* FTSE 100 down 0.1 pct
* Medtronic buys Covidien, quashing SN deal hopes
* Market extends last week's fall
* Commodity stocks support as Iraq concerns mount
By Alistair Smout
EDINBURGH, June 16 Britain's top share index
edged lower on Monday, weighed down by weakness in Smith &
Nephew as hopes faded for a takeover of the the medical
Smith & Nephew fell 2.7 percent, the biggest decline
in the FTSE 100, after Medtronic, the world's
largest standalone medical device maker, agreed to buy
Dublin-based Covidien Plc for $42.9 billion and relocate
to Ireland, to seek a lower corporate tax rate.
Earlier this month, Bloomberg reported that Medtronic was in
the running to buy Smith & Nephew, which specializes in hip and
knee implants, in a move to help lower its taxes.
The news comes after Stryker ruled out a bid for the
firm, which gained a third between April and June on the
prospect of a takeover.
"If someone thought Smith & Nephew were a decent takeover
target, then this just takes another interested buyer out of the
market," said Toby Morris, senior sales trader at CMC Markets.
"We've seen a couple of deals that haven't materialised, and if
you've got people hanging on for these rumours and there isn't
anything else on the horizon, it's a good time to get out of
Smith & Nephew led declines on the FTSE 100, which fell 7.91
points, or 0.1 percent, to 6,769.94, extending last week's loss
of 1.2 percent.
Last week's drop was prompted by a surge in sterling after
Bank of England Governor Mark Carney said that interest rates
may rise sooner than expected, and as tension built over renewed
unrest in Iraq.
Brent crude oil rose over $113 dollars a barrel on Monday as
Sunni insurgents advanced in Iraq, boosting heavily weighted
commodity stocks even as the majority of shares came under
"The price reflects the deteriorating security situation in
Iraq," strategists at UBS said in a note. "At present, there is
no new significant impact to oil supply (either in northern
Kurdistan or to the giant fields in southern Iraq) but with
Libyan production almost at a halt, the market is understandably
(Reporting by Alistair Smout; Editing by Larry King)