Package deal helps Footsie deliver growth

Market report Emma Newlands

Packaging firm DS Smith ended the day among the highest risers on the FTSE 100, helping London’s top-flight begin the week in positive territory.

The firm’s shares hit a record high after it unveiled plans to snap up rival Europac.

David Madden, market analyst at CMC Markets, said: “The company is planning on funding the takeover by conducting a rights issue and taking out a loan.

“The two companies have little overlap in terms of clients and DS Smith predicts the deal will lead to savings of €50 million (£44m), due to synergies. The firm issued a bullish outlook, and is also keen to expand in the US.”

DS Smith’s shares closed the session 16.8p higher at 579.2p, with analysts saying they could target 600p.

It helped push London’s top-flight higher, with the FTSE 100 ending 39.52 points up at 7,741.29, while European indices also pushed higher as political upheaval on the continent calmed.

Sterling struggled to gain ground after data showed that output in the construction industry held steady in May, with firms still playing catch-up from a period of severe weather in the first quarter. The pound fell 0.27 per cent against the dollar to $1.331. Against the euro, the currency was down 0.35 per cent at €1.138.

The biggest risers on the FTSE 100 included Easyjet up 66.5p to 1,780p, Johnson Matthey up 116p to 3,771p, and United Utilities up 21.6p to 801.4p.

The biggest fallers included Evra down 14p to 508.6p, Shire down 92p to 3,943p and Mediclinic International down 9.6p to 598p. The retailer rose despite facing embarrassment when it announced creditors had not approved its restructuring plan in full. The cloud video platform technology developer fell after revealing plans to raise £5.75 million via a share placing.