The FTSE 100 Index ended the week above the 5400 threshold for the first time in four years as bid speculation showed no sign of quietening down.
It was Friends Provident that found itself at the heart of the takeover rumours this time after French rival AXA increased its stake in the company to 15% yesterday.
Trading in shares of the insurer was brisker than many of the UK’s biggest firms such as HSBC and GlaxoSmithKline, helping the Footsie to close 24.4 points higher at 5407.9.
Friends cheered more than 3% or 6p to 179.75p on a positive day for the insurance sector where Aviva was 3.5p stronger at 612p and Legal & General ticked 1.75p higher to 111.25p.
Mobile phone operator O2 was ahead by 2% or 3.75p at 155.25p as investors saw a potential suitor in Spanish rival Telefonica.
Telefonica was yesterday forced by the Takeover Panel to clarify that its chairman had only made general comments about O2 when answering questions about its acquisition strategy.
Further excitement was generated by the news that consumer goods giant Unilever is reviewing the options for its European frozen foods business, nudging its shares 6p higher to 576.5p.
Mining stocks occupied the top three spots on the risers board, with Rio Tinto rising 79p to 2149p and Anglo American advancing 75p to 1554p as investors continued to warm to their growth prospects and buoyant global demand for metals.
Supermarket chain Morrisons was unscathed despite unions voting to strike over pay and work conditions, with its shares moving 3p higher to 183p.
But there were further losses for Kingfisher as investors became more downbeat following half-year results from the B&Q owner yesterday, which showed UK profits down by a third. Shares were down 4p to 231.5p.
Smith & Nephew lost ground – off 3p at 493p – after the medical devices maker was downgraded from “outperform” to “in-line” by investment bank Goldman Sachs because of its plans to divest its BSN joint venture.
Interest in Shire Pharmaceuticals suffered from a downgrade by broker UBS, with its shares falling 10.5p to 685p on a day when rival drugmakers GlaxoSmithKline and AstraZeneca also fell 7p and 27p to 1362p and 2625p respectively.
Elsewhere, Chrysalis shares were unchanged at 152p on news that it is in talks to sell its books business to focus on its core divisions of radio stations and music.
IT services firm LogicaCMG retreated 5% or 9.75p to 168p as investors gave the thumbs-down to news that it was in advanced talks to buy Unilog.
Logica said it was willing to pay €938m for the sixth-largest computer services firm in France, but had not tabled a formal offer at this stage.
The highest Footsie risers today were Anglo American up 75p to 1554p, Rio Tinto adding 79p to 2149p, Xstrata up 49p to 1424p and Friends Provident adding 6p to 179.75p.
The heaviest fallers were Kingfisher down 4p to 231.5p, ITV off 1.75p to 111p, Cable & Wireless losing 2.25p to 144p and Reuters down 5.75p to 373.5p.