UPDATE 1-Comcast's Sky bid pushes European media stocks to month high

  • Reuters
  • Stock Market News
UPDATE 1-Comcast's Sky bid pushes European media stocks to month high
Credit: © Reuters.

* STOXX 600 down 0.1 pct

* Comcast makes $31 bln counterbid for Sky

* Persimmon (LON: PSN ), Poste Italiane jump after earnings

* Fed Chair Powell's testimony in focus (Adds quotes and details, updates prices)

By Kit Rees

LONDON, Feb 27 (Reuters) - M&A activity spiced up a more reserved European share trading session on Tuesday after Comcast made a surprise counterbid for pay-TV group Sky SKYB.L , sending its shares soaring.

The pan-European STOXX 600 .STOXX index was down 0.1 percent by 0947 GMT, while the UK's FTSE 100 .FTSE rose 0.2 percent.

Shares in Sky jumped more than 20 percent on the back of Comcast's CMCSA.O $31 billion offer, which could scupper Fox's FOXA.O plan to buy out Sky and sell it to Walt Disney DIS.N . shares were trading well above Comcast's offer price, suggesting some investors expect Fox/Disney to come back with a higher offer.

"It has all the makings of being the most preferential bid for both shareholders and, importantly, regulators," Jasper Lawler, head of research at London Capital Group, said, adding that the bid was also less complicated than a deal with Fox and Disney while also offering shareholders a higher price.

"This could be a sign of things to come from the U.S. where maybe we're looking at more international expansion from the U.S. into Europe which is a more straightforward target than perhaps Asia is," Lawler said, citing the failed deal in 2015 between Time Warner Cable and Comcast in the United States.

Europe's media index .SXMP was the top-performing sector, up 1.7 percent at a one-month high. Shares in British broadcaster and content producer ITV ITV.L rose 2.1 percent.

Results were once again in focus, with UK housebuilder Persimmon PSON.L advancing 10.5 percent after it reported a jump in full-year earnings and a higher reservations rate and boosted its interim dividend. results fired up the whole sector, with Berkeley up 2.3 percent and Taylor Wimpey (LON: TW ) climbing 1.7 percent.

Likewise shares in Poste Italiane PST.MI advanced more than 5 percent after the group said that it would raise dividends and boost profits through new insurance products and parcel deliveries under a five-year business plan. of the STOXX, troubled subprime lender Provident Financial PFG.L saw its shares surge 87 percent to their highest levels in six months after the company said it would raise 331 million pounds via a rights issue. broader stocks performance was more muted, however, ahead of testimony from the new U.S. Federal Reserve Chairman Jerome Powell later in the day - watched for clues about future rate hikes and his view on recent market volatility.

Concerns over rising inflation and higher bond yields sparked a global equity market sell-off at the beginning of February, but as bond yields have eased this has taken the pressure off equity indexes slightly.

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