By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Shares of Vodafone Group PLC drove U.K.
stocks higher on Tuesday, boosted by a report that Verizon
Communications Inc. and AT&T Inc. are working on a breakup bid
for the U.K. telecom firm.
The FTSE 100 index gained 1.% to 6,478.98, adding to a 0.4% gain
from Thursday. The benchmark was closed for trading Friday and
Monday due to the Easter break.
Vodafone (VOD) gained 4.6%, as the Financial Times' Alphaville
blog cited "usually reliable people" as saying that Verizon (VZ)
and AT&T (T) were putting together an offer to break up the
U.K. firm. A potential offer would price the firm at about 260
pence ($3.96) a share, a 40% premium to Vodafone's current share
price, valuing the group at around $245 billion.
The breakup would likely see Verizon buy Vodafone's 45% stake in
the Verizon Wireless joint venture, while AT&T would take over
the non-U.S. assets, according to the report. Representatives from
all three companies declined to comment.
Also of notice in the U.K., the Markit/CIPS manufacturing
purchasing managers' index, or PMI, showed the sector contracted
for the second straight month in March, reflecting lower production
in response to lackluster demand both in the U.K. and overseas. The
reading came in at 48.3 in March, up from 47.9 in February.
"Manufacturers are still feeling the impact of subdued demand in
domestic and export markets, as consumers and businesses rein in
spending and the euro zone remains in what seems to be a perpetual
cycle of crisis," said Rob Dobson, senior economist at Markit in
the release.
"Cost-caution is also leading to manufacturing job losses,
destocking of inventories and a reluctance to invest, all of which
will exert a drag on the broader economy in coming months," he
said.
Among other notable movers in the U.K., shares of Xstrata PLC
rose 1.5% and Glencore International PLC (GLCNF) picked up 1.1% as
the two mining firms said they have agreed to push back the
deadline for completing a merger until May 2.
Outside the main index in London, shares of FirstGroup PLC
jumped 6.9%, after Bank of America Merrill Lynch lifted the
transport firm to buy from underperform.
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