By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks advanced Wednesday, with
drug-sector heavyweight Roche Holding AG higher on an acquisition
move, but a potential tie-up involving French telecommunications
firm Orange SA was shelved, pressuring its shares.
The Stoxx Europe 600 index picked up 0.4% at 346.21, looking for
a second consecutive win. It closed Tuesday's session higher by
0.9%, the strongest percentage rise in two months, according to
FactSet data.
Stock in Roche tacked on 0.5% after the Swiss drug company said
it would buy privately held U.S. biotech firm Seragon
Pharmaceuticals for up to $1.725 billion. Seragon researches
breast-cancer treatment. Under the agreement, Genentech -- part of
Roche Group -- will pay $725 million up front in cash, plus up to
an additional $1 billion based on performance of "certain
predetermined milestones." The deal is expected to close in the
third quarter.
Elsewhere in the pharma group, shares of AztraZeneca PLC rose
1.3%, extending Tuesday's gains after Chief Executive Pascal Soriot
spent GBP2 million ($3.4 million) to raise his stake in the British
company.
AstraZeneca aided in pushing the U.K.'s FTSE 100 up 0.3%.
Meanwhile, June construction figures showed expanded strength in
the sector, topped by residential house-building. The pound
(GBPUSD) rose against the U.S. dollar to $1.718 compared with
$1.715 late Tuesday.
Wading near the bottom of the Stoxx 600 was Orange , with shares
dropping 3.2% after the telecoms company ditched its pursuit of a
potential merger or acquisition in France. After examining
possibilities that would lead to consolidation in the French
telecoms market, Orange said it "believes that it cannot pursue
this avenue at the present time as the conditions that the group
has set have not been met."
In recent weeks, Orange was reported to be in talks to acquire a
stake in Bouygues Telecom amid a push by the French government for
telecom-sector consolidation. Bouygues SA ,shares fell 3.1%. Shares
of Iliad SA , which had previously put up a bid for the Bouygues
unit, were down 3.9%.
But on the winning end, shares of Alcatel-Lucent were pushed up
4.4% after the telecommunications-equipment maker's rating was
raised to overweight from neutral at J.P. Morgan Cazenove. "With
the restructuring proceeding at a faster pace than guided
originally and the stock having pulled back because some investors
have taken profits, not because progress has stalled, we upgrade
the stock to overweight," wrote analyst Sandeep Deshpande.
France's CAC 40 equity index reversed course and rose less than
1 point. Germany's DAX 30 gained 0.3% to 9,926.76.
Off major indexes, shares of Mothercare PLC rose nearly 12%
after the British children's products retailer said it recently
turned down a GBP266 million ($456.5 million) acquisition offer
from Destination Maternity Corp. (DEST) . Philadelphia-based
Destination Maternity's brands include A Pea in the Pod.
Mothercare's board said the bid "significantly undervalued
Mothercare and its attractive prospects," and the proposal was
rejected on May 29.
More must-reads from MarketWatch:
How analysts fared by stock and sector in the first half of
2014
Caterpillar, Disney: Dow stocks that helped most in march to
17,000
New TSA fees to make airfare more expensive
Subscribe to WSJ: http://online.wsj.com?mod=djnwires