* FTSEurofirst 300 up 1.7 pct, volatility sinks
* C.Suisse: 75 pct chance of a deal on Monday
* Telecoms outperform after Bouygues approach
* Greek shares up 6.7 pct
By Lionel Laurent and Atul Prakash
LONDON, June 22 (Reuters) - European shares hit their highest level in more than a week on Monday, anticipating some progress on Greece’s debt crisis after months of wrangling with international creditors.
The chief-of-staff to European Commission President Jean-Claude Juncker called the latest proposals from Greece a “good basis for progress”, while EU Economic Commissioner Pierre Moscovici said he was “convinced” agreement will be reached.
“We remain of the view that the most likely outcome (with a 75 percent probability) is a deal,” Credit Suisse analysts said in a note. “An unfortunate but predictable feature of European crisis decision-making is that such deals are only ever made at the last minute, ‘at the edge of the abyss’. That’s Monday.”
Greek stocks surged 6.7 percent, with the local banking sector jumping 17.8 percent. Investors have been nervous that deposit outflows may prompt capital controls.
“(Monday) promises to be a crazy trading session,” said IG strategist Chris Weston. Some 71 percent of all open trading positions held by IG clients are bets the German DAX index will rise, he said.
The pan-European FTSEurofirst 300 index was up 1.7 percent at 1140 GMT. The euro zone’s Euro STOXX 50 was up 2.7 percent and headed for its best one-day percentage gain since early January. The VSTOXX measure of European stock-market volatility slumped to its lowest level in 10 days.
Blue-chip indexes in London, Paris and Frankfurt were all up between 1.1 and 2.8 percent, with the telecoms sector outperforming after a takeover bid for France’s Bouygues Telecom reignited hopes for more corporate deals.
“Conditions are right for a further pick up in M&A activity as we are witnessing some positive factors such high corporate confidence and still cheaper lending. Rising average deal premiums are indicative of growing confidence in M&A deals,” James Butterfill, global equity strategist at Coutts, said.
According to Coutts data, the ratio of cash to total assets with STOXX Europe 600 companies is now about 4.5 percent, against a quarterly average of 2 percent since 1998 until the financial crisis in 2008, indicating that the M&A appetite of European companies remains strong.
Bouygues rose 14 percent after Monday’s confirmation of a takeover bid from Altice via its Numericable-SFR subsidiary, which itself rose 13.5 percent.
British broadcaster Sky gained 3.4 percent after the Sunday Telegraph reported that the Murdoch family was said to have rebuffed two offers for its stake.
Deal hopes also propelled UK chocolatier Thorntons’ shares up a whopping 42 percent after Ferrero International SA offered to buy the company at a premium of about 42.9 percent to its closing share price on Friday. (Editing by Catherine Evans/Ruth Pitchford)