Worldpay, M&A in focus as European shares consolidate; Italy banks up

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Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt

By Helen Reid and Danilo Masoni

LONDON (Reuters) – A spate of dealmaking news swept European stocks on Tuesday, with Worldpay <WPG.L> soaring after bid approaches, helping mitigate a broad based pull back from the previous session’s strong gains.

The pan-European STOXX 600 <.STOXX> fell 0.3 percent, in line with a dip in euro zone stocks <.STOXXE> and Britain’s FTSE <.FTSE> index.

On Monday, European shares had their strongest day since April 24, when Emmanuel Macron won the first round of France’s presidential election.

The closure of the U.S. market for the July 4 national holiday also meant volumes were lower than usual.

“Today is a consolidation day after gains yesterday, as we don’t have a U.S. market,” said Angelo Meda, head of equities at Banor Capital.

But dealmaking was back with a vengeance as a key driver of individual share moves.

Payments company Worldpay shares soared 27.7 percent to a record high after it received rival takeover approaches from credit card tech firm Vantiv <VNTV.N> and JPMorgan <JPM.N>.

This came after Danish rival Nets <NETS.CO> said on Monday it had received offers. Nets and another German rival Wirecard <WDIG.DE> rose more than 4 percent.

“This is one of the most intriguing sub-sectors in the financials space. There are a lot of companies still, and we are probably going to have only one or two big leaders in the payments space,” said Meda.

EDP <EDP.LS> was a top gainer, up 1.6 percent after Spain’s Gas Natural <GAS.MC> was re[ported to have approached the Portuguese utility for a $40 billion merger which would create Europe’s fourth biggest utility by market capitalization.

Gas Natural shares fell 0.6 percent. EDP denied negotiations were taking place.

Shares in French rival EDF <EDF.PA> also dropped 4 percent after HSBC downgraded the stock to “reduce”.

Clariant <CLN.S> shares gained 3 percent after two activist investors upped their stake in the Swiss chemicals firm in opposition to a planned merger with U.S. firm Huntsman <HUN.N>.

Baader Helvea analysts said the move could make a counterbid more likely.

And the prospect of suitors Bain and Cinven getting regulatory approval for a renewed offer for Stada <STAGn.DE> sent the generic drugmaker’s shares up 2.2 percent.

Italian stocks outperformed as banks <.FTIT8300> rallied more than 1 percent to a 15-month high after the country’s ninth-biggest lender Carige <CRGI.MI> approved a 500 million euros cash call to beef up its balance sheet.

“This was the last piece of the puzzle which we needed to fix, in order to have a recovery in credit and profitability in banks… It’s not yet in the prices, because the market still wants to see non-performing loans problems being solved,” said Meda.

A further boost to the sector came from news that the European Commission gave its blessing to a state bailout of Monte dei Paschi di Siena <BMPS.MI>, paving the way for a deep restructure of the troubled lender.

(Editing by Jeremy Gaunt)

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