O2 takeover talk keeps FTSE buzzing

Telecoms stocks were the talk of the market today as the FTSE 100 Index made a positive start to the week.

Mobile phone giant Vodafone added 2% to its market value following press reports that Germany’s Deutsche Telekom and KPN of the Netherlands had attempted to team up to bid for UK rival O2.

This made Vodafone the second highest blue-chip riser as analysts at JP Morgan said it would benefit from any takeover of O2. The stock added 3.25p to 152p, helping the Footsie lift 11.2 points to 5357 by mid-morning.

But O2 was at the top of the Footsie fallers board, losing 1.75p to stand at 147.75p, as disappointed investors sold their shares.

Also in the telecoms sector, Cable & Wireless initially fell on news that smaller rival Thus was campaigning for debt holders in rival Energis to support its £800m (€1.2bn) offer instead.

But shareholders put aside their initial disappointment to return the stock to its opening mark of 161p.

Elsewhere, insurers were continuing to find support after releasing a host of upbeat earnings reports last week. Royal & Sun Alliance was fourth on the risers board – up a penny to 93p – and Prudential was ahead ahead by 3.75p at 530.5p.

Outside the top flight, London Stock Exchange rose 21p to 573p after it was confirmed that Macquarie Bank of Australia was examining a bid.

Tiger Tiger bar owner Urbium lifted 11% or 102.5p to 1007.5p on news that it was now in exclusive takeover talks with an unnamed party.

But recruitment specialist Michael Page failed to impress investors with news that group profits for the six months to June 30 were “well ahead” of both company and City expectations. Shares weakened 0.75p to 247.25p.