British insurer Friends Provident is down sharply after rejecting a takeover offer and ultimatum from US buyout group JC Flowers.
It is down 10% to 117.5p.
Earlier today, JC Flowers said it did not intend to raise its 150p-a-share offer, which values Friends at £3.5bn. JC Flowers, which has been stalking the insurer since the start of this year, said it would walk away if Friends did not enter talks by Friday.
But Friends has refused to buckle. Earlier, it repeated a statement from March 31 that JC Flowers' offer "significantly undervalues Friends and its prospects".
In the leisure sector, Whitbread is up 2% at £11.43p on renewed speculation that it will swap some of its remaining pubs for Mitchell & Butler's Innkeeper's Lodge sites.
This morning, Mitchells & Butlers, which owns the All Bar One and O'Neill's pub chains, said a number of private equity firms had offered to take a stake in it. It also said it was interested in buying Punch Taverns' managed pub division.
In the US, the Dow Jones industrial average has opened virtually unchanged at 12,342 points.
Earlier, US retail figures unexpectedly rose 0.2%, helped by a jump in gasoline sales. But excluding those gasoline figures, retail sales were flat last month, suggesting US consumers are wary about spending amid growing fears that the economy is close to recession.
The rise in retail sales helped calm frayed nerves in Wall Street after Wachovia, America's fourth-largest bank, said it was raising $7bn (£3.52bn) through emergency fundraising.
It joins a long line of financial firms that have been hit by the fallout from the US subprime mortgage crisis.
