Vodafone talks spark FTSE frenzy

Nearly 1.5 billion shares in mobile phone giant Vodafone changed hands today as the company entered talks to sell its struggling business in Japan.

Nearly 1.5 billion shares in mobile phone giant Vodafone changed hands today as the company entered talks to sell its struggling business in Japan.

The frenzy of dealings stabilised the London market on a day which saw the FTSE 100 Index rise by 30 points early on, before falling a similar amount below its opening price.

The late rally by Vodafone – which saw its share price gain 8% – ensured the Footsie ended the week on a high, up 25.7 points to 5858.7.

On a normal day, around 267 million Vodafone shares change hands, but today’s volumes were not the highest.

In November, 1.99 billion shares were traded as Vodafone lost 8% of its value after it said the cost of turning around its struggling telecoms unit in Japan would leave its mark on margins.

Today Vodafone confirmed it was in discussions about a sale of the unit to Softbank, Japan’s largest broadband internet provider, sending shares up 9.5p to 121.5p.

Vodafone was followed up the Footsie leaders board by BT, Cairn Energy and airports operator BAA on the back on fresh bid speculation.

BT lifted 6% after a newspaper report said a private equity firm had cast an eye over the company in a potential deal worth £20 billion.

Hurdles such as financing and BT’s pension deficit meant the interest came to nothing, but this failed to prevent shares from rising 12.5p to 220.5p and lifting the value of holdings owned by around 1.5 million small shareholders.

Carin Energy was also benefiting from speculation as reports circulated of interest from India’s Oil & Gas Corp in the group’s Indian assets. Shares jumped 2% or 37p to 1997p.

And investors anticipating an approach for airports operator BAA kept its shares bubbling – up 3% or 28p to 835.5p – with reports in Spain suggesting infrastructure giant Ferrovial was in the home stretch of finalising a bid.

Marks & Spencer also rose after it emerged the company was preparing to squeeze suppliers by asking for further discounts in order to pay for its ongoing advertising and marketing campaign.

Shares were more than 2% higher, up 11.25p at 531.75p.

And oil stocks added further support to the market as the cost of crude strengthened ahead of next week’s OPEC meeting. Shares in BP were up 2.5p to 637.5p, while rival Royal Dutch Shell gained 13p to 1840p.

But financial stocks were o the slide, with banks Northern Rock, down 31.5p to 1115.5p, and Standard Chartered, off 40p to 1487p, joined at the top of the top flight fallers board by Royal & Sun Alliance, which lost 3.5p to 129p ahead of its results next week.

Elsewhere, JD Wetherspoon eased 5% or 15.5p to 342p as it said the full implementation of its smoking ban would be delayed.

Today’s biggest blue chip risers were Vodafone up 9.5p to 121.5p, BT 12.5p stronger at 220.5p, PartyGaming up 6.5p to 129p and BAA up 28p to 835.5p.

The heaviest fallers were Northern Rock off 31.5p to 1115.5p, Royal & Sun Alliance down 3.5p to 129p, Standard Chartered 40p lower at 1487p and Man Group off 56p to 2282p.

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