* FTSE 100 up 0.1 pct; Shire top riser
* Whitbread rallies after strong update
* Proposed store management shake-up buoys Morrisons
* Lloyds up; raises minimum price for TSB listing-sources
By Tricia Wright
LONDON, June 17 Bid speculation around drugmaker
Shire, a strong update from Premier Inn-owner Whitbread and a
proposed shake-up of Wm Morrison Supermarkets' store management
helped keep Britain's top shares buoyant on Tuesday.
Shire jumped 3.5 percent, providing the biggest
boost for the FTSE 100, after sources told Reuters the
healthcare group has hired investment bank Citi as an
adviser, expecting to receive takeover approaches.
"We've been buyers of Shire recently and on the back of this
we'd look to add to positions," said Manoj Ladwa, the head of
trading at TJM Partners.
Healthcare companies have seen a wave of merger and
acquisition speculation in the past two months. Shire has been
tipped as a possible target partly because of its tax base in
Ireland, where effective corporate tax rates are among the
lowest in the world. The stock has risen nearly 30 percent since
"You've got at least a third of the value of any bid priced
in, but I think you've still got a fair amount of upside
potential even if you buy at this sort of level," TJM's Ladwa
said. He said the stock, now trading at around 36 pounds
($60.45) per share, could hit 50 pounds if a bid materialises.
Shire added 2.8 points to the FTSE 100, which was up
7.13 points, or 0.1 percent, at 6,761.77 points by 1507 GMT.
The second-best riser was Morrisons, up 2.4 percent
after it proposed changes to its store management that would
lead to around 2,600 redundancies.
Morrisons, which issued a profit warning in March, has seen
its shares lose around 30 percent of their value this year.
"I think you'll see bargain hunters stepping in ... They've
had problems, there's obviously a big management reshuffle and a
redesign - and the market's seeing that as a positive," said Ed
Woolfitt, the head of trading at Galvan. He reckons the shares
may move back towards 240 pence, the 200-day moving average.
They now trade around 193 pence.
Whitbread, Britain's biggest hotel and coffee shop
operator, reported a robust start to the year, driven by strong
growth at its Premier Inn hotels. Its shares rose 2.2 percent,
making it the third top riser.
Lloyds Banking Group, meanwhile, advanced 1.5
percent. Lloyds has narrowed the price range for the sale of a
25 percent stake in TSB to between 250 pence and 270 pence,
sources familiar with the matter told Reuters.
The FTSE had fallen in three of the previous four sessions,
pressured by geopolitical concerns ranging from violence in Iraq
to tensions between Russia and Ukraine, as well as speculation
that the Bank of England will tighten policy before year-end.
The index briefly extended its gains on Tuesday after
British inflation fell more sharply than expected in May, giving
the BoE some room to keep interest rates near record lows.
($1 = 0.5956 British pounds)
(Additional reporting by Francesco Canepa; Editing by Larry