Smith and Nephew is leading the FTSE 100 lower as hopes of a bid for the medical equipment group faded.
There had been speculation that US rival Medtronic could be interested in a takeover of the UK hip and knee implant specialist. But Medtronic has now agreed to buy Dublin-based Covidien for $42.9bn and relocate to Ireland for a lower tax rate.
With another potential predator Stryker ruling out a bid earlier, Smith and Nephew's shares have lost some of their takeover froth, falling 26p to £10.45. Toby Morris, senior sales trader at CMC Markets, told Reuters:
We've seen a couple of deals that haven't materialised, and if you've got people hanging on for these rumours and there isn't anything else on the horizon, it's a good time to get out of them.
Overall the FTSE 100 has slipped 14.55 points to 6763.30 as the week gets off to a fairly quiet start. Geopolitical worries - the unrest in Iraq, Ukraine and Russia in dispute over gas shipments - are keeping investors on the sidelines.
EasyJet has dipped 20p to £14.37 following reports in Germany that Lufthansa was considering setting up a new low-cost platform to compete with the budget carriers.
Airlines were also weaker as the oil price held steady at more than $113 a barrel in the wake of the violence in Iraq.
Commodity companies and exploration groups gained ground on the strong crude price, with BHP Billiton 27p better at £18.77 and Rio Tinto rising 25.5p to £30.43 as Exane BNP Paribas issued an outperform rating. Tullow Oil has added 9p to 850.5p.
A rise in the gold price as investors seek havens from the potential storm has helped push Mexican precious metals miner Fresnillo 21p higher to 828p and Russia's Polymetal up 26p to 564p. The two are the biggest risers in the FTSE 100 and FTSE 250 respectively.
