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Miners lead FTSE higher as Dairy Crest leaps on takeover

Miners drive FTSE 100 higher on optimism over trade talks between US and China, while Dairy Crest jumps on takeover bid.

Miners lead FTSE higher as Dairy Crest leaps on takeover

Miners have driven the FTSE 100 higher amid mounting optimism over the outcome of trade talks between the US and China.

The UK blue-chip index climbed 36 points, or 0.5%, to 7,203, as mining companies tracked metal prices higher. Risers included:

  • Evraz (EVRE) +3.8% at 551.6p;
  • Anglo American (AAL) +3.3% at £20.56;
  • Glencore (GLEN) +2.7% at 308.6p;
  • BHP Group (BHPB) +2.3% at £18.29;
  • Rio Tinto (RIO) +1.6% at £44.61;
  • Antofagasta (ANTO) +1.5% at 943.4p.

Pearson (PSON) dipped a penny to 882p as full-year results showed it had some way to go to return to growth, which the educational publisher has pledged to achieve in 2020.

Despite generating profits in line with expectations in 2018, this was only done by significant cost cutting. Around two-fifths of its business also remains non-digital.

On the FTSE 250, cheese maker Dairy Crest (DCG) was on track for its best day on the market in four years after Canadian dairy product business Saputo (SAP.TO) agreed to buy the business for around £975 million.

Shares in business behind British food brands including Cathedral City, Clover, Country Life and Frylight surged 12.9% to 626.5p. Saputo’s cash offer of 620p per ordinary share represents a premium of 11.7% to yesterday's closing 555p price.

AJ Bell investment director Russ Mould said: ‘Cathedral City-owner Dairy Crest sold its milk business in 2015 to focus on cheese and spreads. Unfortunately shareholders haven’t been richly rewarded over the past few years with the share price drifting sideways and then downwards.

‘The bid from Canada’s Saputo will be a pleasant surprise to investors who may be smiling like the cat who got the cream at the news. The cash offer gives them a chance to get out of a fairly pedestrian business and at a price that hasn’t been seen since September 2017.’

Provident Financial (PFG) was another mid-cap stock benefiting from takeover activity, as the troubled doorstep lender received a bid from its much smaller competitor Non-Standard Finance (NSF).

Shares in the subprime lender were up 4.2% to 533p on the news, despite the offer not being at a premium to its last closing share price.

Metro Bank (MTRO) shares were up 4.5% to £13.63, after receiving £120 million as part of the Banking Competition Remedies scheme, aimed at helping increase competition among banks.

Though fellow CYBG (CYBG) was not as lucky and was declined for scheme funding, pushing its shares down 5.2% to 187p.

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