LONDON, Feb 12: European stock exchanges dropped on Monday, despite huge gains for some shares and notably British group MyTravel which soared 30 per cent after announcing plans to merge with German rival Thomas Cook.

Markets were weakened overall by a poor showing by Wall Street on Friday, dealers said.

In London the FTSE 100 index dropped 0.38 per cent to 6,358.50 points, in Frankfurt the DAX 30 slid 0.78 per cent to 6,857.34 points and in Paris the CAC 40 dropped 0.70 per cent to 5,652.86.

The DJ Euro Stoxx 50 index of eurozone blue chip shares lost 0.73 per cent to 4,217.31 points.

The euro stood at 1.2995 dollars. US stocks had closed with a fall on Friday after three Federal Reserve officials warned about possible interest-rate rises to keep inflation in check, while high oil prices also dented sentiment, dealers said.

In London on Monday, the share price of MyTravel surged by as much as 30 per cent in early deals. It later stood up 27.42 per cent at 303.25 pence, topping London's second tier FTSE 250 index.

MyTravel announced that it is to merge with Thomas Cook, the second-biggest European travel group. Thomas Cook owner KarstadtQuelle jumped 4.16 per cent to 27.29 euros in Frankfurt.

Following the deal, to be completed by June 2007, KarstadtQuelle will own 52 per cent of the new group and MyTravel the remainder.

The deal is conditional on the approval of MyTravel shareholders, competition clearances and the sale of Lufthansa's 50-per cent stake in Thomas Cook to KarstadtQuelle.

Lufthansa declined 1.00 per cent to 21.81 euros. Rivals to MyTravel and Thomas Cook tumbled meanwhile. In London, First Choice dived 16.38 per cent to 255.26 pence and Europe's leading tourism group TUI shed 1.38 per cent to 17.13 euros in Frankfurt.

Away from the travel sector, Vodafone jumped 1.91 per cent to 152.10 pence after the British mobile-phone giant's purchase of a $11.1-billion controlling stake in India's Hutchison Essar.

Vodafone, the world's largest mobile phone operator, announced Sunday that will pay the equivalent of 8.5 billion euros to acquire Hong Kong-based Hutchison Whampoa's 67 per cent stake in Hutchison Essar.

Another major takeover story occurring over the weekend involved the Nasdaq's failed bid for the London Stock Exchange.

On Monday the LSE fell 1.33 per cent to 1,265 pence, two days after the US stock exchange operator Nasdaq saw its hostile takeover bid worth 2.9 billion pounds (4.4 billion euros, $5.5 billion) overwhelmingly rejected by LSE shareholders.

The London Stock Exchange meanwhile said Sunday that an agreement would be reached “in the near future” on a strategic alliance with its Tokyo counterpart.—AFP