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Miners and banks boost FTSE as Footasylum surges on JD Sports bid

Miners and banks drive up FTSE 100, while Footasylum shares surge on JD Sports takeover.

Miners and banks boost FTSE as Footasylum surges on JD Sports bid

Miners and banks have led the FTSE 100 higher, while shares in sports footwear retailer Footasylum (FOOT) soared on a bid from larger rival JD Sports (JD).

The UK blue-chip index climbed 45 points, or 0.6%, to 7,274 as copper prices rose over concerns of supply tightness. Rio Tinto (RIO) was up 2.4% to £42.52 and BHP (BHP) rose 2.3% to £17.59.

German banks Deutsche Bank (DBKG.DE) and Commerzbank (CBKG.DE) confirmed they were in talks about a merger, boosting financial stocks. HSBC (HSBA) was up 0.6% to 625.1p, Lloyds (LLOY) rose 0.9% to 65.4p and Royal Bank of Scotland (RBS) advanced 0.9% to 271.2p.

The FTSE 250 rose 16 points, or 0.1%, to 19,507 with sportswear retailer JD Sports up 0.5% to 488.6p as it announced its buyout of Alternative Investment Market-listed business Footasylum.

Footasylum shares leapt 74.6% to 81.2p on the deal valued at £90.1 million, a month after JD Sports raised its stake in the business to more than 18%.

The cash offer of 82.5p a share by JD Sports represents a premium of 77% to the closing price of 46.5p for Footasylum shares on Friday.

There was speculation that JD Sports upped its stake in Footasylum last month to block Mike Ashley’s Sports Direct from swooping in, but the takeover looks to give JD Sports access to an older demographic than the younger teenagers that shop in its stores, said AJ Bell investment director Russ Mould.

‘[Footasylum] has been vulnerable for some time and arguably this move could have happened earlier,’ he said. ‘After years of strong growth, JD shareholders will be hoping the company isn’t tripped up by its recent acquisition moves.’

‘Early signs from its 2018 purchase of Finish Line in the US have been positive but both it and Footaslyum were troubled businesses before being taken over. As such there has to be some risk they could dilute what has been a highly effective strategy of tapping into the “athleisure” trend.’

The pound weakened to $1.325 against the dollar, as prime minister Theresa May scrambled to get MPs behind the third draft of her Brexit deal on Sunday.

May has just a few days to get this deal through parliament before she meets EU officials on Thursday to request an extension to the UK’s departure from the EU. 

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