Whitbread talks help FTSE climb

London investors applauded the news today that leisure group Whitbread is in talks to sell some or all of its Marriott hotels in the UK.

London investors applauded the news today that leisure group Whitbread is in talks to sell some or all of its Marriott hotels in the UK.

Whitbread shares shot up 8% or 71.5p to 967.5p as analysts predicted a price tag of more than £1bn (€1.43bn) and a likely return of capital to investors.

With oil prices also pulling back from near-record highs, the FTSE 100 Index was able to move up 25.8 points to 4987.9 by mid-morning – nearly double its gains from the first hour.

Analysts said profit-taking was the reason why the cost of a barrel of US light crude retreated below $53 today, while there was a growing consensus that Opec will not announce production cuts when it meets on Wednesday.

In London, catering group Compass was tracking Whitbread on the risers board with a gain of 3% or 8.5p to 263.5p after broker Deutsche Bank upgraded the stock to a buy recommendation.

The heaviest faller of the session so far was InterContinental Hotels as investors banked profits after its strong annual results yesterday and broker Goldman Sachs cut its earnings estimates for this financial year and the next.

Elsewhere, shares in British Vita added nearly 2% or 6p to 346p after suitor Texas Pacific Group signalled it may raise its proposed offer if the foam maker backs down on its refusal to open its books.

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