Market Round Up: Takeover talk spawns trio of risers but Footsie still falters

Shares in a cluster of struggling household names jumped today after being the subject of takeover speculation at the weekend.

The biggest climber was sports retailer JJB Sports, which soared by 0.4p, or 7%, to 6.2p on the back of reports that Invesco, owner of more than a third of its shares, was plotting to seize and restructure the group.

Marks & Spencer notched up a chunky share price rise — up 6.9p, or 2%, to 348p — on reports that a number of leading institutions are looking at the ailing British institution as a potential £6 billion bid target. The retailer’s shares have slipped by almost 50% since late 2007. Shares at Royal Bank of Scotland rose by 3.6p, or 1.6% to 219.6p, suggesting that investors are giving some credence to reports that Brazil’s Itau Unibanco is plotting a takeover of its Citizens retail bank in America which could fetch £10 billion.

But despite these rises, the FTSE 100 was subdued today, falling 16 points, or 0.3%, to 5771.28 points. Investors were pausing for breath after Friday’s excitements when strong US jobs data spurred the blue-chip index to climb 2.2% to a three-month high.

“After a rise like that, you’re always going to get a little bit of a reality check,” said Central Markets chief strategist Richard Perry.

Energy-related companies were among the fallers, as Deutsche Bank cut its price target on Centrica and SSE, amid concerns that weakness in the global economy could reduce the price of the oil and gas they produce.

Shares in Centrica, which has a significant gas production operation in the North Sea, fell 4.8p to 318.7p as Deutsche cut its stance from “Buy” to “Hold” and reduced its target price by 45p to 320p and shares in SSE — formerly known as Scottish & Southern — dropped 10.7p to 1317.3p as it was also downgraded by the bank.

International Airlines Group, parent of British Airways and Iberia, continued its descent, with shares falling another 1.5p to 149.5p, after a disappointing first-half loss pushed them down by 5.2% on Friday.

On the FTSE 250, shares in TeleCity were among the biggest risers, climbing 32p, or 3.8%, to 870.5p as the web-hosting group made good on its promise to declare a maiden dividend, dishing out 2.5p to shareholders for the first six months of the year.

The group said that demand for its infrastructure and services continued to show strong growth on the back of the ever-increasing popularity of the internet. This allowed it to collect £137.3 million of revenues in the first half, up 22.4% on the year before, pushing profit-before-tax for the period up by 18% to £40.1 million.