MILAN: Dealmaking activity drove sharp share price moves in Europe on Friday with British engineer GKN leaping after it rejected an unsolicited offer from rival Melrose.

A gain of around 20 per cent in GKN and strength in the auto sector drove the STOXX 600 index up 0.1 per cent by 0814 GMT, helping the pan-European benchmark recover part of the losses suffered in the previous session.

GKN set out plans to split into separate aerospace and automotive businesses after rejecting the bid from Melrose, which follows problems at GKN's U.S. business making aircraft components

Kering briefly hit a record high after the French luxury goods group announced plans to spin off German sports brand Puma to its shareholders to focus squarely on its more upmarket brands.

Puma slumped 12 per cent, while Kering reversed course and was down 0.8 per cent. Minority Puma shareholders had been hoping for a tie-up between Puma and another industry player rather than a spin-off, one trader said.

Elsewhere, earnings updates drove price action.

Vivendi fell 3 per cent after the acquisitive media conglomerate lowered its 2017 full-year guidance for core operating profit and revenues, penalized by higher restructuring costs tied to its pay-TV unit Canal Plus.

Danish food ingredients developer Chr Hansen fell 6 per cent, leading losers on the STOXX, after first-quarter results fell short of analyst estimates.

Autos were the biggest sectoral gainer, up 1.4 per cent, boosted by GKN and a rise to a fresh record high for Fiat Chrysler, which has been recently supported by fresh speculation of possible strategic deals.