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European Stocks Climb After Alcan Bids for Pechiney; MAN Surges

07/07/2003 11:41
European stocks advanced, led by metals companies including Arcelor SA and Corus Group Plc, after aluminum maker Alcan Inc. made an unsolicited offer to buy rival Pechiney SA for 3.39 billion euros ($3.87 billion).

MAN AG surged after Der Spiegel reported that Volkswagen AG wants to buy the truckmaker's commercial vehicle business.

The Dow Jones Stoxx 50 Index added 1.7 percent to 2433.19 as of 9.03 a.m. in London. The Stoxx 600 Index added 1.5 percent, with more than six times as many shares gaining as dropping.

Alcan, the world's second-biggest aluminum producer, offered to buy Pechiney, the fourth-biggest, for 41 euros a share, a 21 percent premium to the French company's closing price on Friday of 34.02 euros. The bid is a combination of stock and cash.

``This is good for the market -- it shows there's value out there,'' said Roger Hornett, who helps oversee more than $5.7 billion at Theodoor Gilissen Securities in London. ``It's a good sign that an economic recovery is on the way.''

Trading in Pechiney, which described the offer as ``unfriendly,'' will be suspended until 1 p.m. Paris time, Euronext said. The shares have risen 63 percent since slumping to a record low on March 7.

Arcelor, the world's biggest steelmaker, rose 5.3 percent to 11.72 euros. German competitor ThyssenKrupp AG advanced 4.4 percent to 11.39 euros. Corus, an Anglo-Dutch steel company, jumped 4.1 percent to 19.25 pence.

MAN Bid?

MAN, Europe's third-biggest maker of heavy trucks, rose 8.8 percent to 17.13 euros. Volkswagen Chief Executive Officer Bernd Pischetsrieder has agreed with Allianz AG Chief Financial Officer Paul Achleitner on how a takeover of the truck unit would work, Der Spiegel reported over the weekend.

Allianz owns 50 percent of Regina Verwaltungsgesellschaft mbH, which has a 27 percent stake in MAN, according to Bloomberg data. Volkswagen spokesman Dirk Grosse-Leege declined to comment on ``recurring speculation'' about mergers in the truck industry.

Stefan Denig, a spokesman for Allianz, and Wieland Schmitz, a spokesman for Munich-based MAN, both declined to comment.

Infineon Technologies AG, Europe's second-largest semiconductor company, added 6.4 percent to 9.86 euros. J.P. Morgan Chase & Co. raised its fair value estimate for the stock to 11 euros from 9 on optimism higher memory-chip prices will drive improving earnings. STMicroelectronics NV, Europe's biggest chipmaker, advanced 3.1 percent to 19.1 euros.

Royal Philips Electronics NV, the region's third-largest maker of semiconductors, added 4.4 percent to 17.33 euros.

Estimate Raised

Royal Ahold NV, the owner of Stop & Shop supermarkets, fell 2.6 percent to 7.50 euros after Dutch prosecutors raided its head office in Zaandam, Netherlands as part of a criminal investigation.

The world's third-largest retailer is also being investigated by the U.S. Securities and Exchange Commission and is the subject of a criminal probe by the U.S. Department of Justice. The company has been under scrutiny since saying it overstated profit at its U.S. food distribution unit for three years.