Shares in mining company Anglo American jumped nearly 10% this morning after is emerged that its rival Xstrata is seeking a £41bn merger with the company.
Anglo American was up by 146p or 9% at £17.69 in early trading.
"We think Anglo's beleaguered management board will respond positively and engage with Xstrata," said analysts at Investec Securities.
However, despite the rise in mining companies, the FTSE 100 was pulled down by weak energy stocks. Britain's leading index was down 48.13 points or 1.11% at 4297.80.
Energy stocks were lower as crude fell to $69 a barrel. Shares in BG Group were down 25p or 2.35% at £10.67 while Royal Dutch Shell was down 32p or 2.01% at £15.58.
