Smurfit Kappa drops ahead of deadline

SMURFIT Kappa was the worst performing blue-chip share in London yesterday, down 6.5pc, as investors begin to bet that International Paper won’t submit a formal takeover bid for the packaging giant by the close of business tomorrow, the Irish Takeover Panel-imposed “put-up-or-shutup” deadline for a new bid.

Elsewhere, European shares extended a recovery yesterday as deal-making took centre stage after a week of political tension in Italy and Spain as well as friction between the United States and its allies over trade policies.

Investors’ concerns over trade were overshadowed by very strong US jobs data on Friday, which helped Wall Street to rise for a second day yesterday. Europe’s STOXX 600 gained 0.3pc and Germany’s DAX 0.4pc.

Mergers and acquisitions news drove the biggest moves. M&A has been a key trend in equity markets globally this year, with Britain among the most active for deals, helping the FTSE 100 to start to outperform eurozone stocks.

Bank stocks jumped as much as 1.3pc after the ‘Financial Times’ reported that Italy’s Unicredit and Societe Generale of France were exploring a merger which many investors hope could pave the way to further consolidation in the sector.

The index, however, pared some gains as analysts noted regulatory obstacles to any deal.

“The political and regulatory backdrop remains a significant hurdle to deliver an attractive deal,” said Jefferies analysts.

In London, CYBG rose after upping its offer for Virgin Money.

Air France KLM soared 5.5pc after AccorHotels said it was looking at taking a stake in the airline. Accor fell 6.9pc on the news.