Takeover buzz on FTSE as shares hold ground
Takeover talk was fuelling London shares again today as the FTSE 100 Index held ground above the key 5000 barrier.
The Footsie looked set to close at its highest level since June 2002 after tobacco firm Gallaher rose on speculation that Japan Tobacco was mulling a bid.
The owner of the Silk Cut and Benson & Hedges brands lifted 20p to 857p, making it the session’s second biggest climber and helping the Footsie move 24.1 points higher to 5024.1 by lunchtime.
It added to the momentum gained by the market in the past couple of weeks following a series of takeover moves.
Stocks also extended their rally following the example of Wall Street, which chalked up its best performance of the year.
But analysts were not expecting a repeat show of strength stateside this afternoon after computer maker Dell said a tax charge in its most recent quarter had caused its profits to fall.
The update from Dell weakened confidence in Sage Group – the last remaining technology stock on the Footsie – and its shares faded 0.75p to 206.75p this morning.
It was a quiet day on the London markets after yesterday’s healthy flow of corporate news, with the latest research notes by brokers driving stock movements.
Publishing group Reed Elsevier fell 2p to 494.25p after it was downgraded to ‘hold’ by ABN Amro.
Steel maker Corus moved the other way – up 2.25p to 59.75p – after CSFB said the consensus view that steel prices will fall in the second half of 2005 was wide of the mark and the stock was one of the picks in the sector.
Shares in Scottish radio and television group SMG were near the top of the FTSE 250 Index after rejecting a £100 million offer from investment group 3i and Lord Alli for Virgin Radio. SMG climbed more than 4% or 4.75p to 109p.
FTSE Smallcap stock Uniq provided the other main news, saying a £100 million black hole in its pension plan had caused almost all potential bidders to abandon their interest in the company.
Investors recoiled at the news and forecasts of lower profits in its next financial year, sending Uniq’s shares down nearly 11% or 19.5p to 162.5p.
AIM-listed publisher and media group Huveaux was another heavy faller after revealing full-year profits would be below market expectations. Shares lost 17% of their value, off 11.5p to 54.5p.
