Europe midday: Shares rally as Pearson surges on possible Apollo bid

by | Mar 11, 2022

European shares surged ahead after a lacklustre open, shrugging off European Central Bank plans to withdraw stimulus this summer as investors focused on a potential bid for UK educational publisher Pearson.
The pan-European Stoxx 600 index was up 1.7% after closing 1.7% lower on Thursday. Britain’s FTSE 100 bucked the trend with a 0.39% gain after official data showed the UK economy bounced back strongly in January after taking a hit from the Omicron variant and Plan B restrictions, but the outlook was less upbeat.

GDP grew 0.8% after contracting by 0.2% in December, coming in comfortably ahead of expectations of 0.1% growth. This leaves GDP 0.8% above pre-pandemic February 2020 levels.

Investors were also digesting news from the ECB, which signalled an increase in interest rates as soaring inflation outweighed concerns about the fallout from Russia’s invasion of Ukraine.

In equity news, Pearson shares surged by 23% after private equity outfit Apollo Global Management confirmed that it was in the early stages of evaluating a cash offer.

Apollo said there was no guarantee that any offer will be made or on which terms. The company is required to announce a firm intention within 28 days or announce that it does not plan an offer.

Shares in Italian defence company Leonardo jumped to the top of the benchmark index with a gain of 11% after it said increased European Union defence spending would boost cash flow.

EssilorLuxottica shares gained after the luxury eyewear group reported its best quarter of 2021 with all regions exceeding pre-pandemic sales.

Lanxess rose as the German speciality chemicals maker issued quarterly profit outlook above expectations.

Shares in UK online supermarket and technology group Ocado jumped after a patents infringement case against it brought by Norwegian warehouse robot maker AutoStore was rejected by the International Trade Commission.

On the downside, shares in Russian gold miner Polymetal resumed their slide, down almost 14%, as Western sanctions began to bite and the board of compatriot steelmaker Evraz quit en-masse after major shareholder Roman Abramovich was also hit by financial measures.

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