Attention was focused on Frankfurt yesterday as a stream of acquisition news caused steep price fluctuations. Deutsche Telekom plunged to its lowest level since last December after confirming a $50.7 billion (€54.38 billion) bid for Voicestream Wireless of the US.
While some analysts believed the high premium paid for the US operator was justified by the strategic benefits, the market was less convinced.
Compounding a fall of around 9 per cent last week, Deutsche Telekom plunged 8.8 per cent, trading €4.87 lower at €50.40 by 5.30 p.m.
Investors were equally dismayed at retailer Metro's denial of a takeover bid from Wal-Mart, the US retail group.
Metro's share price plunged more than 13 per cent at one point, as its major shareholders moved to silence the takeover rumours. By 5.30 p.m. Metro was trading €3.34, or 7 per cent, lower at €43.86.
Financials generally performed well, with the exception of HypoVereinsbank, which fell €3.30 to €64.90 after it said it would acquire Bank Austria, Austria's largest bank, through a share swap. Shareholders will be offered a 34 per cent premium.
Shares in DaimlerChrysler were €1.58 lower at €57.48 following reports, denied by the company, that it would issue a profit warning when it announced its second-quarter results tomorrow.
By 5.30 p.m. the Xetra DAX index was 28.35 lower at 7,344.91. The blue-chip index received some support from the new economy as SAP gained €5.48 to €253.10 and Siemens €5.15 at €180.15.
Paris started the week in a dull mood, with the CAC-40 index 0.6 per cent higher at 6,502.57. The automotive sector rallied ahead of Peugeot's first-half results, due after the market closed. Peugeot ended up 3.5 per cent at €236.80 and Renault, whose results are out on Thursday, was up 4.8 per cent at €49.15.
France Telecom resisted downward pressure for most of the day from Deutsche Telekom's slump, but finally slipped to end 0.8 per cent off at €141.40.
Telecom company Equant fell 3.4 per cent to €43.25 after a report that merger talks with France Telecom had ended.
Total Fina Elf rose 1.6 per cent to €159 as oil prices stabilised after Kuwait dismissed talks of a substantial output increase by OPEC.
In Amsterdam the AEX index closed 4.6 higher at 683.57. Telecom stocks rose sharply after the results of the third-generation mobile phone licence auction.
