FRIDAY MARKET CLOSE: Vodafone rises as bid chatter revives

Mobile phone giant Vodafone rose 3.3p to 205.9p on reports that America’s AT&T is preparing to pay more than £3 a share for the UK-based company.

AT&T boss Randall Stephenson had previously said that he was excited by the “huge opportunity” to invest in mobile broadband in Europe. But the US firm shot down speculation about an offer in January.

Jonathan Jackson, head of equities at Killik & Co, said: “AT&T has been looking in Europe for growth as its home market becomes more competitive. An acquisition of Vodafone would mean AT&T taking over Europe’s biggest wireless carrier and creating the world’s largest telecommunications operator by sales.”

Takeover talk has also boosted the share price of AstraZeneca, which had already climbed 3 per cent in the previous session on rumours that US firm Pfizer could be mulling a new offer after a failed £69 billion proposal earlier this year. Astra built on those gains to close up 6.5p at 4,418p.

The FTSE 100 Index fared better than its European peers, slipping just 2.41 points to 6,775.25.

In the second tier, bicycle and car parts retailer Halfords lost ground after analysts at Barclays downgraded the group to an “underweight” rating. Shares fell or 7.2p to 488.5p.

The cut was the result of concerns over the impact of an interest rate rise on UK consumer spending in the retail sector, after it was disclosed that two members of the Bank of England’s rate-setting committee voted for a 0.25 per cent hike this month.

Barclays also downgraded its view of homeware group Dunelm to “equalweight”, from “overweight”. Shares fell 10p to 893p.