STOCKS NEWS EUROPE-Italy's Eurofly takes off on merger OK

Italy's Eurofly SpA (EEZ.MI) is up 16.4 percent after the airline's board approved a merger with majority shareholder Meridiana SpA.

"We're dealing with speculative purchases, I don't think they are going to leave a trace," says a trader.

The merger plan calls for transfer of Meridiana's air transport activities to Eurofly, which increases its capital by 52.6 million euros. A 40 million euro rights issue will take place after the merger.

Meridiana owns 60.7 percent of Eurofly.

Reuters Messaging rm://francesco.segoni.reuters.com@reuters.net