FTSE driven by take-over talk
The London market began the week on the front foot today driven on by deals and takeover speculation.
The FTSE 100 Index closed 58.8 points at 6189.4 with the market still waiting for an update from Barclays amid rumours that the company was in talks over a £80 billion merger with Dutch bank ABN Amro.
Meanwhile Lloyds TSB was reported to be selling its share registration and stock management business, thought to be worth around £600 million.
Shares in Lloyds were up more than 2%, or 14p, at 548p but Barclays shares dipped 5.5p to 677p by the close, with analysts unsure about the value of a potential tie-up.
Financial stocks in general gained from hopes of consolidation in the sector. Standard Chartered was ahead 33p at 1428p, Man Group was up 11.25p at 537p and Bradford & Bingley was 11p higher at 450.75p.
But insurers topped the risers board with more rumours of stake-building by an activist hedge fund and a potential break-up circling Prudential, which was ahead 26.5p at 708p. Investors also favoured Friends Provident ahead of the company’s full year results tomorrow, lifting its shares 8p, or 4%, to 202p. Royal & Sun Alliance also progressed 5.25p to close at 165p.
Plumbing and heating supplier Wolseley was also on the front foot with shares up more than 3% to 1243p after its interim results came in above analysts’ expectations, despite posting a 17.6% drop in pre-tax profits due to the slowing US housing market.
The loss was not as great as analysts feared and an optimistic outlook statement boosted the stock by 44p.
Despite a positive note from Merrill Lynch, Imperial Tobacco was the biggest Footsie faller following the weekend announcement that European rival Altadis had rejected its initial approach from the group. The shares closed down 45p at 2285p.
Consumer products manufacturer Unilever also lost some of its previous gains from Friday as bid rumours subsided and the shares finished 18p down at 1507p.
Supermarket chain Morrison also saw shares drop after a broker downgrade from ABN Amro due to the costs of the company’s strategic review, with shares down 3.75p at 314.75p.
Drugs giant AstraZeneca suffered after its ARISE treatment, created in collaboration with AtheroGenics, failed a significant drug test. The stock was down 20p to 2861p.
In the second tier, tour operator First Choice announced details of its merger with German rival, Thomson Holidays parent TUI, sending First Choice shares soaring nearly 9%, or 24p, to 308p.
But electronics and security firm Laird saw its shares rocket almost 11% as the company said it would return £100 million to shareholders as part of plans to sell its home security division for £242.5 million. Laird closed 50.25p higher at 513p.
The biggest Footsie risers were Friends Provident ahead 8p at 202p, Prudential up 26.5p at 708p, Wolseley ahead 44p at 1243p and Royal & Sun Alliance up 5.25p at 165p.
The biggest Footsie fallers were Imperial Tobacco, down 45p at 2285p, Unilever down 18p at 1507p, Wm Morrison off 3.75p at 314.75p and Marks & Spencer down 8p at 682p.
