FTSE in positive territory
The latest flurry of deal-making in the energy sector added impetus to the London market today and put it within striking distance of the 5900 barrier.
Utilities were camped high on the risers board as investors speculated that the wave of consolidation among European rivals – led by today’s £47m (€69m) arranged marriage of French energy firms Suez and Gaz de France – would wash over to the UK.
Confirmation of an agreed £2.2bn (€3.2bn) deal for glass maker Pilkington was also fuelling excitement as the FTSE 100 Index advanced 24.6 points to 5885.1 by mid-morning.
Analysts said the Suez-Gaz de France merger and an offer from German firm E.ON for Spanish rival Endesa demonstrated that consolidation of European energy assets was in full swing.
With the UK utilities sector relatively fragmented, analysts talked up the possibility of bids in the near term.
International Power was the chief beneficiary in the sector, rising 8p to 293p to set the pace for Scottish & Southern Energy and Scottish Power – up 27.5p and 9p to 1184p and 594.5p respectively.
But gains by top-flight shares were capped by a decline by Vodafone after the mobile phone operator warned of slowing revenues growth and an impairment charge that could be as high as £28bn (€41bn).
Vodafone shares fell 3.25p to 113.75p and hit a new three-year low at one stage even though the company said its outlook for the current financial year remained unchanged.
Elsewhere, glass maker Pilkington rose 2.75p to 161.25p after shaking hands on a £2.2bn (€3.2bn) takeover by Nippon Sheet Glass, the Japanese firm that is also its biggest investor.
One of the heaviest fallers of today’s session was Maiden after the outdoor advertising group said none of the recent offers it had received were in line with its share price.
Maiden shares fell 44% or 28.5p to 36p after the company said it was reviewing other options and talking to its lenders.
