logo-loader

FTSE 100 surges on reports of more takeover action

Published: 22:19 16 Jul 2014 AEST

stock_market_chart_350_53c66e49c1c4b

Aerospace and airline shares powered a strong rally by the FTSE 100 index, led by Meggit and Easyjet.

By lunchtime, Footsie was almost 70 points higher at 6,778 with the bullish mood fuelled by reports of another monster US takeover with Fox said to have launched an US$80bn bid for Time Warner. 

In the UK, Meggitt (LON:MGGT) was the FTSE 100’s stand-out stock as chatter from the Farnborough airshow suggested the British aerospace engineer could be in the sights of America’s United Technologies.

According to the Daily Mail, the US suitor could be preparing a 625p per share, £5bn, takeover bid. The share gained almost 10% to trade at 537p per share.

British Airways owner IAG (LON:IAG) and Easyjet (LON:EZJ) joined it at the top of the Footsie leaderboard, the latter getting  a tailwind from a bullish note for Goldman Sachs.

The US broker slapped a 12-month price target of 2010p on the low coast carrier , which implies 62% upside potential. Goldman rates the airline as one of its conviction list buys.

Mining giant Rio Tinto (LON:RIO) was another highlight, up 3% to £33.47, after an interim trading update revealed what is described as a “very strong operating performance”, with a 20% jump in iron ore production.

A better economic performance from China than expected also boosted hopes the recent slump in iron ore prices may have bottomed.

In the loser’s column, Royal Mail (LON:RMG) shares shed 1% to 479p after a warning it may face a material loss from an investigation by French authorities into subsidiary GLS France. Reports later suggested the fin e could be as much as £160mln.

The UK postal service  said the French Competition Authority (Autorité de la Concurrence) is alleging breaches of antitrust laws as part of a broader investigation into the industry across France.

In the small cap market, Tri-Star Resources (LON:TSTR) topped the leader board after rushing to a 23% gain following a new discovery and “significant upside potential” at its Bald Hill antimony deposit in Canada.

Investors, meanwhile, put a bit of sparkle back in Paragon Diamond’s (LON:PRG) share price, with a 3% rally to 4.18p, after the company  confirmed Tuesday close that it was in talks with Titanium Capital Investments about potentially appointing a representative to the board..

City broker  Charles Stanley, in a note this morning, speculated that an offer consisting of some form of capital financing was made to Paragon, that would provide essential capital to help progress its Lemphane project towards commercial production.

News that Tyratech (LON:TYRU) is to launch its Vamousse head lice treatment range in Superdrug and Boots stores pushed its shares around 13% higher to 8.50p. 

The company also announced a £3.5mln placing which will support this UK roll-out – with new shares priced at 7p each.

In volatile early trading shares in digital security system maker SerVision (LON:SEV) rose by as much as 18% to an intraday high of 3.7p, before returning to 3.07p, after the company announced a distribution deal with Beijing SIVI Technology, for orders of around US$2.5mln.


Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

12 hours, 4 minutes ago