FTSE stocks gained for a sixth consecutive session on Monday after the takeover battle for steelmaker Corus intensified
Corus shares jumped 5 per cent to 525p after CSN of Brazil replied to Tata Steel’s raised 500p a share offer for the former British Steel with a 515p counter bid.
CSN’s quick response kept traders hoping for further developments after India’s Tata raised its offer by 10 per cent on Sunday. The CSN offer valued Corus at £5.7bn.
In the wider market, the FTSE 100 was 9 points higher at 6,161.3 in late morning trade while the mid-cap FTSE 250 was up 63 points to 11,007.1.
Prudential gained 2 per cent to 700p after the life assurer confirmed it had received and rejected a “very preliminary” approach for its Egg banking unit.
The Sunday Times reported that Citigroup had expressed an interest in buying Egg but Prudential said the offer was not in the interests of its shareholders.
The development came amid growing rumours about a break up of Prudential, with the group also said to be considering a sale of its UK life arm.
Shire Pharmaceuticals moved 3.2 per cent higher to £10.64 amid talk of a possible merger with New River of the US.
International Power advanced 2.4 per cent to 382½p as dealers speculation that RWE of Germany could be ready to consolidate the energy company.
Lloyd TSB firmed up 1 per cent to 563p after a trading statement, as the bank forecast a strong performance for 2006 and said it expected levels of bad debts to improve.
On the downside, Royal Dutch Shell slipped 0.9 per cent to £18.27 amid reports that the oil group was poised to cede control of the Sakhalin-2 oil and gas project in Russia’s far east to Gazprom.
Into the FTSE 250, pub stocks were stronger on hopes that they could benefit from the introduction of real estate investment trusts (REITS).
According to Evolution Securities, there is “huge immediate valuation upside for the ‘big 5’ asset intense pubcos [pub companies] from the new REIT legislation, even if they do not initially elect for REIT status.”
Nigel Parson, analyst, said that, if the pub companies did not convert, private equity companies would buy them and do it.
Greene King advanced 4 per cent to £11.15 while Wolverhampton & Dudley gained 2.8 per cent to £17.89.
Hays, the recruitment consultant, firmed up 4.2 per cent to 163p ahead of a trading update this week amid talk of interest from larger rival Adecco.
Meanwhile, troubled healthcare sector IT specialist iSoft rose 13.5 per cent to 46¾p after news of £14.3m half-year loss before tax was not as bad an outcome as some had feared. It also said it was still in talks with potential bidders.
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