FTSE dips as takeover looks increasingly unlikely

Fading takeover hopes saw brewer Scottish & Newcastle give back some of its recent gains today as it led a downturn for the London market.

Fading takeover hopes saw brewer Scottish & Newcastle give back some of its recent gains today as it led a downturn for the London market.

The FTSE 100 Index retreated 31.7 points to 6381.6 by mid-morning amid continued inflation concerns in the US which look set to reduce the chances a rate cut in the near future.

Scottish & Newcastle declined by more than 3%, or 19.5p at 579p, after comments from SABMiller halted rumours of a buy-out of the group. S&N’s shares have risen sharply in the last month amid speculation it could be a takeover target, with SABMiller cited as a potential suitor.

In contrast, SABMiller travelled in the opposite direction after it posted a 10% rise in beer volumes and said its results for the year would be in line with expectations, despite increased costs. Its shares topped the risers’ board with a gain of 18p to 1137p.

In the second tier, transport group Arriva was off 13.5p at 753p after an analyst at Collins Stewart advised investors to bank profits from the sector following a report in The Times regrading plans to nationalise the bus and rail sector – starting with a test case in Scotland.

FirstGroup declined 17p at 648.5p, Stagecoach was down 2.75p at 181p, Go-Ahead fell 58p to 2603p and National Express slipped 2%, or 26p to 1269p.

Sportswear retailer JJB Sports advanced 4.5p to 264.5p, after it revealed a strong set of annual results, with better-than-expected margins and costs and a forecast-beating performance from its leisure division.

Floor coverings retailer Carpetright topped the FTSE 250 fallers’ board with a loss of 64p to 1074p, or nearly 6%, after it warned profits would be lower than forecast as sales slumped in the final quarter of the year.

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