Kesa takeover speculation powers up FTSE

The emergence of another potential high-profile takeover deal helped nudge the FTSE 100 Index closer to the 6,000 landmark today.

It was the turn of Comet owner Kesa in the spotlight as the retailer revealed it had rejected an approach worth £1.72bn (€2.5bn) from a private-equity firm.

Kesa shares jumped almost 18% in the second-tier of the market, while news of the latest possible deal further raised spirits in the FTSE 100 Index, which added another 12 points to stand at 5964.8 by mid-morning.

The developments at Kesa, up 51.5p at 344.5p, shattered hopes for a session of reflection after developments yesterday involving Vodafone, BAA, the London Stock Exchange and Mitchells & Butlers.

Among the top flight beneficiaries of the Kesa announcement, B&Q owner Kingfisher surged 7%, up 16.5p to 255.5p, amid hopes of further consolidation in the retail sector. Dixons owner DSG cheered 10.5p to 187.5p while Argos owner GUS rose 28.5p to 1088p.

One of the biggest gains of the session came from oil exploration company Cairn Energy after it produced a solid set of full-year figures and upgraded its reserves estimate by 20%.

Shares were up 6%, or 112p to 2049p, as the company also said it was considering a flotation of its Indian business.

London Stock Exchange took centre stage yesterday with a 30% rise in its share price after New York-based exchange Nasdaq became involved in the long-running battle surrounding the LSE.

With analysts expecting other offers, the stock held on to most of the gains following a drop of just 7.5p to 1141.5p.

Pubs chain Mitchells & Butlers gave up some of its strength after learning it was in the sights of property tycoon Robert Tchenguiz. Shares rose 19% last night but were off 7p to 483p, a drop of more than 1%.