Merger speculation fuel rally among brewers

Bank of Ireland closes down 1.5 per cent after about 240 million shares change hands

The prospect of more mergers and acquisitions fuelled a rally among brewers, after the Wall Street Journal reported that Anheuser-Busch InBev, which produced Budweiser beer, was talking to banks about financing a possible $122 billion bid for SABMiller. Photograph: Spencer Platt/Getty Images

The prospect of more mergers and acquisitions fuelled a rally among brewers, after the Wall Street Journal reported that Anheuser-Busch InBev, which produced Budweiser beer, was talking to banks about financing a possible $122 billion bid for SABMiller. Photograph: Spencer Platt/Getty Images

 

European stocks were little changed today, after their first weekly slide in more than a month, as disappointing Chinese economic data and concern over the future of the UK offset gains among brewers.

The prospect of more mergers and acquisitions fuelled a rally among brewers, after the Wall Street Journal reported that Anheuser-Busch InBev was talking to banks about financing a possible $122 billion bid for SABMiller.

The Stoxx Europe 600 Index slipped 0.1 per cent to 343.85 after earlier losing as much as 0.4 per cent. The benchmark gauge slid 1 per cent last week, the first loss since early August as investors considered central-bank stimulus policies and opinion polls before the Scottish referendum.

The FTSE-100 closed down 0.1 per cent while Germany’s DAX index rose 0.1 per cent. France’s CAC 40 Index fell 0.3 per cent, while Italy’s FTSE MIB Index and Portugal’s PSI 20 Index posted the biggest declines among 18 western-European markets, falling more than 1 per cent each.

The Iseq was down 0.82 per cent or 40.26 points to 4,861.48.

DUBLIN It was a dull day in Dublin, according to analysts, with little news of any kind.

Bank of Ireland was one of the biggest performers. It continued to see large volumes traded with about 240 million of its shares changing hands. It closed down 1.5 per cent to 31 cents.

It was also a busy day for international building-materials group CRH, which followed other European construction stocks lower. CRH ended the day down more than 2 per cent to €18.15.

Hotel group Datala, which last week impressed investors with a 3 per cent rise in first-half revenues, has been on the road doing a number of meet-and-greets with buyers. It saw its shares rise by 1.75 per cent to €3.20.

C&C also enjoyed a bounce today amid talk of M&A activity involving brewers and a report out from the CSO which showed that exports from Ireland’s drinks sector are worth €1.4 billion. It closed up 1 per cent to €4.22.

LONDON SABMiller, which makes Pilsner Urquell and Grolsch, jumped almost 10 per cent – up 334.5p to 3,740p – after it reopened takeover speculation in the drinks sector by making an unsuccessful takeover approach for Heineken. Heineken said its founding family was determined to keep the Dutch firm’s independent status and that SABMiller’s approach was “non-actionable”.

However, SABMiller’s interest was taken as a sign that it is bolstering its own defences against a possible £75 billion bid from Anheuser-Busch InBev, which is reported to be talking to banks about financing. Guinness owner Diageo was 40.5p higher at 1,853p amid wider consolidation hopes in the sector.

EUROPE Air France-KLM Group slid 3.3 per cent to €8.26 after saying it expects its most disruptive strike since 1998. Europe’s biggest airline will probably cancel 52 per cent of services on the first day of an action due to run through September 22nd. The dispute will cost €20 million a day in revenue, it said.

Hennes and Mauritz (H&M) advanced 2.4 per cent to a record 309.8 kronor. Europe’s second-biggest clothing retailer reported a 16 per cent gain in third-quarter sales. NEW YORK US stocks fell, as the Nasdaq 100 Index tumbled 1 per cent in early trading, while Treasuries ended a seven-day slide after industrial production unexpectedly slipped in August for the first time in seven months.

Most US stocks fell, dragged lower by the tech sector as investors made space in their portfolios for Alibaba’s planned initial public offering later this week, and biotech shares weighed further on the Nasdaq.

Microsoft lost 0.9 per cent to $46.26 after agreeing to buy Mojang, makers of Minecraft, for $2.5 billion, in a bid to boost its Xbox and mobile business.