The U.K.’s FTSE 100 Index (UKX) rose in the final minutes of trading, trimming the gauge’s biggest monthly decline since 2009, as merger and acquisition activity pushed InterContinental Hotels Group Plc and Logica Plc (LOG) higher.
InterContinental rallied 6.1 percent after funds managed by activist investor Nelson Peltz bought a stake in the hotelier. Logica Plc soared 69 percent after Canada’s CGI Group Inc. agreed to buy the company for 1.7 billion pounds ($2.6 billion). Xstrata Plc (XTA) led mining shares lower amid concern about the strength of the U.S. economy.
The benchmark FTSE 100 advanced 0.2 percent to 5,306.95 at the close in London, trimming its monthly drop to 7.5 percent. The FTSE All-Share Index also added 0.2 percent today. Ireland’s ISEQ Index lost 0.9 percent as the country voted on the European Union’s fiscal pact.
“We saw yet another volatile session,” said Angus Campbell, head of market analysis at Capital Spreads in London. “This has been a recurring story for indices in the past few weeks that have been unable to sustain any strength due to the ongoing confusion in the euro zone.”
Stocks erased an earlier rally after data showed the number of Americans applying for unemployment-insurance payments rose last week to the most in a month. A separate report from the Institute for Supply Management-Chicago Inc. showed its barometer of business activity in the world’s largest economy dropped to 52.7 in May from 56.2 in April. Readings greater than 50 signal growth.
The FTSE 100 has fallen 11 percent from its 2012 high on March 16 as Greece failed to form a government and Spain’s borrowing costs surged. The gauge fell 1.7 percent yesterday as the cost of insuring against a Spanish sovereign-debt default rose to a record.
InterContinental Shares Surge
InterContintental (IHG) jumped 6.1 percent to 1,526 pence after the world’s largest provider of hotel rooms said Trian Fund Management LP owns 4.27 percent of the company’s shares.
Peltz, the billionaire chief executive officer of Trian and the largest investor in food-chain Wendy’s Co. (WEN), pushes companies to adopt strategies that increase their share prices. Trian had about $3.4 billion in assets under management as of Feb. 1, according to a March filing.
Logica, Sage Rise
Logica soared 69 percent to 110.9 pence, its biggest rally since 1989, after CGI agreed to buy the computer-services provider at a premium of almost 60 percent to yesterday’s closing share price. Logica’s investors will receive 105 pence in cash per share from CGI Holdings Europe Ltd., a subsidiary of Montreal-based CGI.
Sage Group Plc (SGE) the U.K.’s largest software maker, rose 2.4 percent to 256.5 pence.
Berkeley Group Holdings Plc (BKG) led housebuilders higher, jumping 3.8 percent to 1,248 pence as Deutsche Bank AG raised its recommendation for the shares to buy from hold and a measure of house prices in the U.K. increased in May. Taylor Wimpey Plc gained 1.5 percent to 42.65 pence and Barratt Developments Plc rose 1.1 percent to 119.9 pence.
Premier Oil Plc (PMO) climbed 1.8 percent to 340.5 pence after UBS AG raised its recommendation for the crude producer to buy from neutral.
Mining companies declined with base metal prices on the London Metal Exchange. Xstrata fell 1.8 percent to 922.5 pence and Kazakhmys lost 2.2 percent to 665 pence. Antofagasta dropped 1.5 percent to 1,002 pence.
ITV Plc (ITV) dropped 5.7 percent to 72.9 pence after Liberum Capital said television advertising may be weaker in July and August than estimated, citing reports that some advertisers have canceled campaigns.
“The TV advertising market could be down 10 percent plus in July,” analysts wrote in a report to clients. Even so, the broker reaffirmed its buy recommendation for the shares.
Admiral, Thomas Cook
Admiral Group Plc (ADM), the U.K.’s second-biggest private auto insurer, dropped 7.2 percent to 1,039 pence after an antitrust regulator said it plans to refer the motor-insurance market to the Competition Commission after finding that insurers compete in a “dysfunctional way,” pushing up premiums by 225 million pounds a year.
The Office of Fair Trading said it has reasonable grounds to suspect that parts of the private motor-insurance market “prevent, restrict or distort competition.”
Thomas Cook Group Plc (TCG) sank 7.4 percent to 18.75 pence after the company’s first-half adjusted pretax loss widened to 328.3 million pounds from 232.9 million pounds a year earlier. The shares fell even as the company said that bookings have improved.
In Ireland, polls indicated that the country will approve the EU’s fiscal pact in a referendum today.
The Irish will cast their votes from 7 a.m. to 10 p.m. Opinion polls show supporters of the Fiscal Stability Treaty leading by about 18 percentage points.
The volume of shares changing hands on the FTSE 100 was 44 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
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