U.K. Stocks Climb as InterContinental Hotels, Aveva Gain

U.K. stocks climbed after markets opened after a holiday, as a measure of U.S. consumer confidence advanced and orders for durable goods in the world’s largest economy unexpectedly increased.

InterContinental Hotels Group Plc jumped 3.4 percent after a report that the world’s largest provider of hotel accommodation rejected a takeover offer from an unidentified U.S. bidder. Aveva Group Plc soared 8.8 percent after posting better-than-forecast earnings. AstraZeneca Plc fell 1.8 percent after Pfizer Inc. abandoned its attempt to buy the drugmaker.

The FTSE 100 Index added 29.19 points, or 0.4 percent, to 6,844.94 at the close of trading in London. The benchmark gauge has risen 6.1 percent from this year’s low on Feb. 4 amid increased mergers-and-acquisitions activity and as ECB President Mario Draghi said policy makers are ready to ease monetary policy if necessary. The broader FTSE All-Share Index gained 0.5 percent today, while Ireland’s ISEQ Index advanced 0.3 percent.

“I think the U.K. is playing catch-up after decent gains in Europe yesterday,” said James Knightley, a senior economist at ING Bank NV in London. “The underlying macro story on the U.K. remains very good. Growing expectations of action from the ECB are generating optimism on European prospects.”

The Conference Board’s index of U.S. consumer confidence increased to 83 in May from 81.7 a month earlier, the New York-based private research group said today. That matched the median forecast in a Bloomberg survey of economists.

Orders for durable goods unexpectedly rose in April, led by demand for military equipment. Bookings for goods meant to last at least three years advanced 0.8 percent after a 3.6 percent gain in the prior month that was stronger than previously reported, Commerce Department figures showed.

InterContinental Hotels

InterContinental Hotels gained 3.4 percent to 2,302 pence, its highest price since at least April 2003. Sky News reported on May 24 that the company’s board recently dismissed a takeover bid from a U.S. entity as too low. The offer valued the hotel group at about 6 billion pounds ($10.1 billion), Sky News said, citing unidentified sources. The owner of the Holiday Inn and Crowne Plaza brands declined to comment on the report.

Aveva rallied 8.8 percent to 2,350 pence. Full-year adjusted earnings per share totaled 89.05 pence, beating the 85.5 pence that analysts had estimated. The provider of information-technology systems also said it’s confident it will achieve its growth targets.

Lloyds Banking Group Plc added 1.6 percent to 77.2 pence after Britain’s biggest mortgage lender said it will sell 25 percent of its TSB consumer bank in an initial public offering next month. The prospectus will be published in mid-June. Individual investors buying up to 2,000 pounds of stock will get one free share for every 20 they buy, as long as they hold them for a full year after the IPO.

ARM Advances

ARM Holdings Plc, the semiconductor designer whose products power Apple Inc.’s iPhone and iPad, rose 4 percent to 917 pence. The Financial Times reported late yesterday that Apple is developing a software platform that would allow iPhone users to control household products like lights, appliances and security systems. The newspaper cited people familiar with the matter.

Separately, Numis Securities Ltd. raised its price estimate on ARM’s shares by 4.5 percent to 920 pence, citing an increased possibility of market-share gains in network infrastructure, which it says could be a growth driver over the next five years.

AstraZeneca fell 1.8 percent to 4,252 pence. Pfizer yesterday abandoned its takeover plan, saying the 69.4 billion-pound bid rejected by its London-based competitor represented full value. Under U.K. takeover rules, Pfizer had until 5 p.m. London time yesterday to make a firm offer. The regulations now require a cooling-off period of at least three months before talks can restart.

Smiths Falls

Smiths Group Plc slipped 1.1 percent to 1,308 pence. Investec Plc cut its recommendation on the producer of security scanners to hold from buy, citing a May 23 forecast of lower profit at its Smiths Detection unit, and macroeconomic risks regarding public-finance budgets in the U.S.

Punch Taverns Plc plunged 29 percent to 10.3 pence, its biggest drop since June 2009. The U.K. pub company told shareholders it’s considering a debt-for-equity swap as part of a revised plan to restructure about 2.3 billion pounds of bonds. The owner of about 4,000 pubs also proposed a rights offering that would help reduce its debt by 600 million pounds.

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