Diageo leads FTSE upwards
Drinks giant Diageo led the London market higher today after news that Pernod Ricard’s proposed acquisition of Allied Domecq would allow it to cherry-pick key brands.
The world’s number one spirits company saw its shares advance 2%, up 17.5p to 805p, after last night’s announcement that it may buy most of Allied’s Montana wines if the Pernod bid was successful.
Diageo also revealed that it would pay Pernod £200m (€297.7m) for Bushmills, the second-biggest brand of Irish whiskey, under the plans.
The stock was the highest top flight climber, contributing to the FTSE 100 Index rising 13.7 points to 4994.1 by mid-morning.
However, the index failed to hold on to bigger gains that took it beyond the key 5000 level earlier in the session.
Mobile phone operators were in positive territory after regulator Ofcom paved the way for firms to maintain current charges for calls between different firms.
O2 led the way with a gain of 1.25p to 123.5p while Vodafone was 0.75p higher at 136.5p.
Utility group Severn Trent lost 15p to 994p despite saying its businesses were in “good shape” and reporting annual profits in line with market expectations.
Elsewhere, retailers were in focus after the British Retail Consortium warned of a “consumer-led recession”. It said like-for-like sales on the high street fell 2.4% last month.
B&Q owner Kingfisher was the worst affected retailer with a drop of 1%, down 2.75p to 256.25p, while Next weakened 8p to 1459p.
Woolworths highlighted the poor trading conditions with a 4.4% sales fall today, although the company’s 0.5p share price drop to 34p was more a reflection of its statement that it would not be returning cash to shareholders.
Carphone Warehouse was lifted by news of a 34% hike in annual pre-tax profits to £102.1m (€152m), sending its shares 0.75p higher to 166.75p.
