Britain's FTSE rebounds, Shire hits record

Mon Jul 14, 2014 4:45am EDT

Related Topics

* FTSE 100 up 0.8 pct; dropped 2.6 pct last week

* Shire up 2.6 pct on new AbbVie offer

* Sports Direct boosted by partnership with MySale

By Tricia Wright

LONDON, July 14 (Reuters) - UK shares bounced back on Monday after hefty falls last week, with drugmaker Shire hitting an all-time high on a bid offer from U.S. firm AbbVie .

Shire said it was ready to recommend a new offer from AbbVie, which returned with a fifth bid valuing the London-listed drugmaker at 31.3 billion pounds ($53.3 billion).

AbbVie, which wants to buy Shire to cut its tax bill and diversify its product line-up, made the offer of 53.20 pounds per share on Sunday after the Dublin-based group asked for an improvement on the previous 51.15-pound-per-share offer.

But traders were cautious.

"What we're doing this morning is basically closing down per client half of the exposure, so we're banking something good on the bounce and leaving the other half on just in case (it climbs to 53)," Galvan's head of trading, Ed Woolfitt, said.

Shire shares rose 2.6 percent to 4,998 pence, with trading volume at 90 percent of its 90-day daily average after about an hour's trade, against the FTSE 100 index on just 6 percent.

The FTSE 100, which dropped 2.6 percent last week to post its biggest weekly drop since March, had climbed 52.13 points, or 0.8 percent, to 6,742.30 points by 0818 GMT.

Investors put aside concerns about euro zone banks and looked ahead to corporate earnings, traders said.

"Corporate earnings have started to trend to the upside and momentum indicators suggest we are going to continue to see forward-looking estimates improve alongside EPS estimates," Guardian Stockbrokers' director of trading, Atif Latif, said.

Solid gains were also seen from sports retailer Sports Direct, up 4.4 percent, after it announced plans to launch in Australia and New Zealand by forming a partnership with MySale Group. MySale rose 4.8 percent.

Elsewhere among the risers, Rolls-Royce tacked on 1.4 percent as European planemaker Airbus kicked off the Farnborough Airshow with confirmation it would sell revamped versions of its A330 wide-body jet powered by Rolls-Royce Trent 7000 engines. ($1 = 0.5877 British pounds) (Editing by Louise Ireland)

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