Shares in 888 Holdings soared more than 15 per cent yesterday amid hopes that Ladbrokes was close to lodging a fresh bid for the online gaming group.
Ladbrokes, down 1p to 131½p, has been in talks with 888, up 6p to 50p, since before Christmas but the two sides have been unable to agree on price, with an indicated offer of about 70p per share not enough to win over 888’s founding shareholders.
However, Reuters reported yesterday that Ladbrokes could come back with a higher offer, valuing 888 at more than £240 million, in the next few days.
Richard Glynn, who took over as Ladbrokes’ chief executive last year, is believed to be keen to improve the company’s position in online, where it is viewed to have lost ground to its rivals.
This is not the first time the companies have been linked, with Mr Glynn’s predecessor Chris Bell holding formal discussions about a takeover in 2006 before they collapsed amid concerns that 888 could be a target of the US Department of Justice over the American ban on internet gambling.
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Overall, the FTSE 100 broke through the 6,000-points level for the first time since the start of the month, capping a tremendous run for the market over the past few weeks.
The market opened higher, with investors welcoming Irish plans for a further €24 billion (£21 billion) recapitalisation for the country’s banks, and made further gains after lunch when data revealed the US unemployment rate fell to a two-year low in March.
Lloyds was the best-performing bank, with its shares rising 3p to 61p, Barclays gained 12p to 289½p and Royal Bank of Scotland was marked up 1½p to 42¼p.
The blue-chip index also got a big lift from BP. Shares in the oil major rose 16p to 470p after analysts at JP Morgan said they looked seriously undervalued. The stock is still recovering from last year’s oil spill in the Gulf of Mexico and has had a bad run of late because of problems with a proposed share swap and exploration deal with Rosneft, the Russian state-owned group.
John Wood Group led the FTSE, up 32½p to 670p, after it said that it had received competition approval to sell its well-support division to GE Energy.
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Reckitt Benckiser also featured on the leaderboard. Shares in the Cillit Bang cleaner and Nurofen painkiller maker rose 86p to £32.88 after getting a push from Nomura, which told clients it was time to stop worrying about the impact of generic completion on the company’s Suboxone drug and instead focus on its innovation and marketing skills in its core business.
Encouraging Chinese economic data helped the mining sector, with Antofagasta up 36p to £13.97 and Rio Tinto up 40p to £44.19.
Shares in 3i were the worst performers, falling 13p to 286p after a downbeat trading update from the private equity group, which said that a weaker performance from its UK companies was offsetting growth in Northern Europe.
Serco was also marked down, falling 10p to 548p, despite winning two contracts with the Department for Work and Pensions for its welfare to work programme. G4S, up 4¾p to 260p, won three of the contracts.
British Airways owner International Consolidated Airlines fell ¼p to 226¾p after a bearish piece of research from Citigroup, which highlighted the strong oil price and exposure to Japan.
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ITV rose 1¼p to 78½p after Liberum Capital suggested it could be interested in buying All3Media, the UK’s largest independent TV producer, which has just asked UBS to conduct a strategic review, with a trade buyer seen as the most likely option.
The FTSE 250 Index rallied 116.75 points to 1,1708.73, with Premier Foods a strong performer. Shares in the Mr Kipling cakes maker gained 1¾p to 29¾p after Morgan Stanley said that its balance sheet was no longer such a drag. The company has recently cut debt and sold off brands such as Quorn putting it in a better financial position and allowing it to focus more on improving its core business. The broker thinks Premier could potentially be worth as much as 40p per share.
Dixons rose ¼p to 12¾p but Moody’s said that it had put its credit rating under review for a possible downgrade, after the company’s profits warning this week.
Elsewhere, New Britain Palm Oil rose 9p to 869p after signing a new five-year, $240 million (£149 million) debt facility.
Future, the magazine publisher behind Total Film and Classic Rock, fell 5½p to 21p after it said that sales fell by between 2 per cent and 3 per cent in the six months to March 31.
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Shares in Cineworld Group rallied 3¾p to 211¼p as brokers considered news that Guy Hands’ private equity firm Terra Firma could sell the Odeon and UCI cinema chain for as much as £1 billion. Analysts at Evolution said that on those figures, Cineworld looked undervalued and could be worth as much as 255p to 360p.
Max Petroleum ticked up 1p to 17p after finding high quality oil at a well in Kazakhstan, which it could start drilling in August this year.
New York: Encouraging employment figures and non-farm payroll data for last month set the tone in early trading on Wall Street. The Dow Jones industrial average stood at 12,415.47 points, up 95.74, at midday, the highest level it has reached this year.