* FTSEurofirst 300 index <> ends up 1.8 percent
* Bank index up 3.2 percent on Lehman
* Buffett comments on stocks lifts sentiment
By Jeremy Gaunt
LONDON, Aug 22 (Reuters) - European stocks ended sharply
higher on Friday, lifted by a rebound in financial shares on the
prospect that U.S. investment bank Lehman Brothers <LEH.N> might
be bought, while oil eased to around $118 a barrel.
Influential U.S. investor Warren Buffett also boosted
sentiment by saying that stocks looked more attractive now than
they did a year ago.
The pan-European FTSEurofirst 300 index <> ended up
1.8 percent at 1,175.79, ending some 1.2 percent down on the
week.
State-run Korea Development Bank [] said Lehman was
one of its options for acquisitions, reviving expectations that
the U.S. investment bank might still bring in a large investor.
The news comes after a newspaper reported on Thursday that
Lehman sought to sell up to a 50 percent stake to China's
biggest brokerage, CITIC Securities <600030.SS>, or to KDB. But
the two Asian companies walked away after deciding the asking
price was too high.
"There is hope now that the financial crisis is not that bad
after all and that we will all be rescued," one trader said.
The DJ Stoxx banking index <.SX7P> rose 3.2 percent after
falling 6.3 percent in the past five sessions.
Natixis <CNAT.PA> gained 7.4 percent, HBOS <HBOS.L> was up
6.3 percent and HSBC <HSBA.L> rose 2.6 percent.
Around Europe, the UK's FTSE 100 index <> was up 2.5
percent, Germany's DAX index <> rose 1.7 percent and
France's CAC 40 <> added 2.2 percent.
Buffett helped things along by saying that although he did
not expect the U.S. economy to be any better five months from
now, stocks are a better deal than they were.
"Let's hope he is right. Most of us think he is. The bulls
would agree on his comments about valuations," said Mike
Lenhoff, chief strategist at wealth managers Brewin Dolphin.
BIDS
Among individual movers, shares in TNT NV <TNT.AS> surged
6.9 percent after London's Times newspaper reported rumours that
U.S. rival United Parcel Service <UPS.N> could make a bid as
early as the weekend. TNT declined to comment.
Insurance shares traded higher after Aon Corp <AOC.N>, the
world's largest insurance broker, made a recommended cash offer
for Benfield <BFD.L> valuing the UK-listed broker at 844 million
pounds ($1.6 billion).
Benfield shares shot up 27.5 percent, while Axa <AXAF.PA>
rose 4.8 percent and Allianz <ALVG.DE> rose 3.1 percent.
Oil eased to around $118 a barrel, a day after its biggest
jump in three months as part of a wider commodities rally
spurred by a slump in the U.S. dollar, and tension between the
United States and Russia.
Mining giant Rio Tinto <RIO.L> shares shrugged off early
losses after Australia's antitrust regulator said the $128
billion bid from rival BHP Billiton <BLT.L> could raise
competition issues in iron ore.
Rio Tinto shares were up 0.7 percent, while BHP added 1.7
percent.
Shares in Hochtief <HOTG.DE> rose 8.5 percent as traders
cited a magazine report which said that Hochtief's two major
shareholders -- Spanish builder ACS <ACS.MC> and Russian
billionaire Oleg Deripaska -- are considering breaking up the
German construction company.
The rise came despite denials from ACS.
(Editing by Rory Channing)
