With leading shares drifting lower, Vodafone is bucking the trend on hopes of merger activity in the telecoms sector.
French telecoms group Altice has agreed to buy Suddenlink for $9.1bn to enter the US cable market, while Liberty Global - often seen as a merger partner for Vodafone - has described the UK company as “a great fit.” Liberty chairman John Malone told Bloomberg:
We’ve looked at that [a combination with Vodafone] from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe.
He compared Vodafone to “a big banana in the jar,” and added: “The question is: how do you get your hand out of the jar with the banana.”
So a day after disappointing final results sent its shares lower, Vodafone has rebounded 7.35p to 233.95p, the biggest riser in the leading index.
Overall the FTSE 100 has dipped 16.46 points to 6978.64 ahead of minutes from the last meeting of the US Federal Reserve, and amid renewed fears Greece will run out of cash before it manages to reach a deal with its creditors.
On a busy day for results Burberry is down 77p at £17.31 as the luxury goods group lowered its guidance for 2016 due to adverse currency movements.
Marks & Spencer has slipped 5.5p to 580p despite news of the first full year profit rise - up 6% to £661.2m - for four years and a plan to return excess cash to shareholders. Its shares have rallied in recent weeks, and traders said the day’s fall was probably due to some profit taking.
Rival Next - which faces a £22.4m tax bill - is 45p lower at £73.80.
Engineering group GKN has moved ahead 1.4p to 367.7p as Investec moved from hold to buy with a price target lifted from 375p to 410p:
GKN’s shares have underperformed European Auto and Aerospace peers year to date. We believe this is due to concerns over short-term headwinds and the sustainability of improved execution. A solid first quarter statement and analyst event have increased our confidence that improving performance is sustainable. From 2016, we expect the headwinds to subside and GKN to benefit from above market growth in its Autos business and the ramp up of key aerospace programmes driving a step up in profit, cash and a re-rating.
Tony Cross, market analyst at Trustnet Direct, added:
GKN is .. a notable riser with some speculative bidding here in the wake of [a] massive air bag recall by Takata which could bode well for their testing division.
Elsewhere Allied Minds, a science and technology group, has fallen 55.5p to 594.5p - the biggest loser in the FTSE 250 - as Jefferies placed 16m shares on behalf of Invesco at 565p each, raising £90.4m.
