PARIS (Thomson Financial) - Share prices were higher at lunchtime, lifted by overnight gains on Wall Street as well the news that Kraft Foods has offered a higher than expected 5.3 bln eur to buy the biscuit division of Groupe Danone, market sources said.
At 1.19 pm, the CAC-40 index was up 48.90 points or 0.81 pct at 6,075.85 on volume of 2.4 bln eur.
On the Matif, July CAC-40 futures were trading up 0.79 pct at 6,085.50.
The euro was at 1.3621 usd, against 1.3631 late yesterday.
Danone was up 1.23 eur or 2.02 pct at 62.18, after being suspended briefly this morning ahead of the group's announcement that it is in talks to sell its biscuit and cereals operations to Kraft for 5.3 bln eur.
'The price seems rather good,' said an analyst who follows Danone, adding that the French group would also hang on to its business activities in Latin America and India, 'which also seems to be very attractive as these are growth areas'.
Asked about Danone's next steps, chief executive Franck Riboud said this group has acquisition targets but will give no details until it decides to go ahead with an operation.
Regarding Russian partner Wimm Bill Dann, in which Danone recently increased its holding to 18.6 pct, Riboud said it is one of the group's 'strategic axes', but repeated that he will only talk about raising Danone's stake 'when the time comes, if it comes up'.
In other mergers and acquisitions news, Valeo fell initially after the car parts maker admitted it received no acceptable takeover bids from investment funds by yesterday's deadline.
But the shares recovered, trading up 0.33 or 0.84 pct at 39.59 at lunchtime, with analysts at Kepler Equities underlining that the news was 'largely expected'.
The broker, which kept its 'buy' rating and 49 eur target price, said the market will turn its focus back to 'operating recovery and probable portfolio reshuffling'.
Valeo said it will now 'concentrate on its strategy of value creation' via 'disposals and targeted acquisitions'.
Rival parts maker Faurecia, meanwhile, was lifted by the newsflow, rising 1.66 or 2.74 pct to 62.18.
Still in the auto sector, Renault -- up 2.45 or 2.07 pct at 120.65 -- and Peugeot -- up 1.10 or 1.84 pct at 60.99 -- moved higher as investors again looked beyond weak monthly sales to focus on the prospects for new models.
Renault's new car registrations fell 13.5 pct last month compared to a year earlier, while Peugeot recorded a 1.4 pct decline, according to figures from car manufacturers' association CCFA.
But Renault reassured the market yesterday by stating that orders for the new version of the Twingo, launched on June 15, are ahead of expectations, while also indicating plans to manufacture 40,000 low-cost Logans at its factory in Brazil this year, rising to 60,000 in 2008.
Elsewhere, Areva saw profit-taking, dropping 7.89 or 0.97 pct to 805.87, after it said it is studying a uranium enrichment project in the US worth 2 bln usd, confirming a report in Les Echos.
Le Figaro, meanwhile, reported that Areva and Bouygues -- up 0.51 or 0.82 pct at 62.63 -- are studying industrial cooperation involving a joint commercial offering of the two companies' skills in civil engineering and nuclear reactors.
Bouygues, which has said it is interested in Areva, has been the object of regular rumours about a move for the nuclear power group, possibly in alliance with Alstom -- up 2.42 or 1.94 pct at 126.98 -- in which Bouygues has a 25 pct stake.
Other strong risers included PPR -- up 3.89 or 3.05 pct at 131.60 -- which rebounded from yesterday's drop, and Axa, which climbed 0.78 or 2.47 pct to 32.42 amid a general rally among insurance stocks in Europe.
Outside the CAC-40, airport operator ADP, which has jumped over 50 pct so far this year amid speculation of a further privatisation sale by the French government, added another 3.19 or 3.68 pct to 89.84.
Airline Air France-KLM, meanwhile, was one of the few fallers, down 0.50 or 1.46 pct at 33.84, amid continuing concerns about terrorism following the narrowly averted attack on Glasgow airport in the UK.
Alcatel-Lucent rose 0.17 or 1.63 pct to 10.62. The group was boosted by a fresh batch of contracts, including an order from China Unicom to provide IP routing equipment as the basis of a nationwide network update.
EADS was slightly behind the market, rising 0.08 or 0.33 pct to 24.06.
German government sources said France and Germany are not close to abolishing the dual governance structure of EADS, rejecting an earlier report in Les Echos.
The daily had claimed the two governments will likely make an announcement to that effect on July 16 when Nicolas Sarkozy and Angela Merkel meet in Toulouse. tfn.paris@thomson.com mrg/ejb/gt/dca COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
© 2007 AFX News
