European merger mania drives market within sight of new high

Yesterday's European cross-border takeover and merger mania drove the Irish market ahead sharply with the ISEQ closing just a few points off its previous all-time high and in line to break through to a new high in trading this week. Bank of Ireland, CRH and Irish Life were the main focus of attention.

Bank of Ireland - now seen as a front-runner in the bidding for New Ireland - was 16p higher on 891p while Irish Life, also a bidder for New Ireland, was 12p higher on 365p. New Ireland shares did not trade, but the view in the market is that French owners UAP want a quick and problem-free sale and will look for around £23 a share - almost £250 million.

The rise in the Irish Life share was, however, less to do with a New Ireland bid but more linked to the cross-border corporate activity in the European insurance sector, with Zurich forging a merger with Eagle Star and Generali making a hostile bid for AGF.

The Generali/AGF affair has other implications for Irish Life, as AGF - as well having a 5 per cent stake - is the majority shareholder in Church & General and Insurance Corporation - where Irish Life is the minority partner.

The two takeover bids in the British building materials sector Lafarge for Redland and Meyer for Harcros - provided a positive background for CRH, which brought its acquisition spending to £168 million with a £27 million in New York. CRH dealt from an overnight 717p sterling (788p) to 820p at yesterday's close.

Some positive reaction to last week's briefing to analysts in New York failed to push Smurfit ahead, and the share closed down 3p on 227p ahead of JS Corp's third quarter results on Thursday. JS Corp was unchanged yesterday on $19.75 (£13.52).

Arnotts was unchanged on 415p as it was disclosed that AIB Investment Managers - the biggest shareholder in the company as of last March with over 18 per cent of the shares - has virtually disappeared off the Arnotts share register. AIBIM no longer has a disclosable (3 per cent) stake in Arnotts, the retail group has stated.