Friday 18 January 2019

Shire takeover approach pushes FTSE 100 higher

The FTSE 100 Index closed up 44.60 points to 7,044.74.

Shares in Shire soared 14%, or 430p to 3,500p (PA)
Shares in Shire soared 14%, or 430p to 3,500p (PA)

By Ben Woods, Press Association Chief City Correspondent

Pharmaceutical giant Shire gave London’s premier index a leg up after shares rocketed on the prospect of Japan’s Takeda launching a takeover bid.

The FTSE 100 Index closed up 44.60 points to 7,044.74, with Takeda saying its consideration was at a “preliminary and exploratory stage”.

The Osaka-based group said a potential transaction with Shire presented an opportunity to create a “truly global, value-based Japanese biopharmaceutical leader”.

Shares in Shire soared 14%, or 430p to 3,500p.

Across Europe, Germany’s Dax fell 0.3% and the Cac 40 in France rose by 0.3%.

On the currency markets, the pound was struggling against the US dollar after figures showed February and March’s bitter weather conditions had hit retailers.

Sterling was 0.4% lower versus the greenback at 1.41 dollars, as year-on-year retail sales volumes declined for the first time since October 2017 in March, according to the CBI data.

Against the euro, the UK currency was 0.2% ahead at 1.14 euro.

The price of oil slipped back below the 70 dollars a barrel mark after a report from the Energy Information Administration pointed to rising stockpiles of US crude.

Brent crude was down 0.8% to 69.01 dollars at the time of the London market close.

In UK stocks, takeover target GKN saw another 1% shaved off its share price as its battle with Melrose Industries intensified.

The fate of the engineering giant will be decided by a shareholder vote on Thursday, with Melrose making a last-ditch attempt to sway investors.

The turnaround firm said it “stands behind its plan to work for the improvement of not only GKN, but the UK economy as well”.

In response, GKN chairman Mike Turner said: “This morning’s blizzard of announcements by Melrose, drafted in increasingly hysterical language, smacks of desperation.”

Shares in GKN and Melrose fell 7.3p to 423p and 0.4p to 223.3p respectively.

On the second tier, furniture retailer DFS managed to keep investors on side despite unveiling plunging profits.

Shares closed up 14.2p to 184.2p, with half-year pre-tax profits tumbling in line with expectations by 58% to £7 million.

However, the group booked a 4.3% rise in revenues to £396.1 million over the six-month period, reflecting increasing scale from its £25 million deal for Sofology.

Without the boost from its acquisitions – including its £1.2 million deal for Multiyork’s assets, brand and stores – DFS revenues were down 3.5% at £366.5 million.

Chief executive Ian Filby said he was pleased with the performance and noted signs of improvement in recent months.

Elsewhere, electronic trading firm Nex Group rocketed after the group confirmed a takeover offer worth over £3.7 billion from US giant CME.

Nex, which specialises in wholesale trading, is headed by Michael Spencer, the former Conservative Party treasurer.

The FTSE 250 firm has a market capitalisation of around £3.7 billion and any deal would see Mr Spencer, who holds 17% in Nex, net a bumper payout.

Nex, which specialises in wholesale trading, closed up more than 9%, or 86.5p to 971.9p.

The biggest risers on the FTSE 100 Index were Shire up 430p to 3,500p, United Utilities up 55.6p to 724p, Severn Trent up 106p to 1,848p, National Grid up 41.8p to 805.3p.

The biggest fallers were Evraz down 27.4p to 425.2p, Antofagasta down 37p to 910.8p, Anglo American down 64.2p to 1,616.8p, Scottish Mortgage Investment Trust down 15.6p to 439.4p.

Press Association

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