Footsie makes slight losses

The FTSE 100 Index made a lacklustre start to the week today despite takeover talk boosting the telecoms sector.

Cable & Wireless and Vodafone were among the heaviest blue-chip risers on the back of separate developments – but this failed to prevent the Footsie ending the session 1.6 points lower at 5344.2.

Vodafone was attracting buyers in the wake of a weekend report that Germany’s Deutsche Telekom and KPN of the Netherlands had attempted to team up to bid for UK rival O2.

With analysts predicting this would assist Vodafone in its major markets, the telecoms heavyweight picked up 1.75p to stand at 150.5p.

However, the press reports spelt bad news for investors in 02 who were hoping that the operator would be a natural fit for KPN or Deutsche Telekom.

Shares in 02 reached an all-time high on Friday but slipped back to settle at 146.5p, down 3p on where it started today.

Cable & Wireless was ahead of Vodafone on the risers board after takeover target Energis rejected a surprise rival bid.

C&W initially came under pressure after smaller telecoms group Thus said it was willing to pay £800 million and asked stock exchange authorities to suspend its shares.

But C&W shares closed 2p higher at 163p after the board of Energis turned down the offer.

Elsewhere, insurers were continuing to find support after releasing a host of upbeat earnings reports last week. Royal & Sun Alliance was up 0.75p at 92.75p and Prudential was ahead by 1.25p at 528p.

Top of the pile was mining group Xstrata – up more than 6% or 79p to 1352p - after taking a 19.9% stake in Canadian rival Falconbridge for around 2 billion Canadian dollars (£932 million).

Outside the top flight, London Stock Exchange rose 26p to 578p after it was confirmed that Macquarie Bank of Australia was examining a bid. Macquarie Bank said its “deliberations were at the most preliminary of stages”.

Tiger Tiger bar owner Urbium lifted 12% or 105p to 1010p on news that it was now in exclusive takeover talks with an unnamed party.

And magazine publisher Highbury House Communications soared 12% or 0.33p to 3p after saying former Sun newspaper editor Kelvin MacKenzie had built up a near 15% stake in the company.

The publisher of titles such as lads’ magazine Front said Mr MacKenzie had more than doubled his holding to 47.4 million shares

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 half a penny to 247.5p.

The highest Footsie risers today were Xstrata up 79p to 1352p, Antofagasta rising 36p to 1473p, National Grid up 6.5p to 517.5p and Cable & Wireless adding 2p to 163p.

The heaviest top flight fallers were O2 off 3p to 146.5p, Tate & Lyle down 7.25p to 457.75p, ITV off 1.75p to 115.5p and Enterprise Inns down 9.5p to 810p.