The biggest takeover of a UK company for five years and a rush of other bid activity drove the FTSE 100 Index beyond the 5300 barrier today.
Mobile phone operator O2 brought smiles to the faces of traders after agreeing to be taken over for £17.7bn by Spanish firm Telefonica, sending its shares up more than 25%.
And with bid approaches for the likes of Pilkington, P&O and Mowlem also exciting investors, the FTSE advanced 103.9 points to close at 5317.3.
The buying spree was mirrored across the index as only four stocks ended the session in negative territory, including utility Severn Trent which lost 3p to 957p after confirming it was being investigated by the Serious Fraud Office.
O2 closed 41.5p higher at 205.75p to stand above the 200p-a-share offered by Telefonica, indicating that many investors feel there is a chance of a counter bid.
Hopes of further consolidation ignited the telecoms sector as BT Group added 6.25p to 213p and Cable & Wireless rose 4.75p to 115.5p.
Vodafone gained 4.75p to 148.25p after agreeing to sell its operations in Sweden.
Signs that analysts viewed second-tier stock Virgin Mobile as the next bid target were confirmed as its shares jumped 4% or 11p to 300p.
Oil majors Royal Dutch Shell and BP contributed to the strong session with the former up 34p at 1843p and its rival 6.5p stronger at 624p.
P&O shares were full steam ahead in the FTSE 250 Index – up 93.75p or 30% to 404p – as it confirmed a tentative approach from an unnamed party.
The increase reflected expectations of a bidding war for the company and was followed by a 5% hike for fellow operator AB Ports, which stood 25.75p higher at 547.75p.
And shares in glassmaker Pilkington were up 21% or 26.5p to 153.25p – valuing it at around £2bn – after confirming that it was the subject of bid interest from Japanese firm Nippon Sheet Glass.
Rupert Bear boosted Entertainment Rights after the company announced it had agreed a £6m deal with Express Newspapers to take a two-thirds stake in the character.
Shares were up 6% or 1.5p to 28.25p as Entertainment Rights outlined plans for Rupert including television stardom.
Elsewhere, Peacock was up 7.25p to 334p after management finalised the terms of a long-awaited buy-out, while John David Group – owner of JD Sports – improved 4.25p to 246.75p after announcing it had bought the collapsed retail chain Allsports.
One of the few companies in negative territory was Clinton Cards after it plunged into the red at the half-year stage and said its core Clinton brand had seen sales continue to deteriorate.
Shares slipped 2.75p to 65p.
The top flight’s biggest risers were O2 up 41.5p to 205.75p, Amvescap ahead 19.25p to 355.5p, Hanson up 30p to 572.5p and Compass Group up 9.5p at 190p.
The heaviest fallers were Smith & Nephew down 5.5p to 478p, Morrisons down 1.25p to 163.5p, Severn Trent off 3p to 957p and GlaxoSmithKline down 4p to 1469p.
References: EGi News 31/10/05
