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Mon close: Diageo bid rumour lifts shares

Shares in Diageo soared on a report of takeover interest from 3G Capital, the Brazilian company which recently snapped up a part of the former Kraft Foods empire.

Traders piled into the Johnnie Waker to Guinness maker, driving the shares up 8% at one point. They closed up 6.79% at 1,880p.

This was offset by weakness in firms such as Shire which fell on new reports saying it was considering an $18 billion takeover of Actelion.

The FTSE100 was treading water for much of  the session, closing down 14.56 points at 6,790.04.

Morrisons, which last week escaped demotion from the leading index after a late rally ahead of the quarterly reshuffle, fell after announcing it was discounting a range of products. It prompted falls elsewhere in the sector as investors anticipate another round in the price war.following a 2.6% fall last week, its biggest weekly drop of the year.

Vodafone gained 1.95p to 244p on reports that Liberty Global is interested in a merger despite last week’s statement that talks were over a possible swap of assets. BT was also 3½p higher to 442¾p on suggestions of possible interest from Deutsche Telekom, but closed off 0.6p at 438,.8p.

In the mid-caps, Balfour Beatty, the construction company, rose 6.1p to 255.1p following weekend reports that China Civil Engineering Construction Corporation might make a bid.

Partners in Gateley Holdings shared a £25m windfall as it became the first UK law firm to list on the London Stock Exchange.

The company raised £30m when its shares were placed at 95p with investors on the junior Aim market, giving it a £100m valuation.

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