Market Report: Traders bet on bigger bid for Shire from AbbVie


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The Independent Online

Investors are betting that a juicier bid for Shire could in the works, after the pharmaceutical company won a key patent ruling in the US.

A judge upheld Shire’s claim that generic drug makers are infringing on patents relating to Shire’s best-selling hyperactivity drug Vyvans, one of its crown jewels.

Mick Cooper, analyst at Edison Investment Research, said the ruling “strengthened Shire’s hand” in its fight against AbbVie’s takeover bid, launched last week. He added: “For some the ruling may have been expected but it now clears the way for a better discussion on the true value of Shire, with AbbVie, or other suitors, expected to make fresh approaches.” The speculation helped Shire add 113p to 4517p.

The drug maker was one of the few companies to make gains as the sell-off on the bluechip index accelerated. Continued uncertainty in Iraq and a downward revision of US first quarter GDP figures turned investors off equities and the FTSE 100 slipped to its lowest level since April, down 53.45 points at 6733.62.

Meggitt was the worst performer, falling 17p to 508.5p after a downgrade from JPMorgan.

Premier Oil retreated 13.8p to 322.1p on the mid-cap index as the independent fossil fuel specialist named finance director Tony Durrant as successor to out-going chief executive Simon Lockett.

City stalwart and Tullet Prebon chief executive Terry Smith’s new investment vehicle Fundsmith Emerging Equities Trust got off to a strong start as a listed company, closing at 1040p on its first day of trading after being offered at 1000p.

Recently floated Card Factory received a brace of analyst endorsements, as UBS, Investec and Nomura all initiated coverage of the high street retailer with a buy rating. But after a strong morning rally, the company ended the day up just 1.5p at 206p.

Quindell chairman Rob Terry upped his stake in the AIM-listed insurance outsourcing business, spending just over £31,000 on shares. The move takes his and his family’s stake in the company to 10.89 per cent. Quindell, which recently missed out on a premium listing, added 7.5p to 209p.

Sheffield headquartered surveillance specialist Synectics tumbled 97p to 329p after a profit warning. The company blamed the crisis in Iraq for the likely earnings miss, with the delay of three surveillance contracts for re-building and expanding oil refineries in southern Iraq knocking off£7m in revenue forecast and £2.1m from predicted net profit.