M&A activity brightens lackluster European stock markets

Above, general view of the Frankfurt stock exchange in Germany. Europe’s STOXX 600 share index fell 0.2 percent by 0830 GMT, pulled lower by a 1.1 percent fall in basic resources and weaker industrials stocks. (Reuters)
Updated 08 February 2018
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M&A activity brightens lackluster European stock markets

LONDON: A European recovery rally dissipated on Thursday with benchmarks across the region weighed down by commodities and technology stocks, while acquisition approaches sent Danish telecoms group TDC and Swiss insurer Swiss Re flying.
Europe’s STOXX 600 share index fell 0.2 percent by 0830 GMT, pulled lower by a 1.1 percent fall in basic resources and weaker industrials stocks. The index was still down 2.5 percent year-to-date after equities worldwide took a battering this week.
Financials limited the damage, with eurozone banks gaining 0.5 percent after strong earnings from UniCredit and Societe Generale.
Merger and acquisition activity drove the top European gainers.
Danish telecoms company TDC led the STOXX 600, shooting up 16 percent and on track for its best day since June 2007, after a takeover approach from Macquarie and three Danish pension funds, which it rejected.
Swiss Re shares jumped 6 percent after the reinsurer said it was in talks with Japan’s SoftBank to sell a minority stake.
Strong results also boosted some stocks as investors’ focus turned back to the European earnings season.
Societe Generale shares jumped 5.5 percent after the bank reported forecast-beating results despite a quarterly drop in profits.
Compass Group, the world’s biggest catering firm, jumped 6.2 percent after it raised its expectations for revenue growth.
Chipmaker AMS gained 4 percent, with traders citing an upgrade to ‘overweight’ by JP Morgan. Schibsted sank 5.6 percent after traders said its third-quarter earnings missed forecasts.


Dubai Aerospace signs $480 million loan deal

Updated 28 min 5 sec ago
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Dubai Aerospace signs $480 million loan deal

DUBAI: Dubai Aerospace Enterprise (DAE), one of the world’s largest aircraft lessors, said on Monday it had signed a four-year loan deal for $480 million.
DAE, a government-controlled company set up in 2006, has become one of the world’s largest aircraft lessors after acquiring Dublin-based AWAS last year.
The acquisition tripled the Dubai aircraft leasing and maintenance company’s portfolio to about 400 aircraft worth more than $14 billion.
The $480 million loan, which includes both conventional and Islamic finance tranches, has a so-called “accordion facility” allowing it to be increased to up to $800 million.
With the loan, the company’s unsecured revolving credit facilities increase to between $1.125 billion and $1.445 billion, depending on final size of the latest deal, Firoz Tararpore, DAE’s chief executive, said in a statement.
“On a pro forma basis as of December 2017, if this facility is fully drawn and if the proceeds are used to pay down secured indebtedness, DAE’s percentage of unsecured debt would increase from 26 percent to a range of 31-34 percent.”
Last year, the company issued $2.3 billion in senior bonds split across three tranches last year, partly to finance the AWAS acquisition.
Tarapore said in an interview last week that DAE was in talks to buy a near-record total of 400 jetliners from Airbus and Boeing in an order that could be worth more than $40 billion at list prices.
Al Ahli Bank of Kuwait coordinated the latest loan deal and was also the lead arranger and joint bookrunner together with First Abu Dhabi Bank, while Noor Bank joined the deal as lead arranger.