Shares in Paris closed slightly higher following mixed signals from the US, with technology stocks again benefiting most. The CAC-40 index rose 49.76 or 0.8 per cent to 6,554.92.
The big share price movements on the CAC were in Vivendi and Canal Plus, both of them downwards, after they announced details of the Seagram deal. Since news of the talks emerged, Vivendi has fallen while Canal Plus has gained. But yesterday Canal was the bigger loser, falling 12 per cent to €178.60 while Vivendi fell by 8.7 per cent to €88.10.
Traders said investors were concerned at possible dilution of earnings at both companies as well as Canal's status and prospects in the new group.
However, Canal's film production unit StudioCanal rose 5.5 per cent to €13.50 as traders judged it would benefit from being pooled with Seagram's Universal Studios.
For other TMT stocks the day ended strongly thanks to another positive Nasdaq start. Alcatel was up 3.9 per cent to €71, STMicroelectronics up 6.1 per cent to €71.75 and Cap Gemini up 3.8 per cent to €212.50.
On the broader market, advertising company Publicis fell more than 12 per cent to €418 after it announced details of its acquisition of Saatchi & Saatchi.
Frankfurt saw a strong run for selected technology leaders and pushed higher for the second day running.
Infineon Technologies tracked the strong overnight showing for US chip makers, advancing €4.70 or 5.8 per cent to €88 - a high for the year. SAP gained €39.20 at €662.20 and Siemens put on €4.75 at €164.
Epcos, hit by a broker downgrade late last week, stayed out of favour. The shares lost €4.30 at €130.70. Deutsche Telekom continued to suffer stock overhang concerns, dipping a further 19 cents at €65.61.
Potential merger partners Commerzbank and Dresdner Bank met with selling. The two banks, which on Monday announced exploratory talks, came off €1.34 at €39.41 and 51 cents at €44.19 respectively.
Karstadt Quelle's five-month trading statement disappointed and the shares lost €4.37 at €34.18. Lufthansa rose 73 cents to €25.28 for a two-day gain of 5 per cent.
The Xetra DAX index was up 31.37 at 7,230.17 at 5.30 p.m. German time.
Amsterdam gained 4.81 to 682.00 on the AEX index, with a 6 per cent advance at Philips providing much of the upside drive.
Philips surged €3.10 to €55 in 20.7 million shares traded following disclosure of the price Vivendi is paying for Seagram. Philips has an 11 per cent stake in Seagram.
