A takeover bid for Scottish Power and the dramatic appointment of a new boss at ITV failed to lift the London market today as a weakening US dollar continued to take its toll.
The FTSE 100 Index fell 24.2 points to 6025.9 today leaving it well below a five-and-a-half-year high of 6254 less than two weeks ago.
The fall came despite the surprise announcement that the BBC’s Michael Grade was set to join ITV as executive chairman and an £11.6 billion bid for Scottish Power.
Investors in London initially welcomed the appointment of Mr Grade and shares in the commercial broadcaster shot to the top of the Footsie leaderboard.
However, high expectations for a revival at struggling ITV were replaced by fears that the appointment could dent hopes of a takeover in the future and shares closed the session 1.75p lower at 110.75p.
The other focus of a busy session was on the energy sector after Scottish Power backed a takeover approach worth £11.6 billion from Spain’s Iberdrola.
That was lower than the £12 billion expected, and with Iberdrola shares also part of the deal, Scottish Power investors were left cold by the announcement.
Shares fell 6p to 740p, well below the 777p offered today while rival firm Scottish & Southern Energy shared the disappointment, falling 19p to 1465p.
But insurer Old Mutual was the heaviest faller of the session, down 10.25p to 166p, as investors reacted with disappointment to third quarter figures.
And banking giant Barclays lost 11.5p to 676.5p after its trading statement offered nothing new to drive its share price forward.
Barclays said it was on course for annual profits of almost £7 billion compared with £5.28 billion last year.
Going in the other director was Yellow Pages firm Yell, which rose more than 2% after Goldman Sachs upgraded the stock to buy from neutral and said market concern over the integration of recent acquisitions appeared overdone. Shares moved towards the top of the leaderboard, up 13p to 570p.
Outside the top flight, EMI shares jumped 10% after a report in the Financial Times said the music group had begun talking to private equity groups about a possible takeover.
Shares were up 27.25p to 289.5p as EMI returned to the takeover spotlight just four months after failing to merge with Warner Music.
Commercial radio station operator GCap also sent a shudder through the media sector after posting a 32% dip in profits to £8.4 million and painting a gloomy picture for advertising revenues.
Shares slumped more than 4% – or 9.75p – to 212p as it admitted the outlook was not positive going into the new year.
The day’s biggest blue chip risers were Amvescap up 15p to 560p, Yell up 13p to 570p, Imperial Tobacco which was 39p stronger at 1880p and Gallaher with a 16p gain to 942p.
The heaviest fallers were Old Mutual down 10.25p to 166p, Experian off 20p to 566p, British Energy 12.5p weaker at 467.5p and ICI 10p lower at 408.75p.