logo-loader

FTSE100 closes to the good with big pharma in focus

Published: 12:43 22 Apr 2014 EDT

london_350_53569c6e9ebef

Britain's blue chip shares finished the first day after the easter break 56 points ahead.

Footsie closed out at 6,681 but had been at the 6,700 mark earlier in the day.

Big pharma firms were the ones to watch today with GlaxoSmithKline adding 5.2% to 1,640p and AstraZeneca (LON:AZN) finishing up 4.7%. The  biggest riser was Shire (LON:SHP), which gained 7.6%.

It came as mega deal talk was rife in the sector and US broker Citi issued a 'buy' note on the Shire stock.

Meanwhile, AstraZeneca rose as speculation mounted that the giant Pfizer could make a takeover bid. GlaxoSmithKline (LON: GSK) was also up after it emerged it was to join forces with Swiss giant Novartis in consumer health care.

Glaxo shareholders are set to benefit from a £4bn capital return funded by proceeds from the deal, where Glaxo will sell its cancer drug business to Novartis for $16bn and buy Novartis's vaccine business for an initial $5.25bn.

Across the pond, the sector was also under the spotlight with Botox maker  Allergen, reportedly the subject of a bid by hedge fund manager Bill Ackman and Valeant Pharmaceuticals for $50bn. 

Jasper Lawler, of CMC Markets, noted: "After such a long time without the kind of mega-mergers seen in telecoms and utilities, the pharmaceutical sector is seeing a surge in speculation over who will be next. These kinds of deals have really not been around since Pfizer’s $68bn acquisition of Wyeth in 2009.

"Arguably that’s because the deals don’t historically generate the value that management would have you believe. It could well be a sign of these exuberant times that executives can now get the financing and investor support again to do these kinds of mega deals."

Meanwhile, away from Footsie, it would be impossible to write about the day's news without mentioning manager David Moyes departure from one of the best known football clubs in the world , Manchester United.

He was sacked from the club, which is listed in New York, after taking over from Sir Alex Ferguson only ten months ago.

In the junior markets, it was something of a different picture. FTSE AIM All-share was down around six, while FTSE AIM 100 closed down 43 at 3,659.

Among the juniors, Bullabulling Gold (LON:BGL) shares gained 4% as it rejected the approach from rival Aussie gold miner Norton Gold Fields 

It said it was inadequate and not justifying a change in control.

Norton is offering 7 cents cash per share, which the Bullabulling board said does not adequately reflect either the company's value or the value of its gold project.

It added it was only advised of the intentions of Norton late Thursday April 17.

A formal statement explaining its reasons is being prepared and in the meantime the Bullabulling board is still advising shareholders to take no action.

Sticking to mining, Shanta Gold (LON:SHG) today posted an underlying profit as production at its New Luika mine in Tanzania picked up sharply in the second half.

Shares edged up slightly higher on the news.

Revenues in 2013 came in at US$66mln, excluding US$22mln of pre-production income, which generated profits US$0.7mln, stripping out one-offs and share-based payments.

Other notable risers were Igas Energy (LON:IGAS), which has interests in the East Midlands, North West and elsewhere, which went up 11.9% while partner Egdon Resources (LON:EDR) rose 6.10%.

Shares in the shale gas explorers were boosted as the government indicated the Queen’s Speech would include changes to the trespass law to make exploration easier.

According to the BBC, shale firms will be able to drill horizontally without the need for landowner approval, though they will still need to get planning permission while landowners will also get compensation.

Fracking or hydraulic fracturing involves the use of horizontal wells and high-pressure water, sand and chemicals to release hydrocarbons trapped in shale rock formations.

ARway.ai announces multiple new SaaS developer contracts in both the United...

ARway.ai (CSE:ARWY, OTCQB:ARWYF) Chief Executive Officer Evan Gappelberg joined Steve Darling from Proactive to announce multiple new SaaS developer sign-ups for its augmented reality experience platform, focusing on AR indoor navigation. These partnerships represent significant milestones in...

2 hours, 5 minutes ago