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Britain's FTSE rises as pounds weakens; bid war hopes lift Inmarsat

The FTSE 100 index rose 0.7 percent to 7,735 points by 0916 GMT, extending earlier gains after data showed that British factory output unexpectedly dropped in April at the fastest pace since 2012.


Reuters 11 Jun 2018, 09:36 AM United Kingdom
  • On the FTSE, NMC Health rose 5 percent after the healthcare provider created a joint venture with Hassana Investment to create a healthcare platform in Saudi Arabia. (Image Credit: Twitter)

British shares rose on Monday, led by export-oriented firms after disappointing UK factory data hit the pound, while hopes of a bidding war boosted satellite provider Inmarsat.

The FTSE 100 index rose 0.7 percent to 7,735 points by 0916 GMT, extending earlier gains after data showed that British factory output unexpectedly dropped in April at the fastest pace since 2012.

A weaker currency makes British exports more competitive.

Sterling slid by more than half a cent against the dollar after the data, which raised concern that the British economy's weakness in early 2018 was persisting.

Shares in big international companies such as British American Tobacco, Shire and Diageo rose between 0.8 and 2 percent, putting the FTSE on track to end at its highest close in one week.

Among mid caps, Inmarsat was a stand-out gainer, up 12.6 percent. The satellite firm rejected on Friday a takeover approach from U.S. firm EchoStar, saying it significantly undervalued the company.

That raised hopes of a possible bidding war.

"We believe the situation could become a bidding war between multiple potential bidders," said RBC Capital Markets.

BCA Marketplace rose 9.7 percent to a record high after rejecting a share buyout offer from private equity firm Apax Partners.

Inmarsat and BCA gains helped send the mid-cap FTSE 250 index up 0.6 percent.

On the FTSE, NMC Health rose 5 percent after the healthcare provider created a joint venture with Hassana Investment to create a healthcare platform in Saudi Arabia.

"This helps further extend a 2016 move into Saudi Arabia, a rather significant geography for growth," said Mike van Dulken, an analyst at Accendo Markets. 

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