Shares in brewer SABMiller (LON:SAB) frothed up on takeover speculation in the drinks industry, boosting the London market on Wednesday.
The shares fizzed 85p to 3099.5p on talk that Budweiser, Stella Artois and Beck's brewer Anheuser-Busch InBev was taking a fresh look at the South African maker of Peroni.
Inbev has been rumoured to be interested in SABMiller for more than 10 years, although there has been speculation that SABMiller could also buy a rival.
In September, Dutch brewer Heineken rejected a takeover offer from SABMiller.
There has also been chatter that SABMiller could have its eye on Johnnie Walker whisky and Guinness group Diageo (LON:DGE).
Another intriguing market theory is that cash-rich Diageo could become a target for US activist investors who would buy the group and break it up.
Shares in AB Inbev (EBR:ABI) rose €3.07 to €97.52 in Brussels. Diageo's stock gained 12.5p to 1757.5p and Heineken (AMS:HEIO) lifted €1.47 to €62.51.
The speculation helped to fuel a 45.72 point rise to 6183 in the FTSE 100 Index, which also benefited from a positive session in Asia overnight.
Accendo Markets head of research Mike van Dulken said jitters about a potential US Federal Reserve rate hike on Thursday appeared to have receded somewhat.
He added: "Another sharp rise by Chinese equities towards the session-end - thanks to intervention? - has also boosted risk appetite despite global growth concerns remaining very much to the fore."
Back on the corporate front, upmarket fashion group Burberry (LON:BRBY) got a boost from the Chinese market bounce, advancing 43p to 1448p.
Mining and commodity group Glencore (LON:GLEN) headed 0.6p lower to 127.45p after successfully placing £1.6bn of shares to shore up its balance sheet.
Pan African Resources (LON:PAF) rose 0.2p to 7.26p as it forecasted an improvement after a tough year. Broker WH Ireland agreed, raising its recommendation on the gold miner from 'underperform' to 'speculative buy'.
MARKET PREVIEW
London’s blue chips are set for early gains after almost all major markets registered rises overnight.
Financial spread bet firms sees the Footsie adding more than 20 points when trading gets underway, after gains of 53 points yesterday to 6,138.
US and Asian markets were also higher ahead of the Federal Reserve’s key meeting today’
A decision on whether US interest rates will rise will not be known until tomorrow evening, but the debate recently has been swinging towards no change given the turbulence in China.
Dow Jones rose 229 points to 16,600, with Nasdaq and the S&P 500 both up by more than 1%.
Company news saw Microsoft raise its dividend by 16%, while Hewlett-Packard announced plans to cut 30,000 jobs. The axe is falling mainly on its enterprise side. The cost will be US$2.7bn.
Asian markets followed the US higher with big gains in Hong Kong and Tokyo, though Shanghai was coming back towards the end of the day.
UK company news will be dominated by the launch of mining titan Glencore’s well-flagged US$2.5bn fund raising.
Investors will also be keen to see what graphics game chips designer Imagination Technologies has to say about the new range of Apple products.
IN THE PAPERS
Glencore has pushed the button on its US$2.5bn capital-raising after another rollercoaster day for its shares.
The heavily indebted miner and commodities trader said last night that it would place up to 1.3bn new shares, or almost 10% of its share capital, the Times reports.
The Independent reports that Swiss commodities companies have been accused of depriving the people of Burkina Faso of millions of pounds a year in tax for the gold being dug out of the impoverished country’s mines.
The Berne Declaration NGO claims to have traced the true origins of gold being processed in Switzerland.
The Times continues to report on the row over whether the Treasury interfered in sensitive forecasts by the government’s top economic watchdog.
Senior MPs demanded that private emails be made public, says the paper, after it revealed officials sought to meddle with the independence of the Office for Budget Responsibility.
Ocado has warned that supermarket chain Morrisons would be unable to start its own internet operation because it was tied to a 25-year deal to sell food online through Ocado’s online service.
Duncan Tatton-Brown, Ocado’s finance director, said: “Ocado is the exclusive provider of online grocery services for Morrisons. Those are the terms of the deal for the remaining 23 years," writes the Guardian.
UK motor insurer Hastings Direct has unveiled plans to list on the London Stock Exchange and raise £180mln in the process.
The company is majority owned by US investment bank Goldman Sachs and the listing value could top as much as £1.5bn.
Hewlett-Packard disclosed it plans to slash another 25,000 to 30,000 jobs to put its new enterprise business on a stronger footing as a standalone company, the FT and other papers report.
The swingeing cuts come on top of 54,000 jobs that have already gone over the past three years as part of chief executive Meg Whitman’s turnaround strategy.
The Times adds the move comes as it prepares to split into two separate companies and will cost US$2.7 bn.