Mergers and Acquisitions Heat Up On Monday

Mergers and acquisitions activity was brisk on Monday, giving several stocks a lift as the M&A deals spanned several industries, including energy, and added to optimism about the prospects for growth in both corporate profits and the U.S. economy.

Shares of ServiceMaster jumped more than 12% after an investment group led by private quity firm Clayton, Dubilier & Rice agreed to buy the company -- whose businesses include pest control and lawn care -- for $4.7 billion.

Community Health announced it will acquire Triad Hospitals for $5.1 billion in cash.

"We think recent consolidation in the hospital group reflects challenging fundamental conditions that require greater scale, along with attractive debt financing costs," said S&P Equity Research analyst Cameron Lavey, in a research report.

Shares of oil and drilling services company Todco rose 20.9% to $39.66 after Hercules Offshore said it agreed to buy the company for $2.3 billion.

The deal "makes tons of strategic sense," analysts at Pickering Energy Partners said in a note to investors, with a "take-the-money-and-run" price for TODCO investors.

The Blackstone Group, along with The Carlyle Group and Riverstone Holdings, are mulling a rival offer for TXU , according to news reports. That could scupper a record-breaking $32 billion bid for the Texas power company from competing buyout firms.

Finally, Britain's Barclays confirmed that it was making an offer for Dutch bank ABN Amro , boosting financial shares in the wake of the subprime mortgage market turmoil.