Takeover buzz boosts FTSE

A fresh round of takeover speculation helped boost the London market today as the Footsie powered through the 6400 barrier during afternoon trading.

The FTSE 100 Index closed up 39.4 points at 6421.2, its first close above 6400 since mid-December 2000, buoyed by a strong start on Wall Street and a late run for Wolseley and mining stocks.

Heating and plumbing giant Wolseley led the FTSE 100 risers, up more than 7%, or 95p to 1407p, after newspaper reports speculated the firm could become a potential takeover target for private equity group Cinven.

It was followed up the risers’ board by mining giant Vedanta Resources as traders continued to mull the possibility of a takeover for Alcoa, the US-based aluminium firm. Vedanta closed up 65p at 1280p, a gain of more than 5%, while Xstrata advanced 84p to 2488p.

Curry’s owner DSG International saw strong gains after announcing a new distribution deal with online shopping site Kelkoo. The group also benefited from bid talks as investors cited private equity interest in the group. Its shares were 5p higher at 175p.

Property group Liberty International closed up 28p at 1318p after it posted a 71% rise in annual pre-tax profits and said its development pipeline stood at around £1bn (€1.5bn). Fellow property firm Hammerson rose 37p to 1647p, while Land Securities was ahead 51p at 2272p.

The biggest FTSE 100 faller was power company Drax Group, which fell 12p to 662p on fears from JPMorgan over energy prices. Royal Dutch Shell lost 6p to 1695p and BP was 0.5p lower at 534p.

Outside the top flight, record company EMI was the biggest faller following its second profit warning in as many months. Its shares slumped 28.75p to 210.75p, or 12%.

EMI said it faced “unprecedented” levels of market decline in the US, adding that revenues at its recorded music division for the year to March 2007 would be 15% down on the previous year.

British Energy shares closed down almost 5%, or 20p to 390p, as analysts revised their expectations in the wake of third quarter results yesterday.

Elsewhere, gaming group 888 Holdings gave back early gains to fall 2.5p to 107p. The group had seen its shares rise earlier in the session after it said it had made progress in replacing the business lost when US authorities banned internet betting. The update was also seen as positive for rival PartyGaming, which closed up 1.25p at 34.5p.

Meanwhile, investors in software company iSoft were unsettled by reports today indicating that talks over a potential £200 million sale of the business had hit trouble. Shares, which have shown signs of recovery in recent months, were down 12.5%, or 6.5p at 45.5p.

The biggest Footsie risers were Wolseley ahead 95p at 1407p, Vedanta Resources up 65p at 1280p, Xstrata up 84p at 2488p and Man Group up 17p at 579p.

The biggest Footsie fallers were Drax Group off 12p at 662p, Carnival down 25p at 2633p, Tate & Lyle off 5p at 592.5p and Scottish & Southern Energy down 11p at 1526p.