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Market Report: Investors bet on BG Group break-up

Now management plans to stave off any unwanted attention by ‘actively managing its asset portfolio and delivering value to shareholders

BG Group warmed up yesterday as investors bet on a break-up. The oil and gas company was discussed as a takeover target after chief executive Chris Finlayson resigned in April.

Now management plans to stave off any unwanted attention by ‘actively managing its asset portfolio and delivering value to shareholders’. The first signs came last week as BG sold its majority stake in one of Europe’s biggest gas pipelines for £562m. Deutsche Bank yesterday chimed in with its two cents on what else chairman Andrew Gould should do, calling for the spin-off of BG Group’s liquefied natural gas business. The demerger calls excited traders, helping BG Group jump 31p to 1270.5p.

InterContinental Hotel Group was another strong mover, up 63p at 2368p, amid rumours a takeover bid for the Holiday Inn owner could be revived. IHG was approached by a mystery US suitor earlier this year with a £6bn offer. The bidder was named as Wyndham Worldwide over the weekend, with Wyndham said to be weighing another approach.

Miners were boosted by data from resource-hungry China. HSBC’s factory activity reading for June yielded the first increase in productivity for six months. Rio Tinto added 49.5p to 3127p, while BHP Billiton climbed 36.5p to 1938p.

But the FTSE 100 was down 24.64 at 6800.56, with housebuilders and airlines pegging it back. Calls from the Bank of England’s David Miles for a rise in interest rates hit builders, with Barratt Developments losing 9.8p to 350.8p and Persimmon dipping 14p to 1216p. Meanwhile the start of a six-day strike by air traffic controllers in France hurt airlines: easyJet fell 29p to 1423p, while IAG, which also faces a cabin crew strike at subsidiary British Airways, slipped  4.7p to 379.9p.

Lonmin gained 11.2p to 259.6p on the mid-cap index after announcing further progress had been made in ending the long-running strikes at its South African platinum mines.

On Aim, Verona Pharma plummeted 0.67p to 1.4p after admitting trials of its new drug to treat chronic coughs in patients with idiopathic pulmonary fibrosis have been unsuccessful.