Corus shareholders reaped further rewards today from the dramatic bidding war involving the Anglo-Dutch steel group.
Shares soared 5% after it backed a £4.9bn (€7.2bn) takeover offer from Brazilian firm CSN which trumped a £4.7bn (€6.9bn) offer from Tata Steel just hours earlier.
A positive trading update from Lloyds TSB added to the cheer in the City as the FTSE 100 Index lifted 8.2 points to 6160.6 by mid-morning.
Corus, which was formed out of British Steel in 1999, was up 25p to 525p as investors hoped that Tata would come back with an improved offer to eclipse the 515p a share tabled by CSN today.
The CSN bid came just hours after Tata increased its offer from 455p a share to 500p a share in an effort to fend off interest from the Brazilians.
Investors were given hope that Tata could return with a better offer when the Indian firm said it was “considering its position” in the light of the CSN bid. Shares are now 80% higher than this time last year.
Lloyds TSB was also on the front foot – up 2p to 557.5p – after it said it was on course for a “very satisfactory” year and indicated it would meet expectations for profits of £3.7bn (€5.4bn).
The update lifted a number of heavyweight rivals, with HSBC ahead 5p at 920.5p, HBOS 2p stronger at 1079p and Royal Bank of Scotland up 13p at 1988p. Barclays was down 3p at 727p, but held on to most of the gains seen after rumours of takeover interest from Bank of America on Friday.
Another major development in the session involved media group SMG after it said it was back in talks with UTV over a possible merger. Shares in SMG rose 1.5p to 58.25p, while UTV recovered from an initial wobble to stand half a penny higher at 387p.