Takeovers fail to boost FTSE

A swirl of takeover activity among blue-chips failed to prevent the London market retreating from six-and-a-half year highs today.

The FTSE 100 Index was 32.3 points down at 6571.4 at mid-morning, as overnight caution in US and Asian markets saw London’s leading shares slip back through the 6,600 barrier breached in the previous session.

Media giant Thomson’s £8.8bn move to acquire rival Reuters and continued bid speculation over supermarket chain Morrison saw the two firms top the Footsie risers.

Thomson’s plans to create a “global leader” in financial news and information sent Reuters more than 4%, or 26.75p, higher to 641.25p, building on Friday’s 25% leap.

Supermarket chain Morrisons followed it up the leaders’ board as speculation of a private equity bid continued to bubble. The stock advanced more than 3%, or 12.25p, at 341.5p.

Royal Bank of Scotland was also 8p ahead at 658p as the firm was seen by analysts as probable winner in its battle with Barclays for Dutch bank ABN Amro.

Meanwhile, US aluminium maker Alcoa’s hostile takeover bid for Canadian rival Alcan sparked interest in mining stocks in an otherwise quiet day for corporate news after the long Bank Holiday weekend.

A raft of mining heavyweights secured a place on the risers’ board amid upgrades and rising commodities prices, with Rio Tinto up 52p at 3362p, Antofagasta ahead 1.75p at 571.75p and Kazakhmys up 2p at 1197p.

Among the fallers, Hanson was off 21.5p at 1049p, losing some of the gains seen at the end of last week after Germany’s HeidelbergCement said it was considering a bid for the British building materials firm.

In the second tier, low-cost carrier easyJet was down more than 6%, or 45p, at 635p, after revealing its revenues per seat declined last month despite rising passenger numbers.

Music group EMI went the other way, up 6.25p at 252.5p, as broker ABN Amro said a bidding war between private equity firms could break out for the business.