ITV interest pushes FTSE higher
Confirmation of bid interest in broadcaster ITV drove the London market higher today ahead of the Budget statement by Chancellor Gordon Brown.
ITV revealed that it has rejected a proposal from a consortium featuring private equity firms Blackstone and Apax Partners because it would load the company with debt and was not in the interests of all shareholders.
Other rumoured corporate activity involving chemicals giant ICI and Argos owner GUS was also exciting traders as the FTSE 100 Index reversed early losses to stand 5.1 points ahead at 5996.4 by mid-morning.
But the direction of the market could change again if there are any shocks in the Budget speech by the Chancellor when he rises to his feet in the House of Commons this afternoon.
ITV took centre stage with a 7.75p gain to 124.75p as the City took the view that managers at the broadcaster would now have to work harder to please investors, possibly by increasing its planned programme to buy back shares.
Many analysts agreed that ITV was justified in rejecting the approach from the consortium, which appeared to be keen to avoid paying a premium for full control.
ITV was tracked on the Footsie risers board by ICI which gained 6% or 19.75p to 365.5p on talk of interest from US rival DuPont, although some analysts felt a pensions deficit of £1.5 billion might scare any predator off.
The market was also confident that Argos owner GUS could field more approaches from US-based private equity firms for its Experian unit after it was reported that US-based firms Bain Capital and Thomas H Lee recently had a £7 billion proposal rebuffed. GUS improved 3% or 38p to 1130p.
But investors trimmed positions in the insurance sector after an exciting start of the week saw Prudential shares shoot up in the wake of its rejection of a £17 billion merger plan with rival Aviva.
Prudential faded 14.5p to 727p today and Aviva eased 7.5p to 822.5p - mirroring the rest of the sector where Legal & General dipped 2.75p to 142.25p and Friends Provident weakened 0.25p to 216.25p.
