AOL deal good news for Euro tech, media stocks
Published: 11 Jan 2000 12:26 GMT
London-listed Internet and media shares surged Monday as the market came to terms with the news of AOL's all-share buyout of media giant Time Warner -- the biggest deal ever, and a resounding validation for the real value of Internet-related stocks.
Among the top 15 risers on the FTSE 100 index, only one was not media, software or telecoms related. More than £8bn was added to the value of media shares overall, while techMark, the exchange for high-tech companies, closed up 4.5 percent at 3654p.
Pearson (quote: PSON) and EMI Group, both content providers, were on top of the heap, climbing 15 percent each. Pearson closed up 261 at 1,962p, while EMI surged 90.5 to close at 683.5p. Pearson holds an extensive array of media content, in both the online and offline worlds.
They were closely followed by BSkyB (quote: BSY), up 112 at 1,011.5p, Reed, up 44.5 at 490.75p, and Granada, up 54 to 639.9p.
Industry observers said that Time Warner's readiness to accept AOL shares to close the merger would reassure many investors as to the real-world value of Internet shares. Many have criticised Net stocks as overinflated.
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