The latest wave of takeover fever provided a focus for London traders yesterday as the wider market rally paused for breath.
Jasper Lawler, market analyst at CMC, said: “The UK was beset with prospective deals, with Stryker apparently again renewing interest in Smith & Nephew, BT looking to takeover O2 and GSK’s board is looking for approval from shareholders for its asset swap with Novartis.”
Friends Life was the top blue chip riser after investors cheered the disclosure of a possible merger with Aviva. Shares rose almost 6 per cent up 20.5p at 368.2p with the all-share offer valuing it at 398.9p, a 15 per cent premium to its value at the close on Friday. Aviva dipped more than 5 per cent, or 29p, to 510p.
News that telecoms giant BT was in “highly preliminary” talks with O2 and another operator, understood to be EE, to buy a UK mobile network sent its share up almost 4 per cent, or 14.1p, to 394.1p.
Smith & Nephew was up 48p at 1,138p, as stories citing unnamed sources suggested US rival Stryker was considering a new move after an enforced thinking period came to an end.
But the FTSE 100 Index was 20.97 points lower at 6,729.79, dragged down by traders cashing in Friday’s gains on miners and a huge slump at oilfield services firm Petrofac. A sharp downgrade in profit expectations for 2015 saw the firm’s shares plummet 26 per cent, down 315.5p at 877.5p.
Also on the fallers’ board, stockbroker Hargreaves Lansdown fell 5 per cent to 958.5p after it was downgraded to a “sell” by Citigroup.
In the FTSE 250, meat producer Cranswick made gains after it said it was recovering from a fall in fresh pork sales and announced a 6 per cent dividend hike as it published interim results. Shares lifted 69p to 1,404p.