Solid session for FTSE
Developments in two long-running takeover sagas caught the eye of investors during a solid session for the beleaguered London market today.
BAA shares fell 6% after a potential takeover by Ferrovial was complicated by the surprise news of a possible regulatory inquiry into the airports sector.
Investors need merger and acquisition activity to stimulate the market, but still took today’s blow in their stride as the FTSE 100 Index rose 12.4 points to 5599.5 by mid-morning, as traders drew breath after days of volatility.
The FTSE 250 Index fared less well, hitting negative territory as investors took the view that US exchange Nasdaq faced a clear run for the LSE.
LSE shares fell 9%, or 113p to 1076p, even though it posted “outstanding” full-year results with operating profits up 42% to £120.1m (€176m).
For BAA, shares eased 49.5p to 784.5p as the company also posted a robust defence document against Ferrovial and said it was worth at least 940p a share - much more than the 810p a share currently on the table.
The biggest gain in the Footsie was for sugar giant Tate & Lyle which climbed 4% or 22.5p to 556.5p on results showing steady growth in underlying profits.
Analysts said that a £272m (€398m) impairment charge which dragged down the group’s bottom line figure was lower than expected.
Other positive movers in the top flight included supermarket group Morrisons after veteran chairman Ken Morrison reduced uncertainty over the company’s future leadership by outlining plans to stand down in January 2008.
The company also revealed a 6% increase in like-for-like sales in the 16 weeks to May 21, helping to lift shares by 3.5p to 193.25p.
Outside the top flight, shares in former Marconi company Telent jumped 9%, or 42.5p to 510p, as it revealed it had accepted a takeover approach from a US-based investment company.
