TUESDAY MARKET CLOSE: FTSE higher as bid chatter continues

A NEW set of takeover rumours helped the FTSE 100 start the week on the front foot, pushing back towards recent highs.

AstraZeneca shares fell after the withdrawal of Pfizers offer for the company. Picture: AP

Just as AstraZeneca shares fell back after the withdrawal of Pfizer’s offer for the company, both Intercontinental Hotels (IHG) and chipmaker Arm Holdings were boosted by rumours of US suitors.

Arm was strengthened by a broker upgrade following an analyst day last week, and as traders considered recent speculation that the microchip architect could be prey for Google, which has a $30 billion (£18bn) war chest for foreign acquisitions.

Mike van Dulken, head of research at Accendo Markets, said: “The recent increase in M&A activity around the world keeps the tech story an attractive one for investors looking for upside, even more so after a tough start to the year with the shares falling 25 per cent from all-time highs.”

Arm topped the blue chip risers’ board, up 4 per cent at 917p. IHG was not far behind, adding 3.5 per cent to 2,302p following weekend reports that it had spurned a £6bn approach from across the Atlantic.

With Pfizer forced to hold off from further flirtation for at least six months, AstraZeneca was down 76p or 1.7 per cent at 4,252p. The FTSE 100 Index was solidly higher throughout the session, but traders appeared weary of the 6,850 level. The index closed 29.19 points higher at 6,844.94.

Outside the top flight, engineering software company Aveva was buoyant after it said strong demand from Korean ship builders had driven an 11 per cent rise in full-year profits. The shares added 189p, at 2,350p.

Punch Taverns saw its share price collapse by 29 per cent to 10.25p as investors reeled from a debt-for-equity deal that will leave them owning just 15 per cent of the pubs group.