Europe midday: Shares extend gains; Ubisoft surges, Bakkafrost sinks

European shares surged on Tuesday after a rally in Asia, while Ubisoft shares jumped after Microsoft submitted a new plan for its planned Activision takeover to appease British competition authorities.

The pan-European Stoxx 600 index extended gains to be 1.17% higher at midday, with all major bourses higher.

In economic news, UK government borrowing came in at £4.3bn, lower than the £5bn expected by economists.

In equity news, shares in Ubisoft surged as Microsoft offered a new deal on its long-running attempt to buy computer games maker Activision in an effort to gain approval from UK competition authorities.

The US software and tech giant on Tuesday said Activision would sell its non-European streaming rights to Ubisoft Entertainment as part of the new offer.

"The CMA has been arguably the staunchest opponent of the acquisition among regulators worldwide citing its concern that the deal will severely restrict competition in the growing cloud gaming market, where users take out subscriptions to stream games, rather than buying them off the shelf," said Hargreaves Lansdown analyst Susannah Streeter.

"We won’t know until the beginning of October if these stringent new rules will allow Microsoft to leap over this latest British regulatory hurdle, but it certainly seems as though significant compromise may have been reached. With other barriers to the deal in the EU and the US now overcome, Microsoft is eyeing up the home stretch, but there is no guarantee another obstacle won’t be hurled in its path.’’

BHP Group, the world’s biggest miner, was lower as annual profits fell 37% from a year earlier as higher costs and a tight labour market in Australia hit earnings.

Bakkafrost shares plunged after the salmon farming giant posted second-quarter earnings in line with the profit warning issued several weeks ago and said farming operations in Scotland experienced higher mortality levels towards the end of the period which may affect this year’s harvest.

Reporting by Frank Prenesti for Sharecast.com