Europe midday: Shares pare gains despite bid frenzy

European shares pared gains on Monday despite takeovers dominating the news at the start of the week, with private equity outfit Apollo active on two fronts.

The pan-European Stoxx 600 index was up 0.13% at 1030 GMT with all major bourses higher. US futures indicated a broadly positive start for Wall Street ahead of another corporate earnings dump, although the Nasdaq looked header for a negative open.

“Cautious optimism is the Monday motivation mantra, as stronger US corporate news and signs of consumer resilience help to mask ongoing worries about the knock-on effect of higher interest rates. Although Wall Street closed lower on Friday, stocks in Asia eked out gains and European indices are set to edge up again,” said Hargreaves Lansdown analyst Susannah Streeter.

“But worries about how many rate hikes could still be the sights of the Federal Reserve are still bubbling away in the face of growing consumer confidence and higher inflation expectations and could erupt back up to the surface.”

In equity news, shares in online unguent seller THG soared confirmed it has received a highly preliminary and non-binding indicative takeover proposal from Apollo Global Management.

Oil and gas engineering firm Wood Group gained more than 7% after the company decided to engage with Apollo for a firm offer for its last buyout price of 240 pence per share.

Shares in IDS gained more than 5% after the Communication Workers Union and Royal Mail management reached an agreement in principle aimed at ending a long-running strike over pay.

“The walk-outs have put the group into a precarious position in terms of liquidity. It’s delayed the group’s attempt to re-size operations in the face of falling letter and parcel volumes and has meant the group will only have limited breathing room when it comes to its loan agreements,” said HL's Streeter.

Shares in videogame maker Rovio surged by after Japan's Sega agreed to launch a €706m offer for the Angry Birds maker.

Reporting by Frank Prenesti for Sharecast.com