London’s blue-chip index closed higher on Friday, dragged up by a double-digit jump in Vodafone shares and a fresh takeover bid for easyJet, even as Middle East tensions kept sentiment fragile.
The FTSE 100 finished up 24.84 points, or 0.2%, at 10,497.29, recovering from a two-week low of 10,472.45 hit on Thursday. The FTSE 250 rose 130.85 points, or 0.6%, to 23,371.41, and the AIM All-Share added 1.57 points to 763.82. Over the week, the FTSE 100 was still down 1.7%.
Vodafone was the standout riser, closing up 12.6% at 110.10p, after Emirates Telecommunications Group, known as e&, agreed to sell its entire 16.2% stake in the telecoms group to Vega, an investment vehicle owned by French billionaire Xavier Niel’s family, for £4.4bn. The stake was priced at 112.5p a share, a premium to Thursday’s close.
Vega said it has no intention of making a full takeover bid and plans instead to engage with the UK government over the transaction. Vodafone confirmed its relationship agreement with e& has ended, and that Hatem Dowidar, the operator’s nominee director, has stepped down from the board with immediate effect. BT Group shares rose 1.6% in sympathy.
JPMorgan analyst Akhil Dattani noted that Niel is “not known to be a passive investor,” and said the market would be watching for signs of further acquisition interest in Vodafone’s German and UK operations given their scale.
EasyJet shares jumped 14.3% after the airline’s board backed an improved takeover proposal from US private equity firm Apollo Management, worth £5.7bn, or 715p a share, and dropped its earlier support for a rival bid from Castlelake at 690p. EasyJet called the Apollo offer a “superior outcome” for shareholders. Castlelake said it was considering its options.
JPMorgan’s Harry Gowers said the bidding war was unlikely to be over, suggesting “we may see further offers from other financial or potentially strategic bidders.” RBC Capital Markets took a more cautious view, noting Castlelake had already been drawn up from an original 560p proposal and that some peers now screen more attractively than easyJet on a price-to-net-asset-value basis.
Recruiter Hays leapt 20% on the FTSE 250 after saying it expects full-year profit at the top end of market forecasts, even as it described trading conditions as “challenging.” Net fees fell 4% year on year in the final quarter, a smaller decline than the 6% drop analysts had pencilled in.
St James’s Place was the session’s heaviest faller, down 8.6%, after a report that Sovereign Wealth, one of its larger partner firms, plans to leave for rival consolidator Soderberg and Partners. Analysts at RBC Capital Markets called it a “worrying development,” arguing it was the clearest sign yet that the wealth manager’s platform has struggled to retain advisers since it overhauled its charging structure last summer.
The moves came against a backdrop of renewed Iran-US tensions, after President Donald Trump said the ceasefire between the two countries was “over,” even as Washington indicated it would continue talks. Brent crude eased to $75.86 a barrel, having briefly topped $80 earlier in the week. Kathleen Brooks, research director at XTB, said investors appeared to be treating the latest flare-up calmly, with “fears about an escalation in tensions between the US and Iran” looking overdone.
Attention now turns to a heavy UK data week, with GDP, trade and industrial production figures due on 16 July, alongside US inflation numbers and a Bank of Canada rate decision.
