Boots speculation drives FTSE
Alliance Boots shares were trading above £10 (€14.7) today as investors suspected that bidder Stefano Pessina will need to increase his proposed offer price.
The stock peaked at 1003.5p, which is above the £10 (€14.7)indicated by Mr Pessina - the company’s deputy chairman – and Kohlberg Kravis Roberts on Friday.
Boots, which later settled 70p higher at £10 (€14.7), was not the only stock fuelled by takeover activity, as the FTSE 100 Index reached mid-morning 14.5 points higher at 6259.7.
ICI led the Footsie risers board for a while amid takeover speculation surrounding the chemicals and paints giant. Shares rose almost 7%, or 30.75p to 495p, after Netherlands-based Akzo Nobel said it had agreed to sell its pharmaceuticals unit to Schering-Plough for £7.5bn (€11bn).
Analysts took the view that the move by Akzo Nobel gave it the firepower to buy ICI.
Medical technology firm Smith & Nephew also enjoyed strong gains on the news that it had acquired Plus Orthopaedics Holdings in a move to expand its European business. The stock rose 19.5p to 635p.
Among other deals, packaging giant Rexam rose by almost 2% – 9p to 529p – after it reached agreement to sell it glass business for £449m (€659m).
Rising commodity prices added to the positive mix, with Anglo American up 68p at 2535p, Vedanta Resources ahead 28p at 1280p, BHP Billiton 17.5p stronger at 1047p.
The developments at Alliance Boots forced shares in Sainsbury’s lower, down 12.25p to 531.75p, after reports at the weekend speculated that the move may reduce the chance of a private equity bid for the supermarket by the bid deadline of April 13. Members of the consortium circling the chain include Kohlberg Kravis Roberts, which is now also involved in the approach to Boots.
