FTSE on back foot despite S&N takeover buzz

Persistent takeover speculation regarding brewer Scottish & Newcastle saw shares in the group climb 6% today.

S&N was ahead 34p at 619.5p as rumours pointed to Carlsberg as a potential suitor after it changed its share structure in a way that would allow greater scope for acquisitions.

But the wider market was on the back foot after falls in commodity stocks saw the FTSE 100 Index 31.3 points lower at 6438.1 by lunchtime.

Heavily weighted miners dragged on the blue-chip index after a slide in copper prices. BHP Billiton set the pace with a loss of 26p to 1119p, Vedanta Resources was 27p lower at 1381p and Kazakhmys slipped 19p to 1143p.

Oil stocks were also struggling as BP dropped 8.5p to 562.5p, BG Group declined 8.5p to 727p and Royal Dutch Shell slipped 17p to 1773p.

Broadcaster ITV was on the front foot, ahead 2p at 117.9p, as investors speculated over the future of Sky’s stake in the company. Traders bought into the stock on the grounds that Sky may be forced to sell its stake in the company, effectively putting ITV back on the market. BSkyB shares were up 0.5p at 569p.

Royal Bank of Scotland slid 1%, or 18p to 1952p, after it revealed it intended to make a hostile bid for Dutch bank ABN Amro. It said it would press ahead with an offer for the group, despite ABN’s earlier backing of a £45.7bn (€70bn) deal with Barclays. Barclays gained more than 2%, or 15p to 733.5p.

Publishing group Pearson was up 3p at 866.5p after its latest trading update confirmed a solid performance since the start of the year which should see it meet its overall revenue growth target of between 4% and 5% during 2007.

In the second tier, bus and rail group National Express dipped 2p to 1238p after it acquired Spanish transport firm Continental Auto for £450 million and reported good growth during the first three months of the year.

Telecommunications group Spirent was the highest riser in the index after it announced cost savings of up to £21.5m (€31m) during the remainder of the year on the back of restructuring plans. The stock was up 7.75p at 74.5p.

Engineering group Bodycote was 2p higher at 317p after a renewed offer proposal from Switzerland's Sulzer. Sulzer raised its offer to 340p per share, up from a previous offer of 322p, ahead of a Takeover Panel deadline tonight.