economy needed tighter restrictions to control a wave of COVID-19 inflections.

This came after an increase in the number of COVID-19 cases prompted Austria to return to lockdown.

Meanwhile, telecoms stocks rose 1.8% – their best day since March – fueled by a 30.3 jump in Telecom Italia (TIM).

KKR is said to have set an indicative price of 50.5 euro cents for its takeover offer, a premium of 45.7% over TIM’s closing price on Friday.

“The premium is very attractive, which is why we are seeing a big jump in equities, but an interesting thing is going to be the Italian government’s response to the offer, which lays the groundwork for future external offers – and all the important ones. companies that have gone through tough times, ”said Craig Erlam, Senior Market Analyst at OANDA.

Italian mobile tower company Inwit, partly controlled by TIM, gained 4.6% as the KKR approach created speculative appeal for the company, while TIM’s main investor Vivendi (OTC 🙂 increased 2.0%.

Markets in the United States rose following the appointment of Federal Reserve Chairman Jerome Powell for a second four-year term by President Joe Biden.

“The reappointment of Jerome Powell marks the return of the approach followed by the new American presidents since 1980, namely the renewal of the outgoing chairman of the Fed to ensure the continuity that the markets need,” said Chris. Beauchamp, Chief Market Analyst at IG.

The European benchmark index recorded its first weekly decline in seven weeks on Friday, as concerns over the impact of renewed COVID-19 restrictions hit cyclical sectors such as automakers and banks.

But those sectors rebounded on Monday, with banks, mining and industrial companies all advancing.

In another telecoms deal, Norway’s Telenor climbed 1.5% after agreeing with Charoen Pokphand Group to merge their Thai units in a deal valued at around $ 8.6 billion.

Sweden’s Ericsson (BS 🙂 slipped 5.6% after the mobile telecommunications equipment maker agreed to buy cloud communications company Vonage for $ 6.2 billion.

Wind turbine maker Vestas slipped 2.5% after it said it was hit by a cyberattack that affected its IT systems and compromised the Danish company’s data.

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