The FTSE 100 closed down 7 points at 5,152. It had made a tentative start, but gathered strength during the day particularly as US markets opened higher only to give up its gains in the last hour of trading.
Tomkins was the day’s biggest riser. The car and industrial parts maker rose 28% to 294.2p after it announced it was in ‘advanced stage’ negotiations with a consortium comprising the Canada Pension Plan investment board and Onex Corporation for a buy-out at 325p per share. This represented a 41% premium to Friday’s closing price of 230p.
Continuing the theme, the biggest riser on the FTSE 100 was International Power after it confirmed it was back in talks with French rival GDF Suez. Previous attempts to forge a deal were abandoned in March. International Power’s shares lifted 10% to 350p and pulled up the rest of the power sector with them.
Finally, shares in consumer goods group Unilever rose 0.5% to 1,891p after it announced that it would be selling its Italian frozen food business to Permira's Birds Eye Iglo for €805 million. The business had been the subject of a hotly-fought bidding contest and markets were ultimately happy with the price received.
The Debenhams refinancing failed to rouse much interest. It remains, after all, a friendless retailer. The group announced a new £650m senior facility, comprising a £250 million term loan and a £400 million revolving credit facility expiring in October 2013. The new facility extends the group's debt maturity horizon beyond three years and significantly reduces the group's interest charge for the future. But shares closed down 1.6% at 57.4p.
The transport sector was buffeted by a series of broker recommendations from HSBC. Stagecoach Group was rated underweight by the group, sending the shares down 2.6% to 177.5p. FirstGroup and Go-Ahead were rated neutral, while National Express was rated overweight. Shares in National Express were flat at 234.8p.
Industrial engineering group Fenner had a strong day’s trading after it said that it had continued the strong growth seen in the second quarter into the third quarter. Shares rose 4.4% to 225.3p.
Dragging the indices down was BP after US authorities raised concerns that hydrocarbons may be leaking from the sea bed near the Macondo well. If they are, it would suggest further leaks. The shares dropped 4.7% to 387.9p and were the biggest FTSE 100 fallers of the day.
Further down the market cap scale, staffing group SThree dropped 7.1% to YY after it announced a fall of 21% in revenue and said its markets were ‘some way from being fully recovered’. Its number of active contractors fell by 12.1%, as did the average gross profit per day.