MARKET REPORT
SHARES in GKN were sent soaring yesterday after Melrose emerged victorious in a closely fought battle to seize control of the engineering giant.
The FTSE 100 Index lifted 11.87 points to 7,056.61, with GKN climbing 9% - or 40p to 463p - after shareholders backed Melrose’s £8.1bn bid with 52.43% share of the vote.
The outcome brings to a close a bitter battle that has raged since January, although there are likely to be renewed calls for Business Secretary Greg Clark to intervene in the deal.
He has already called for “binding” agreements over Melrose’s proposals for GKN. Melrose has stressed its commitment to improving “not only GKN, but the UK economy”, committing to keeping the firm listed in London and headquartered in the UK as part of a five-year pledge.
Unions and MPs have warned over asset stripping and flagged national security concerns, claims which Melrose has rejected.
Across Europe, Germany’s Dax surged 1.3% and the Cac 40 in France closed 0.7% higher.
On the currency markets, sterling drifted 0.4% lower versus the US dollar at $1.40, as figures from the Office for National Statistics (ONS) confirmed economic growth slowed to 0.4% in the final three months of last year.
The ONS revised up growth for the year as a whole to 1.8% from the 1.7% previous estimate, but this was still the lowest since 2012.
The quarterly national accounts data showed Britons turned to debt to support spending in the face of last year’s surging inflation, which outstripped paltry wage growth.
The proportion of total income saved by households dropped to 4.9% in 2017, its lowest level since records began in 1963, the ONS said.
Against the euro, the pound was 0.2% lower at 1.14 euro.
The biggest risers on the FTSE 100 Index were GKN up 40p to 463p, Mediclinic International up 29.2p to 601p, International Consolidated Airlines Group up 17.6p to 614.6p, Fresnillo up 36p to 1,268.5p.
The biggest fallers were Prudential down 60.5p to 1,778.5p, Compass Group down 29.5p to 1,455.5p, Intercontinental Hotels Group down 76p to 4,268p, Johnson Matthey down 50p to 3,042p.