European Stocks Gain as Sainsbury, BT Climb; Asian Shares Rally

By Sarah Jones

European stocks climbed for a second day after SAP AG announced a $5.8 billion acquisition and earnings from J Sainsbury Plc and BT Group Plc beat analysts’ estimates. Asian shares advanced.

Software AG and Cap Gemini SA advanced at least 1.5 percent as SAP, the world’s biggest maker of business-management software, agreed to buy Sybase Inc. Sainsbury rose 2.6 percent after the supermarket chain more than doubled profit. BT, the U.K.’s largest phone company, surged the most since July.

The benchmark Stoxx Europe 600 Index increased 0.4 percent to 257.5 at 9:45 a.m. in London. The measure has rallied 8.5 percent this week after the European Union unveiled a 750 billion-euro ($949 billion) financial assistance package aimed at stopping the region’s fiscal crisis from spreading and the U.K. and Spain pledged to shrink their budget deficits.

There is a “good fundamental backdrop that is producing the earnings that we are now seeing,” Mike Lenhoff, who helps oversee about $35.5 billion as chief strategist at Brewin Dolphin Securities Ltd. in London, said in a Bloomberg Television interview. “It’s coming through in terms of top-line growth and it is one of the reasons that markets are now responding as they are.”

In Asia, the benchmark MSCI Asia Pacific Index jumped 1.7 percent, led by computer-related companies after earnings from Tokyo Electron Ltd. to Tencent Holdings Ltd. boosted confidence in the industry. Futures on the Standard & Poor’s 500 Index were little changed before a report on U.S. jobless claims.

SAP Acquisition

Software AG, Germany’s second-largest software maker, climbed 3.2 percent to 88.69 euros after SAP agreed to acquire Sybase to help it fend off competition from Oracle Corp. Cap Gemini, Europe’s biggest computer-services company, rose 1.5 percent to 39.92 euros.

Sybase shareholders will receive $65 a share, 56 percent higher than the closing price of $41.57 on May 11, before the deal discussions became public. Sybase, the maker of the Sybase IQ database management software, soared 35 percent yesterday on the New York Stock Exchange, its biggest one-day gain since the company sold shares to the public in 1991. SAP shares slipped 2.5 percent to 35.16 euros today.

Sainsbury climbed 2.6 percent to 336.4 pence after the U.K.’s third-largest supermarket chain said profit more than doubled to 585 million pounds ($870 million) as it added convenience stores to win shoppers and attributed a higher value to its property asse

Sainsbury Earnings

Pretax profit, excluding one-time gains and losses, increased 18 percent to 610 million pounds, beating the median 598 million-pound estimate in a Bloomberg survey of analysts.

BT soared 8.6 percent to 130.8 pence, the biggest intraday jump since July 30. The phone company said fourth-quarter operating profit rose 16 percent to 1.53 billion pounds, boosted by job cuts. Operating profit had been estimated at 1.44 billion pounds on revenue of 5.17 billion pounds, according to a Bloomberg survey.

DSG International Plc advanced 7.8 percent to 30.5 pence, the most since November, after the owner of Currys and PC World stores reported an 8 percent gain in underlying group sales. The company also said it has a new revolving credit facility.

3i Group Plc soared 6.5 percent to 285.7 pence after Europe’s largest publicly traded private-equity firm reported a greater-than-estimated increase in value of its holdings. Net asset value per share climbed to 321 pence at the end of March from 279 pence a year earlier.

Credit Agricole SA declined 1.7 percent to 10.49 euros. France’s largest bank by branches reported first-quarter net income of 470 million euros, missing the median estimate of 511 million euros in a Bloomberg survey.

A U.S. Labor Department report at 8:30 a.m. in Washington may show initial claims for jobless benefits fell by 4,000 last week to 440,000, according to a Bloomberg survey of economists.