Allied Domecq buzz lifts up FTSE
A potential takeover offer for drinks giant Allied Domecq today helped the FTSE 100 Index to bed in above the 4900 barrier.
Allied shares fizzed 16% or 88p higher to 625p after it confirmed that talks were underway with French group Pernod Ricard and the maker of Jim Beam bourbon, Fortune Brands, about a deal.
With rival drinks firms also advancing on the news, the FTSE 100 Index gained enough momentum to stand 22.2 points higher at 4918.9 by mid-morning.
The takeover news added to the positive mood in London, where trading had begun brightly after New York recovered some of its recent losses overnight and oil prices eased.
Diageo, which has reportedly shown an interest in Allied’s wine brands, ticked up 12p to 769.5p.
Other drinks groups to make headway today included brewers Scottish & Newcastle and SABMiller, which rose 4% or 18.5p to 478p and 14p to 836p respectively.
In other sectors, financial stocks such as Friends Provident, up 1.75p at 178.75p and Lloyds TSB, ahead 3p at 473.5p, were among those to bounce back strongly from a disappointing previous session.
But shares in Yell Group plunged 10% or 48.75p to 420p after the Office of Fair Trading (OFT) said the classified advertising directory market was not working effectively.
Referring the market to the Competition Commission, the OFT said the Yellow Pages – owned by Yell Group – and Thomson local directories accounted for more than 90% of supply in the UK and this effectively prevented others from entering the market.
Outside the top flight, parcels group Business Post slipped 4% or 25.5p to 617.5p, despite announcing a strong start for its new postal delivery service UK Mail.
The progress for the rival to the Royal Mail was offset by a warning that profits for the group would be slightly below market expectations.
Software group Autonomy fared better, surging 12% or 20.5p to 197p after it forecast first quarter results “considerably” ahead of market forecasts.
