Shell lights up cautious FTSE with £1bn bid for Cove

The UK index of blue-chip shares edged up 0.05%, or two points, to 5,930 and the All Share index improved 0.05%, or two points, to 3,068 amid persisting caution over Europe’s debt woes. See the FTSE’s performance and the index’s top winners and losers.

Cove jumps

Cove Energy jumped 25.5% as Shell said it would pay 195p per share in cash for the company whose main asset is an 8.5% stake in the Rovuma offshore gas field. This is a 70 per cent premium to Cove's share price on 4 January when the company announced plans to sell.

Analysts said Shell was paying a full price to open up a new frontier in east Africa.

The deal is good news for investors in Giles Hargreaves' Marlborough UK Micro Cap Growth fund. The fund, a recommendation of Citywire Selection, holds Cove as a top 10 position.

Rexam rides high

Elsewhere Rexam rose 10p to 394p, topping the FTSE 100 leader board, after the maker of Red Bull and Pepsi cans said full-year pre-tax profit climbed to £450 million, meeting market expectations.

Earnings were boosted by the strength of its core beverage cans business, the group said, while its plastics packaging unit disappointed.

‘The underlying improvements are impressive, and the group is now in a position of having options for use of capital,’ said analysts at Oriel Securities, retaining their ‘add’ recommendation for the stock.

Financial stocks also fared well, reversing the previous session’s losses: Royal Bank of Scotland (RBS.L) added 0.4p to 28.66p and Lloyds (LLOY.L) gained 0.3p to 36p.

Elsewhere, Galliford Try (GFRD.L) , also in Citywire Top Stocks®, jumped 34p to 535p after the homebuilder doubled its interim dividend as its first-half profit before tax surged.

Hays (HAYS.L) advanced 7p or 8.8p to 88.3p after the recruitment firm posted a 24% rise in half-year profits. However, it halved its interim dividend in response to slowing market conditions.

Logica (LOG.L), the Anglo-Dutch software firm, rose 6p or 7.5% to 87.5p as a drop in half-year profits met expectations and chief executive Andy Green said he would cut 1,300 jobs to speed up cost savings.