French speciality chemicals group Rhodia continued to bask in the spotlight as a further bout of merger speculation drove shares another 10 per cent higher.
A number of companies have been mentioned as potential suitors. Yesterday's activity followed a Financial Times report saying Rhodia might be the target of a takeover battle between its Swiss peer Clariant and the Dutch group DSM.
French traders were doubtful whether Clariant was a likely candidate, saying synergies between the companies would be low. They said both companies were heavily indebted, so any takeover would involve a share swap, which would hardly enthuse investors.
Rhodia closed yesterday at €10.45, extending gains over three sessions to almost 25 per cent. The shares had soared more than 80 per cent in October, albeit from near lows for the year.
Clariant fell 3.2 per cent to SFr25.70 as it played down the speculation, reiterating that its focus was on small or medium-sized takeovers. DSM edged 0.8 per cent higher to €36.42.
The Greek banking sector sprang to life on news that the country's two largest commercial banks, National and Alpha, were in merger talks. The bourse's banking index jumped 6.2 per cent as the announcement was seen as the spur for a sectoral shake-up.
Dealers said the merged bank would immediately be dominant in Greece and would provide the country with its first "European-sized" bank with assets easily among the top 50.
Tech firms started the day weaker but many later moved into the black. One was telecoms equipment maker Alcatel, which issued third-quarter results on Wednesday. Yesterday it edged up another 0.8 per cent to €16.90 after the previous day's 7 per cent, in spite of analyst downgrades.
Rivals Nokia and Ericsson had a quiet day but in Germany, chipmaker Infineon was the best performer in the Dax index of blue chips, rising 4.5 per cent to €17.51.
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