| CATEGORY: MARKET REPORT - EUROPE CLOSE SECTOR: BANKING |
European close: Oil and banking stocks rise |
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Fri 12 Sep 2008
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LONDON (SHARECAST) - European shares closed with good gains Friday thanks to buoyant oil and banking stocks.
Energy companies advanced in line with rising oil prices. Eni, Shell and Total were going well.
Banking stocks gained ground on reports that a consortium led by Bank of America and including financial groups JC Flowers and China Investment is mulling a bid for beleaguered investment bank Lehman Brothers. Barclays is also being mentioned as a possible bidder.
BNP Paribas, Dexia, Credit Agricole, Societe Generale, Credit Suisse and UBS were all higher on this side of the pond.
However, shares in Deutsche Postbank fell back after Deutsche Bank, Germany's biggest bank by assets, struck a deal to buy a 29.75% stake in the retail bank from Deutsche Post for €2.79bn in cash.
The deal means that Deutsche Bank is not obliged to bid for the rest of Postbank's shares as it agreed to acquire less than 30% of the company.
However, Deutsche Post has granted Deutsche Bank an option to buy an additional 18% stake for €55 per share between one and three years after the initial acquisition.
The group plans to fund the deal through a capital increase of up to €2bn. Timing and the precise composition of the equity raising are subject to market conditions, it added.
Deutsche Bank insisted that the tie-up will have no impact on branches, jobs or the brand of Postbank.
The German Dax closed 55 points higher at 6,234, the French CAC was up 83 points to 4,332, while the Swiss market rose 144 points to 7,215.
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