London midday: Stocks rise as BG Group takeover sparks M&A hopes

London's FTSE 100 was fluctuating around the 7,000 level by Wednesday lunchtime as M&A activity gave sentiment a lift, with BG Group soaring as much as 40% after a takeover offer from Shell.

Stocks across the oil and gas sector were rising strongly on speculation that Shell's move may spark a fresh wave of industry consolidation that hasn't been seen since the late 1990s.

Meanwhile, press reports were also highlighting the possibility of an approach by French media giant Vivendi for Sky and a Google takeover of Twitter.

The Footsie was up 0.54% at 6,999.51 by midday. The index has not closed above the 7,000 level since 24 March.

"The FTSE continued to dance around the 7,000 mark, flitting above and below the figure without ever full committing to crossing that significant threshold. Nevertheless, it’s the FTSE’s fourth consecutive positive day of trading, and there is one clear reason for the index’s strong performance this Wednesday: Shell," said Spreadex analyst Connor Campbell.

Aside from corporate newsflow and M&A rumours, the focus of Wednesday's session was likely to be on the Federal Reserve which releases minutes from its policy meeting on 17-18th March at 18:00.

"Any hawkish comments on rates will likely be tempered by Friday's weak payroll numbers so the minutes are a little behind the curve but interesting nevertheless," said analysts at Deutsche Bank.

The release of Alcoa's first-quarter results later on also marks the unofficial start of quarterly earnings season in the States.

BG Group soars, oil and gas stocks rise

BG Group was the standout riser of the morning in London, up 36% after its board recommended a takeover offer from Shell, though shares in the latter dipped into the red. The bid values BG at around 1,350p per share, a 50% premium to its closing price of 910.4p on Tuesday. If the transaction completes, BG shareholders will be left with a 19% stake in the enlarged company.

Others in the sector were making gains on hopes that the deal will spark a new round of industry M&A. BP, BHP Billiton, Ophir Energy, Tullow Oil, Premier Oil and Soco International were all on the rise.

Sky was in demand amid bid speculation that France’s media giant Vivendi could table a bid for the UK listed TV and broadband operator. Though Vivendi representatives denied Sky is an acquisition, market participants piled into Sky stock on an earlier Reuters report citing sources, that Vivendi could pay up to £28bn for the company.

Vodafone shares were pulling back slightly. The stock advanced on Tuesday after UBS highlighted the possibility of a bid for the telecoms group from US cable operator Liberty Global.

Mining stocks were also making decent gains, including Rio Tinto, Anglo American and Antofagasta.

Experian shares received a boost by Credit Suisse which lifted its stance on the information services and credit checking group from 'neutral' to 'outperform', saying it expects a "re-rating".

Market Movers
techMARK 3,204.81 +0.14%
FTSE 100 6,999.51 +0.54%
FTSE 250 17,595.28 +0.42%

FTSE 100 - Risers
BG Group (BG.) 1,241.00p +36.31%
Experian (EXPN) 1,186.00p +3.13%
BP (BP.) 468.20p +2.94%
Anglo American (AAL) 1,048.00p +2.19%
BHP Billiton (BLT) 1,498.00p +1.87%
Rio Tinto (RIO) 2,914.00p +1.82%
London Stock Exchange Group (LSE) 2,569.00p +1.74%
Sainsbury (J) (SBRY) 273.40p +1.48%
Sky (SKY) 1,036.00p +1.27%
Mondi (MNDI) 1,366.00p +1.19%

FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 2,099.00p -4.96%
Royal Dutch Shell 'A' (RDSA) 2,051.50p -2.03%
Hikma Pharmaceuticals (HIK) 2,179.00p -1.85%
ITV (ITV) 252.30p -1.83%
Aviva (AV.) 551.00p -1.78%
Dixons Carphone (DC.) 413.70p -1.55%
Ashtead Group (AHT) 1,079.00p -1.46%
TUI AG Reg Shs (DI) (TUI) 1,213.00p -1.38%
Marks & Spencer Group (MKS) 553.50p -1.34%
Persimmon (PSN) 1,660.00p -1.25%

FTSE 250 - Risers
Tullow Oil (TLW) 329.70p +9.79%
Ophir Energy (OPHR) 156.30p +7.35%
Infinis Energy (INFI) 191.40p +5.34%
Fidelity China Special Situations (FCSS) 160.00p +4.99%
PayPoint (PAY) 893.00p +4.94%
Go-Ahead Group (GOG) 2,548.00p +4.90%
Drax Group (DRX) 389.60p +4.09%
RPS Group (RPS) 241.80p +3.33%
Michael Page International (MPI) 548.50p +3.30%
Barr (A.G.) (BAG) 661.00p +3.20%

FTSE 250 - Fallers
Bellway (BWY) 1,928.00p -3.07%
JD Sports Fashion (JD.) 470.00p -2.06%
Poundland Group (PLND) 361.10p -1.63%
Genus (GNS) 1,405.00p -1.61%
Berkeley Group Holdings (The) (BKG) 2,634.00p -1.57%
Home Retail Group (HOME) 163.50p -1.21%
Millennium & Copthorne Hotels (MLC) 581.50p -1.19%
Dignity (DTY) 1,916.00p -0.98%
National Express Group (NEX) 290.90p -0.89%
AL Noor Hospitals Group (ANH) 999.00p -0.89%