BLBG: European Stocks Drop After Weekly Rally as Publicis Falls
European stocks fell, after this year’s biggest weekly rally, as investors weighed earnings and Publicis Groupe SA dropped after agreeing to buy Sapient Corp. U.S. index futures were little changed, while Asian shares slid.
Publicis dropped 4.8 percent after agreeing to pay $3.7 billion for Sapient. Ryanair Holdings Plc rallied to a record after raising its full-year profit forecast. Portugal Telecom SA gained 3.3 percent after Altice SA offered to buy some assets from Oi SA.
The benchmark Stoxx Europe 600 Index slipped 0.3 percent to 335.92 at 9:28 a.m. in London. The gauge rallied 2.9 percent last week as the Bank of Japan unexpectedly boosted its stimulus and companies from Novartis AG to Total SA reported earnings that beat estimates. Standard & Poor’s 500 Index futures slid 0.1 percent today, while the MSCI Asia Pacific Index lost 0.5 percent.
The Stoxx 600 has rebounded 8.3 percent from this year’s low on Oct. 16, trading at 15.6 times the projected earnings of its members, near the highest valuation since 2009.
Publicis lost 4.8 percent to 52.62 euros. The world’s third-largest advertising company agreed to buy Boston-based Sapient in an all-cash deal. Sapient holders will get $25 per share, a 44 percent premium on its closing price on Oct. 31. Sapient’s Chief Executive Officer and Co-Chairman Alan J. Herrick will lead the combined entity, according to a joint statement.
Profit Forecast
Ryanair jumped 9 percent to 8.28 euros, its highest price since it sold shares to the public in 1997. The discount airline said it expects net income of 750 million euros ($937 million) to 770 million euros for the 12 months through March 2015, at least 100 million euros more than it forecast previously.
Portugal Telecom gained 3.3 percent to 1.35 euros. Altice said Nov. 2 its offer had an enterprise value of 7.03 billion euros and included the company’s businesses outside Africa. The bid excluded for some debt securities and financing vehicles. If successful, Altice’s bid will unwind a merger between Portugal Telecom and Brazil’s Oi.
In the U.S., a report from the Institute for Supply Management may show a manufacturing growth slowed down last month, economists surveyed by Bloomberg projected.A similar report for the euro area may show factory output continued to expand.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Srinivasan Sivabalan
