Schering AG climbed after saying it backed Bayer AGs 16.3 billion-euro ($19.5 billion) cash bid for the company. Alcatel SA gained as the worlds biggest maker of broadband Internet gear said it may buy Lucent Technologies Inc for at least $12.6 billion.
Stocks in Europe are inexpensive relative to world benchmarks. The Dow Jones Stoxx 600 Index is valued at 14.1 times estimated earnings, below the 15.6 for the Morgan Stanley Capital International World Index, based on data compiled by Bloomberg. The ratio for the pan-European index is the lowest since 2001.
Equities are representing good value, said Giles Keating, global head of research at Credit Suisse Group in an interview in London. Some companies are taking advantage of that.
The Stoxx 600 added 0.3% to 337.10 at 12:59 p.m. in London, heading for the highest close since June 2001. The Stoxx 50 also gained 0.3%, and the Euro Stoxx 50, an index for the 12 countries using the euro, rose 0.1%. European stocks fell on Thursday, ending 10 straight days of gains, the longest winning streak in six years, on concern earnings growth is flagging.
| Schering and Alcatel shares rise on takeovers |
Dow Jones Stoxx 600 gained 0.3%,
and the Euro Stoxx 50 rose 0.1%
Pan-European index has gained 0.9%
Ratio for the pan-European index is
the lowest since 2001
Takeover speculation about companies such as Prudential Plc has helped send the Stoxx 600 toward its third weekly advance.
The pan-European index has gained 0.9% so far this week as did the Euro Stoxx 50. The Stoxx 50 is up 0.6%.