July 14, 2014 / 4:15 PM / 3 years ago

Shire, Sports Direct push UK FTSE up in thin trade

* FTSE 100 ends up 0.8 pct in volume 35 pct below average

* Shire up 0.7 pct on new AbbVie offer

* Sports Direct boosted by partnership with MySale

By Francesco Canepa

LONDON, July 14 (Reuters) - Britain’s top equity index rose for a second straight day in thin trade 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 - before paring back gains into the close - 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. Galvan’s head of trading, Ed Woolfitt, sold half of each of his clients’ exposure to Shire.

“So we’re banking something good on the bounce and leaving the other half on just in case (it climbs to 53),” Woolfitt said.

Shire’s shares closed up 0.7 percent at 4,903 pence on volume that was four times higher than its full-day average for the past three months. FTSE 100 volume was 35 percent lower than the index’s own average.

The FTSE 100 ended up 55.97 points, or 0.8 percent, at 6,746.14 points after trading as high as 6,760.73 points. 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 FTSE trimmed its gains into the close, a pattern already shown on Friday and which normally denotes faltering investor confidence in future gains.

Helping keeping the FTSE buoyant was sports retailer Sports Direct, up 3.6 percent after it announced plans to open in Australia and New Zealand by forming a partnership with MySale Group.

Rolls-Royce also rose, tacking on 1.3 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/Ruth Pitchford)

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