European Stocks to Watch: E.ON

Shares in the world’s largest utility E.ON increased considerably after it gave up its 42 billion euro bid ($56 billion) for Spanish utility company Endesa (down 0.69%), agreeing to split it up with rivals.

E.ON’s shares rose 6.91% to 109.17 euros as the DAX’s leading gainer early Tuesday.

The German company announced Monday night that it expected its bid for a majority stake in Endesa to fail.

It eventually agreed with Endesa’s largest shareholders, Italy’s Enel (up 1.80%) and Spain’s Acciona (up 4.05%), to instead obtain power plants and other energy assets in Spain, France and Italy worth 10 billion euros ($13.36 billion).

Also active in European trading:

Folli-Follie (up 9.99%) Shares of the Greek jewellery retailer rose in Athens after Goldman Sachs rated the stock “buy” and estimated it at 40.50 euros a share within the next 12 months.

Union Fenosa (up 4.18%) Spanish power company Union Fenosa’s shares soared on market speculation that Germany's E.ON may bid for the company now it has given up trying to fully take over Endesa.

Continental (up 3.66%) The automotive supplier and tyre-maker’s shares increased on Tuesday on market rumors of a takeover offer from a private equity company.

Scottish & Southern (up 1.99%), International Power (up 2.06%) Power and utilities companies’ shares were buoyed by the news that E.ON has given up its bid to buy Endesa.

Kazakhmys (up 2.60%) and Xstrata (up 2.54%) Mining stocks are up from higher copper prices.

Alitalia (up 2.23%) Russian carrier Aeroflot has pledged to finance 95% of a possible bid with Italy’s UniCredit for the failing Italian airline.

Technical Olympic (down 1.17%) Shares of the Greek company fell lower after Moody’s Investors Service lowered all of the ratings of its U.S. subsidiary unit Technical Olympic USA. The company was downgraded on Moody’s expectations that its operating performance for 2007 and 2008 will be affected by the weak conditions in the homebuilding industry.