U.S. News

European Stocks to Watch: Reuters

By CNBC.com

Reuter’s shares rose 2.4% in morning trading Tuesday after the company confirmed details of merger talks with Canadian financial data and news provider Thompson.

The Canadian company would buy Reuters for about 8.8 billion pounds ($17.6 billion) and create the world’s biggest news and financial data company.

Thomson would pay 352.52 pence a share in cash and swap 0.16 share of its own stock for each share of Reuters. Based on Monday's close, the deal values Reuters at 697 pence a share ($14), about a 13% premium from Reuters' closing price.

According to a joint statement Tom Glocer, the CEO of Reuters would become the new CEO of the combined group.

Also Active in European Trading:

Suez(up 1%) German bank WestLB cut Suez to "reduce" from "hold" and raised Gaz de France to "hold" from "reduce," speculating on a merger between the two companies, Reuters reported.

WM Morrisons (up 3%) Evolution raised its target price for the British retailer to 340 pence from 315 pence, citing positive trading and the fact that investors are realizing property adds value to its business.

Home Retail Group (up 4.1%) Shares of Home Retail Group rose after traders told Dow Jones that the group is seen as a good bid candidate and is frequently linked to takeover speculation.

Adidas (up 6.2%) The German athletic apparel and sporting goods maker reported a first-quarter net profit drop of 11%, but the company was optimistic about second-quarter earnings.

HMV Group (up 7.4%) HMV’s shares rose on speculation that a private equity group might bid for the company, amidst a recent surge of M&A activity in the media industry.

SwissRe (down 2.3%) Shares of the Swiss reinsurer fall despite posting a forecast beating $1 billion profit in the first quarter. Investors remained cautious after the sale of its London office boosted numbers.

KPN KON (down 2.9%) The Dutch telecom group reported a 1.4% fall in first-quarter earnings.

Clariant (down 2.8%) Net profit at the Swiss chemicals company fell 11% in the first quarter on rising raw-material and restructuring costs.

EasyJet (down 6.7%) EasyJet is expected to report a first-half pretax loss of around 35 million pounds ($69.7 million) compared to a loss of around 40 million pounds a year ago, three analysts told Dow Jones Newswires. The British low-cost airline also said on Tuesday that its revenue per seat had fallen in April, causing shares to fall.

Altana (down 11.8%) Altana’s shares fell sharply due to profit taking on Friday. Sal Oppenheim cut the German chemicals firm to “buy” from “strong buy”, while Deutsche Bank cut its price target to 17.20 euros from 50 euros and Bear Sterns cut it to “peer perform” from “outperform” for valuation reasons.