January 12, 2018 / 9:39 AM / 5 days ago

Britain's FTSE edges higher as Melrose bid rejection lifts GKN

* FTSE up 0.1 pct

* GKN jumps 25 pct, Melrose up 10 pct

* Carillon in talks with creditor

By Julien Ponthus

LONDON, Jan 12 (Reuters) - Britain’s top share index held onto record high levels on Friday, supported by a sharp rise in British engineering group GKN which said it had rejected an unsolicited offer from rival Melrose.

The FTSE 100 benchmark was up 0.1 percent at 7,767 points by 0907 GMT, with GKN up by 24 percent to 416 pence as it said no to Melrose’s 405 pence per share offer and set out plans to split its business in half.

Shares in Melrose were up by about 10 percent on the news.

Among other shares to rise on Friday, packaging and paper company Mondi was up 1.6 percent rise after a rating upgrade from Investec.

Meanwhile shares in housebuilder Bovis, which is undergoing a turnaround after seeing off two failed takeover bids last year, rose by 3.9 percent after saying it was on track to deliver a significant increase in profit in 2018.

“The company points to solid industry fundamentals with strong demand for new homes supported by accommodative financing, government initiatives as well as the well documented shortage of national supply. Long may this continue”, said Accendo Markets analyst Mike van Dulken.

Troubled building and services group Carillion lost about 1 percent after asking creditors to consider a debt extension or roll-over in financing talks.

“We suspect that given its mounting liabilities, recent press comment, growing customer worries and supply chain hesitancy that Carillion will be forced (by the banks) to accelerate its financial restructuring”, Peel Hunt analyst Andrew Nussey said.

While Christmas updates weighed on Tesco and Marks and Spencer during the previous session, the latter recovered slightly, up 1.5 percent.

Oil prices, which slipped from 2014 highs, weighed on BP and Royal Dutch Shell which retreated 0.5 percent and 0.6 percent. (Reporting by Julien Ponthus; editing by Alexander Smith)

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