Takeover talks boost FTSE

Takeover talk among property and retail stocks helped drive the London market to gains today.

On a slow day for corporate news, the speculation around Hammerson and Argos owner Home Retail Group ensured the FTSE 100 Index rose 19.1 points to 6640.5 at mid-morning.

Traders are looking to key economic data from the US later today to give direction to the market.

Hammerson was nearly 3%, or 40p, higher at 1632p as traders cited rumours of a potential 1900p a share bid from British Land. The talk helped lift sector peers including Segro, formerly Slough Estates, which was 14p ahead at 730p.

Meanwhile the rumour mill lifted Home Retail Group more than 2% with market talk of a potential bid from private equity firm CVC. The stock was ahead 12p at 483.75p.

Other gainers included pubs chain Punch Taverns as investors eyed potential gains from the group's property portfolio.

The stock saw a 2% gain – up 30p at 1374p – as a Goldman Sachs note argued a “compelling case” for the company to convert to tax efficient Real Estate Investment Trust status.

Firming metals prices also helped mining stocks with BHP Billiton ahead 10p at 1240p and Vedanta Resources up 15p to 1505p.

Pharmaceutical firms were out of favour with AstraZeneca down 16p at 2671p as the firm completed a successful tender offer for US firm MedImmune. GlaxoSmithKline shipped 9p to 1301p as US regulators declined to give a fast-track review to the company’s experimental cancer vaccine Cervarix.

Shire, which had previously led the Footsie fallers, recovered some of its earlier losses, with the stock 2p down at 1185p.

Elsewhere, model train group Hornby’s shares were off 10.75p at 275.25p – a fall of more than 3% – as the firm disappointed with lower than expected profits.