Footsie in positive territory

Shares in BAE Systems tumbled today after it emerged the defence and aerospace giant will get less than expected for its 20% stake in Airbus.

The stock fell 11.75p to 358p, a drop of more than 3% after investment bank NM Rothschild valued the holding at £1.9bn (€2.75bn) – well below the £3bn (€4.3bn) to £4bn (€5.7bn) hoped for in the City.

But the gloom did not spread to the rest of the market as the FTSE 100 Index moved 21.9 points higher to 5855.3 by mid-morning.

It was buoyed by bid speculation surrounding supermarket chain Morrisons which over the weekend was said to be a £6bn (€8.6bn) target for a consortium made up of private equity firms Texas Pacific, CVC and Permira. The rumours sent Morrisons shares up 2% or 4.25p to 198.75p today.

Brewer SAB Miller was also on the move – up 13.5p to 988p – after it agreed to buy US drink brands Sparks and Steel Reserve from McKenzie River for $215m (€168m).

Other risers included catering company Compass, which lifted 8.5p to 270.75p, while ICI gained 8p to 371p.

BAE Systems was joined on the way south by oil explorer Cairn after shares fell 3% in the wake of a trading update. Even though the statement contained few surprises, investors took the opportunity to take profits following a strong run for the stock. Shares were 54p lower at 2139p.

Elsewhere, Matalan shares surged 3% or 5.5p to 174.5p as speculation mounted over when founder John Hargreaves would table a bid to take the company private.

Mr Hargreaves, who founded the discount clothing retailer more than 20 years ago, was said to be prepared to offer as much as 220p a share, valuing the company at £900m (€1.3bn), although analysts suggested any bid was more likely to be between 170p and 190p.