Market Report: Flurry of deal making puts brakes on Footsie's five-day losing streak

 

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The Independent Online

A flurry of deal making ignited UK shares and put the brakes on the Footsie’s five-day losing streak.

The insurer RSA, up 80.7p at 518.5p, topped the FTSE 100 leaderboard as cash-rich Zurich Insurance drew up plans for a bid which could top £5.5bn.

RSA, which parachuted in former RBS boss Stephen Hester last year after a string of profit warnings and an accounting scandal, said it had not held talks with or been handed a proposal by Zurich.

Russ Mould, investment director at AJ Bell, said: “The impending introduction of new European solvency rules has prompted insurers to consider tie-ups to improve their capital bases.”

Rival insurers also rose, with Admiral up 30p to 1,496p and Direct Line up 8.9p at 364.9p.

Hikma Pharmaceuticals, 241p higher at 2,321p, snaffled US-based Roxane Laboratories from Germany’s Boehringer Ingelheim in a deal worth $2.65bn (£1.7bn), making it the sixth-largest generic drugs maker in the US. The deal is hot on the heels of Teva’s $40.5bn (£26bn) acquisition of Botox maker Allergan’s generics business.

A €706m (£503m) deal for the Dutch aerospace engineer Fokker propelled GKN 21.6p higher to 316.6p.

The M&A activity helped the FTSE 100, which rose 50.15 points to 6,555.28, to banish the blues of the past week, caused by volatility in the Chinese stock markets and crumbling world commodity prices.

Attentions today moves across the Atlantic where the Federal Reserve will give clues on the timing of a possible first rise in US interest rates in nine years.

Among the blue-chip fallers were supermarket groups Tesco, down 1.9p at 212.4p, and Morrisons, down 1.8p at 179.6p, as Kantar data revealed their sales fell 0.6 per cent and 0.1 per cent, respectively, in the 12 weeks to 19 July.

Investors in Melrose Industries, up 24.5p at 278.9p, are in line for a payday after it sold its Elster metering business to Honeywell for £3.3bn.

Meanwhile, more deal-making is expected in the media sector after Gloo Networks said it would float on AIM to raise £30m. That would create a cash shell on the lookout for media assets worth £1bn.

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