* FTSE 100 up 0.3 percent
* Shire jumps after rejecting bid valuing it at $46 bln
* TSB shares up about 14 pct on London stock market debut
By Tricia Wright
LONDON, June 20 British drugmaker Shire
surged on Friday after rebuffing a takeover offer and helped
prop up the FTSE 100, which traders bet will inch further
towards its record high in coming days.
Shire jumped 13.1 percent to a record high after
rejecting a bid from AbbVie Inc which would have valued
the group at around 27 billion pounds ($46 billion), the U.S.
"In my opinion, the move higher in early trade confirms the
growth potential for Shire is huge: as such I could see the
stock stretching to at least 50 pounds," Jordan Hiscott, senior
trader at ayondo markets, said. That would hoist the stock some
18 percent above current levels.
With its tax base in Ireland, where effective corporate tax
rates are among the lowest in the world, Shire, with a mid-sized
market value, has been seen as a prime takeover target for U.S.
Panmure Gordon, which described Shire's rare diseases
business as "one of the hottest assets in biopharmaceuticals",
said it was no surprise to see Abbvie's approach rejected, with
the broker calling its offer "barely adequate".
"Abbvie may be able to increase its offer to more than 50
pounds, which we believe will be required to make this deal
happen", the broker said, but added that would depend on
circumstances regarding the possible benefits of tax inversion.
Panmure increased its price target for Shire to 4,626 pence
- in line with AbbVie's latest offer - and re-iterated its "buy"
recommendation on the stock.
Shire accounted for half of the FTSE 100's 18.69
point gain, or 0.3 percent, to 6,826.80 by 0757 GMT. The index
rose 0.4 percent on Thursday after the U.S. Federal Reserve
reassured investors on monetary policy.
Traders remained bullish on the index, which is sitting
within reach of a record high 6,950.60 set in 1999.
"I think the FTSE is a buy at these levels," said Mark Ward,
Sanlam Securities' head of trading, who expected the FTSE to hit
6,900 in the coming days.
In an otherwise quiet day, shares in TSB Banking Group Plc
were trading at 296.1 pence in early trading following its stock
market debut, up nearly 14 percent on the 260 pence price set
for its initial public offering.
($1 = 0.5864 British pounds)
(Reporting by Tricia Wright; Editing by Susan Fenton)