FRIDAY MARKET CLOSE: Vodafone up on takeover talk

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Heavyweight telecoms stock Vodafone helped keep the London market afloat as it emerged as a potential takeover target for an American rival.

The British firm saw its shares jump 8p to 232.5p, a rise of 4 per cent, on the back of reports that AT&T was laying the groundwork for a potential deal.

Max Cohen, financial sales trader at Spreadex, said: “American AT&T is keen to invest in Europe, and is believed to be working on plans for Vodafone’s European operations should a deal be made.”

Vodafone’s gains helped the wider FTSE 100 Index hold firm – up 3.31 points to 6,734.74 – despite the fact that Royal Bank of Scotland’s shares had nose-dived. Poor results more than offset the lender’s escape from a full break up at the hands of the UK government, and shares in the part-nationalised bank closed 7.5 per cent lower, down 27.6p to 340p.

Other banks were also on the back foot, with Barclays off 7.3p at 256.3p as reports suggested six of its traders had been suspended in connection with the global probe into alleged foreign exchange fixing, with two RBS traders also believed to be on paid leave of absence as part of the investigations.

Some small comfort for RBS came from the performance of insurer Direct Line, in which the banking group still has a 28.5 per cent stake. The business reported a 6 per cent increase in operating profits for the third-quarter and said claims from this week’s storm should not exceed current expectations for £25 million of costs for the whole of the fourth quarter. Its shares were 3.5p higher at 228.5p on the FTSE 250.

Back in the top flight, engineer Meggitt was the biggest faller after it said trading in the four months to 31 October was slightly below expectations. Shares dropped 11 per cent, or 63.5p to 509p.