Housebuilder Barratt Developments was today earmarked to join the FTSE 100 Index for the first time in its history.
Barratt’s £2.2bn takeover of rival Wilson Bowden is expected to propel the group into the top flight when the FTSE announces the result of its quarterly reshuffle on Wednesday.
The combined group, worth £3.8bn by market capitalisation after the buy-out, was the strongest contender for promotion based on Friday’s closing share price of 1074p – a move which would see the group gain blue-chip status for the first time in almost 40 years as a listed company.
Barratt’s FTSE 100 debut would see financial services group Bradford & Bingley kicked out of the FTSE 100 less than a year after re-joining London’s benchmark index, according to market value figures from the end of last week.
The mortgage specialist was boosted into the FTSE 100 ranking in last September’s quarterly indices overhaul, which is based on market capitalisation.
Meanwhile pest control-to-hygiene group Rentokil Initial is also on the reserve list to move up to the top tier, with reports it could see power station operator Drax relegated to the FTSE 250.
Rentokil was ousted from the FTSE 100 last September, when it was replaced by newly-listed life insurer Standard Life.
The FTSE 100 group committee is due to meet on Wednesday to decide the latest joiners and leavers, based on Tuesday’s closing prices.
Under the rules, a stock in the FTSE 250 index ranked in 90th position or above will earn a place in the premier index, while a FTSE 100 firm will drop out if it falls to 111th place or below. The changes will take effect from the close of trading on June 15.
The committee is also understood to be set to decide whether beleaguered recent stock market joiner Sports Direct International is eligible to join the FTSE 250.
But the group’s chances may be hindered in view of its share price troubles, as the stock has fallen by nearly a third in value since flotation at the end of February.