FTSE 100 opens higher as Shire agrees to Takeda deal

The FTSE started the day up 0.2% at 7,580.65 after a long weekend as two takeover bids boosted the London index.

The Asian markets were also higher across the board with the Hang Seng up 1.4% at 30,408.79 and the Nikkei 225 up 0.2% at 22,508.69.  On Monday the Dow Jones Industrial Index closed up 0.4% at 24,357.32.

After several improved bids the board of Irish biopharmaceutical firm Shire agreed to a £46 takeover bid by Japanese drug maker Takeda which will propel it into the position of the world’s largest drug maker in the rare diseases business. It will also expand Takeda’s foothold in the US because two-thirds of Shire’s income comes from that market. Takeda, which unusually for a Japanese company is headed by a foreign chief executive, Christophe Weber, was under pressure from U.K. regulators to make a firm offer for Shire by Tuesday, to extend the deadline or abandon the deal.  Shire shares traded up 3.7%.

CYBG Plc, the parent company of Clydesdale Bank and Yorkshire Bank, has made a preliminary approach for Virgin Money Holdings which values the lender supported by Richard Branson at £1.6 billion. CYBG proposed to buy all Virgin Money's share at a ratio of 1.1297 new CYBG shares per Virgin Money share. The news boosted Virgin Money’s shares 8.6% but had initially a negative effect on CYBG.

UK house prices showed an unexpected drop in April in a sign of a broader weakening in consumer economy. The Halifax index fell 3.1% on the month against expectations of 0.2% but was up 2.2% on the same month last year. This is a slowdown from March when prices rose 2.7% on the year.   

The pound was a touch stronger at $1.3577 while the euro traded nearly flat at $1.1929.