Unilever fall leaves FTSE 100 struggling

Image copyright AFP

(Open) The FTSE 100 struggled on Monday after Unilever shares opened about 8% lower after Kraft Heinz abandoned its proposed merger.

The blue-chip index was flat at 7,299 points in morning trading.

Shares in the Anglo-Dutch food giant surged by 13% on Friday when the bid was announced.

Possible UK government opposition to the deal may have been one factor that dissuaded Kraft Heinz from increasing its offer.

"Kraft Heinz evidently didn't feel up to the mergers and acquisitions battle this rejection suggested," said Connor Campbell of SpreadEx.

House builder Bovis fell more than 7% after it said annual profits were hit by setting aside £7m to compensate customers who had complained about poor workmanship, and to improve customer service.

Royal Bank of Scotland rose more than 5% after saying on Friday that it may no longer seek to sell its Williams and Glyn subsidiary.

The European Commission had ordered the bank to sell the division to address competition concerns, but RBS has struggled to find a buyer.

Analysts at Morgan Stanley said the move could add 10% to profits by 2019.

RBS is expected to report a ninth consecutive annual loss on Friday, although Ross McEwan, chief executive, said the bank would return to the black next year.

Rolls Royce rose more than 4% after Goldman Sachs uprated the stock from neutral to buy.

Shopping centre owner Hammerson enjoyed a 2% rise in its shares despite reporting a 56% fall in annual profits.

It said the valuation of its shopping centres, including Birmingham's Bullring, had dropped by £6m, with the value of its retail parks down £39m.

On the currency markets, the pound rose 0.3% against the US dollar, and 0.2% against the euro.


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