Meggitt takes UK midcaps to record high, FTSE 100 at 18-mth peak

(Reuters) – Britain’s domestically focused mid-cap index closed at a record high on Wednesday after aerospace supplier Meggitt sky-rocketed on a new $9.7 billion takeover offer, while the FTSE 100 ended at an 18-month peak on gains in major financial stocks.

The mid-cap index surged 0.8% to a record high of 23,756.83 points, with Meggitt serving as the biggest boost after it said it received a preliminary proposal from U.S. rival TransDigm Group.

Meggitt’s shares climbed 16.1% to a record high after the offer, days after it agreed on a bid from Parker-Hannifin.

The blue-chip FTSE 100 rose 0.8% to finish at 7,220.14 points, its highest level since Feb 2020. Financial stocks and export-oriented sectors such as mining and consumer staples were the biggest boosts.

Avast was among the top gainers on the FTSE 100, up 3.1%, after U.S. based NortonLifeLock Inc agreed to buy the company for $8.6 billion in cash and shares to create a leader in consumer security software.

Positive earnings, cheap interest rates and re-opening optimism have pushed the FTSE 100 up 11% this year. But it has lagged its peers in the developed world, due to its lower exposure to technology firms, which had thrived during the COVID-19 pandemic.

Food delivery company Deliveroo dropped 6.1% after it said there was no material impact from the wider reopening of restaurants in its biggest market, Britain, in the second quarter.

“The pandemic has clearly offered a structural growth opportunity for Deliveroo, but the longer-term outlook depends on how demand holds up in a post-pandemic world,” said Susannah Streeter, senior analyst at Hargreaves Lansdown, in a note.

Among the gainers, British motor insurer Admiral rose 3.9% after it reported a 76% surge in first-half earnings and announced a 27.1 pence special dividend.

Provident Financial jumped 10.2% to a seven-month high after its half-yearly adjusted profit surged.

(Graphic: UK midcaps at par with European aggregate, )

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