Cigarette maker Imperial Tobacco plans a £675m overseas acquisition and its shares soar to the top of the FTSE 100 leaderboard? No, not more market overexuberance - the situation is slightly more complicated than that.
Imperial owns 60% of Spanish logistics company Logista, as a result of its acquisition of Franco-Spanish tobacco group Altadis. It now has to either sell Logista or buy the remaining shares. Today it announced what seems a low-pitched offer to buy the remaining 40%, a move which is likely to flush out rival bidders. If it then sells the stake at a profit, this is likely to reduce the level of the cash call Imperial needs to help fund the Altadis bid. Analysts said the rights issue could fall from £5bn to around £3.5bn. Hence a 195p rise in Imperial's share price to £24.23.
With a growing number of miners announcing they are halting production at South African mines after a power problem which could last up to three weeks, the sector is still strong. Gold and platinum have touched new record highs, giving many of the miners gains of between 4% and 9%. But Lonmin has failed to benefit, down 99p to £29.30 as UBS cut its target price from £40 to £37. And International Ferro Metals, also affected by the South African problem, has dropped 10p to 79p as it announced it has had to shut off its two ferrochrome furnaces.
Wall Street has just opened more than 80 points higher, helping to support the UK market. The FTSE 100 is now 76 points better at 5951.8.
