European shares at three-year high

European shares closed at fresh three-year highs yesterday with HeidelbergCement and UniCredito shining on takeover news.

Shares in Germany's biggest cement maker surged 19 per cent after Spohn Cement offered to buy the firm at €60 per share late on Friday.

Meanwhile, shares in UniCredito rose three per cent after the Italian bank agreed at the weekend to buy HVB Group of Germany in what would be Europe's biggest-ever cross-border banking takeover deal worth nearly €20 billion. HVB shares rose 2.6 per cent.

The euro falling to a nine-month low against the dollar continued to underpin the market despite crude oil rising back above $54 a barrel and the Dow Jones Industrials index in New York opening down, although Wall Street later rallied strongly.

By 1545 GMT the FTSEurofirst 300 index had unofficially closed 0.39 per cent firmer at 1,134.78 points, having briefly flirted with a high of 1,135.34.

The narrower DJ Euro Stoxx 50 index was up 0.47 per cent at 3,158.6 points.

"It's been a pretty good rally on the markets - they've certainly performed well but we just think the chances are they will trade a bit sideways from here," Henk Potts, equity strategist at Barclays Stockbrokers said.

The takeover plans boosted other shares in the same sectors, with UK building materials firm Hanson gaining 3.3 per cent. Italian merchant bank Mediobanca rose 2.3 per cent on talk of a further consolidation in Italian banking. But ABN AMRO lost one per cent after the Dutch bank said late on Friday it would raise its cash bid for Italy's Antonveneta to €26.50 from €25.

ABN faces competition for Antonveneta from rival bidder Banca Popolare di Lodi and analysts said they were surprised by the increased offer given management's previous stance that €25 was a fair price.

Antonveneta shares were 2.9 per cent firmer. "There's been a lot of talk about consolidation - it's partly a concept that in order to grow there's very few domestic opportunities for many of the big banks now," Mr Potts added. "Some of the big banks have been struggling and in order to get them out of the quagmire you have to say that consolidation looks on the cards."

Dutch electronics and electrical group Philips added 1.7 per cent as JP Morgan raised its forecasts for semiconductor sales growth this year and the next.

French defence electronics group Thales rose 2.6 per cent, after an Italian minister at the Paris air show said Italy was interested in buying French industrial group Dassault's stake in the firm.

Thales was also supported by news it had signed a $120 million deal to provide flight decks for Russia's Sukhoi Civil Aircraft while it also said it was cooperating on the modernisation of Dassault combat aircraft.

The A380, the world's largest airliner, was set to take centre stage at Paris but EADS shed 0.3 per cent as Airbus shareholder BAE Systems said the plane was being delayed by systems problems.