Reuters: Hot Stocks: Merger flurry pushes Britain's FTSE higher

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Merger flurry pushes Britain's FTSE higher Jul 29th 2013, 08:07 Mon Jul 29, 2013 4:07am EDT * FTSE 100 up 0.6 percent at 6,597.23 * WPP rises after Publicis, Omnicom announce merger * Shire up after Perrigo's $8.6 bln bid for Elan * Barclays falls on share sale worries By David Brett LONDON, July 29 (Reuters) - A proposed merger between Publicis and Omnicom to create the world's biggest advertising agency buoyed British peer WPP on Monday, helping to keep Britain's top share index near two-month highs. British drugmaker Shire - long viewed as a takeover target - added 2.1 percent after U.S. generic rival Perrigo agreed to buy Ireland's Elan for $8.6 billion. Aviva was also in focus after a weekend newspaper report said the UK insurer was in talks over a deal to expand in Asia. By 0738 GMT the FTSE 100 was up 42.47 points, or 0.6 percent, at 6,597.26. The index has risen more than 9 percent since June but the rally has recently showed signs of running out of steam - a loss of momentum that a recovery in merger activity might help to offset. "Markets will continue to push higher, helped particularly by the $35 billion merger of Publicis and Omnicom, Aviva's push into Indonesia, and Perrigo's bid for Elan," Mark Ward, head of trading at Sanlam Securities, said. Current No.1 advertising agency WPP topped the list of FTSE 100 risers, up 4 percent after France's Publicis and U.S. firm Omnicom announced their $35.1 billion merger. The head of WPP said he now expected more deals in the sector. "In our view, everybody is a winner in this deal," Barclays' media analysts said in a note. "Interpublic, Havas and WPP shareholders benefit because those agencies are likely to achieve some client wins from the merger disruption." But European merger activity remains subdued, with the 12-month rolling average running at around $160 billion, down from about $240 billion at its 2007-2008 peak, according to Datastream. link.reuters.com/muh55t Clipping the FTSE's wings was banking heavyweight Barclays , which fell 2.4 percent on reports it was planning a possible 4 billion pound ($6.1 billion) capital increase via a sale of shares to address a capital shortfall. "A capital raise ...would dilute interim earnings and there is a risk of future excess capital remaining trapped in the group if regulators move the requirements once again," Nomura said in a note. Aberdeen Asset Management shed 1.1 percent after reporting net outflows of 3.4 billion pounds in the three months to end-June. (Reporting by David Brett; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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