Most of the pharmaceutical takeovers touted over summer fizzled out, but speculators are hoping at least one tie-up could come to fruition.
Replacement hip and medical dressing specialist Smith & Nephew climbed yesterday amid hopes that the US company Stryker could return to pounce.
Stryker did a once-over on the company earlier this year but ruled itself out of a bid. That left it to sit on the sidelines for six months under takeover rules, but that exclusion ends this week. JPMorgan Cazenove said a “tax inversion” deal now looked unlikely but a takeover could still make sense on cashflow grounds. Smith & Nephew jumped 48p to 1138p.
Elsewhere, news that BT, up 14.1p to 394.1p, could be considering a deal for O2 fuelled hopes of deals elsewhere in the telecoms sector. TalkTalk climbed 18p to 300.5p, as speculation that Vodafone, down 2.75p to 225.05p, could take a tilt at the X Factor sponsor was revived.
Despite the excitement, the FTSE dipped 20.97 points to 6729.79. M&A optimism was countered by a profit warning from Petrofac, 315.5p lower at 877.5p, and scepticism about Aviva, down 29p at 510p.
A downgrade from Citi sent Hargreaves Lansdown falling 53.5p to 958.5p. Haley Tam at the bank believes Hargreaves Lansdown’s recent rally means it is now overpriced.
FirstGroup crashed 11.6p to 108.2p. Reports claim the transport group is set to lose out on the soon-to-be announced East Coast rail franchise. FirstGroup had been the favourite but a joint bid from Eurostar and Keolis is now said to have the edge. Stagecoach, down 5.7p at 362.4p, has also submitted a proposal with Virgin.
News that an alliance of 80 councils is pushing for a £2 stake limit on lucrative fixed-odds betting machines, first reported in The Independent on Sunday, sent the bookies tumbling. Such a cap would spell disaster for the likes of Ladbrokes, down 6.5p at 113.8p, and William Hill, off 19.3p at 339.6p. Gamblers can currently wager up to £50 a go.
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