4 Min Read
* FTSE 100 up 1 pct in biggest daily gain since April
* Shire up 1.9 pct on new AbbVie offer
* Sports Direct boosted by partnership with MySale
By Francesco Canepa
LONDON, July 14 (Reuters) - Britain's top equity index was set to post its biggest daily gain since April on Monday, helped by rises in bid-target drugs firm Shire and retailer Sports Direct.
Shares in Shire hit a record high of 5,045 pence in brisk volume after its board said it was ready to recommend a new offer from AbbVie. The new bid - the fifth by AbbVie - values Shire at 31.3 billion pounds ($53.3 billion).
Some traders saw the announcement as opening the door to further bids, with AbbVie's 5,320-pence-per-share offer as a starting point.
"The board could have been minded to accept AbbVie's offer as a floor, and as it has now established that it is willing to sell the company (unlike AstraZeneca ), (it) is effectively putting a for-sale sign in the window," a London-based event-driven trader said.
AbbVie, which wants to buy Shire to cut its tax bill and diversify its product line-up, raised its bid after the Dublin-based company asked for an improvement on its previous 5,115 pence-per-share offer.
Other traders were more cautious on Shire's stock, which has surged more than 40 percent in the past month.
"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)," said Galvan's head of trading, Ed Woolfitt.
Shire shares rose 1.9 percent by 1432 GMT on volume that was three times higher than its full-day average for the past three months. FTSE 100 volume was less than 40 percent of the index's own average.
The FTSE 100 was up 67.44 points, or 1 percent, at 6,756.20 points, setting it on course for its biggest daily gain since April 29. The index dropped 2.6 percent last week to post its biggest weekly drop since March as sentiment was hit by the threat of a banking crisis in Portugal.
The index extended gains in the afternoon, tracking gains in U.S. futures after a stronger-than-expected adjusted quarterly profit at U.S. bank Citigroup Inc.
Investors had put aside concern 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 by sports retailer Sports Direct , up 3.8 percent, after it announced plans to open in Australia and New Zealand by forming a partnership with MySale Group. MySale rose 4.8 percent.
Rolls-Royce also rose, tacking on 1.7 percent as European planemaker Airbus kicked off the Farnborough Airshow by confirming it would sell revamped versions of its A330 wide-body jet powered by Rolls-Royce Trent 7000 engines. ($1 = 0.5877 British pounds) (Additional reporting by Tricia Wright; Editing by Sonya Hepinstall)