Shares in Diageo rise on bid speculation

European shares fell on Monday, weighed down by a drop in agrochemicals group Syngenta although Deutsche Bank outperformed to surge higher after boardroom changes.

Bid speculation also lifted the shares of drinks group Diageo and Swiss biotech company Actelion, following reports that Shire might bid for Actelion and that a Brazilian billionaire was eyeing Diageo.

The pan-European FTSEurofirst 300 index fell 0.3 per cent while the euro zone's blue-chip Euro STOXX 50 index also retreated 0.4 per cent. European equity markets came under pressure after a rise in German bund yields on Monday, as higher yields can often result in increased debt payments for companies. Syngenta was among the worst performers, slipping 1.3 per cent after it rejected a second takeover proposal from agrochemicals firm Monsanto.

Deutsche Bank rose 7.1 per cent after the company purged its leadership on Sunday, appointing Briton John Cryan as chief executive to replace Anshu Jain just two weeks after Jain was given more power to reorganise the bank.

"The changes had to be made. There may be some short-term volatility with the share price but, all in all, it should be a positive for the stock," said JNF Capital investment manager Edward Smyth.

Diageo also climbed 7 per cent after a media report that Brazilian billionaire Jorge Paulo Lemann and his partners in private equity firm 3G Capital were considering a potential bid.

Actelion touched record highs after the Sunday Times reported that pharmaceutical company Shire was considering a £12 billion pound takeover of Actelion. Shares in Shire fell 2.2 per cent. Both Actelion and Shire said they did not comment on market speculation.

Reuters