Old Mutual Plc climbed 3.2 percent after saying it may sell up to 70 percent of Nedbank. Insurers Aviva Plc and Prudential Plc both rose more than 2 percent. Petrofac Ltd. advanced 3.5 percent to a record high after reporting earnings that topped estimates.
The benchmark FTSE 100 rose 39.56, or 0.8 percent, to 5,234.84 at the 4:30 p.m. close in London. The gauge has climbed 8.9 percent from this year’s low on July 1 as concern eased that Europe’s sovereign debt-crisis will choke off the global recovery. Still, the index lost 1.5 percent last week, its biggest drop in seven week, amid evidence that growth in the U.S. is slowing. The FTSE All-Share Index increased 0.7 percent today, while Ireland’s ISEQ Index gained 0.9 percent.
“The FTSE has put in a fantastic performance today as merger fever gripped the market,” said Manoj Ladwa, a senior trader at London-based ETX Capital Research. “But the feeling remains that this could be a dead cat’s bounce, as once again, the rally has been accompanied by low volume.”
Old Mutual, the biggest insurer in Africa, rallied 3.2 percent to 124.9 pence. HSBC shares advanced 0.8 percent to 639.2 pence.
Nedbank, South Africa’s fourth-largest lender by market value, accounted for more than 12 percent of Old Mutual’s revenue in 2009 and was the biggest money maker for the group outside of Old Mutual’s insurance business.
HSBC may acquire as much as 70 percent of the Johannesburg- based bank, Old Mutual said today. The two U.K. companies are in exclusive talks and have eight weeks to reach an agreement for Nedbank, which has a market value of 71.5 billion rand ($9.8 billion).
Prudential, the insurer that failed to buy AIA Group Ltd. earlier this year, gained 2.4 percent to 571 pence. Aviva, which last week rejected a 5 billion-pound ($7.8 billion) bid for its general insurance businesses in the U.K., Canada and Ireland from RSA Insurance Group Plc, climbed 3.6 percent to 391.2 pence.
RSA will need to raise its offer for the insurance unit by 10 percent to reach an agreement, the Daily Telegraph reported investor Martin Brown as saying.
Petrofac Ltd. surged 3.5 percent to 1,410 pence, a record high. The oilfield services and engineering company posted first-half earnings before interest, taxes, depreciation and amortization of $321.3 million, topping the $283 million average estimate of six analysts surveyed by Bloomberg.
The following shares either rose or fell in the U.K. and Irish markets. Stock symbols are in parentheses.
Amlin Plc (AML LN) slid 3.3 percent, the biggest drop since March, to 408.2 pence. The largest insurer at Lloyd’s of London said first-half profit declined 39 percent to 107.6 million pounds as claims almost doubled.
Kingspan Group Plc (KSP ID) jumped 8 percent to 5.49 euros. Europe’s largest maker of flooring and insulation panels said first-half net income rose to 20.8 million euros ($26.4 million) as it resumed its interim dividend payment.