MARKET REPORT: Evotec deal just the tonic for GlaxoSmithKline

GLAXOSMITHKLINE was in focus yesterday amid suggestions it is looking to boost its medicine cabinet with a takeover of German drug research group Evotec.

MARKET REPORT: Evotec deal just the tonic for GlaxoSmithKlineGossips reckon Glaxo has its own acquisition target in Evotec [GETTY]

The UK’s pharma majors have been seen as prey rather than predators after Shire agreed to a £32billion takeover by America’s Abbvie and Astra- Zeneca rejected the advances of US giant Pfizer.

But gossips reckon Glaxo, 15½p healthier at 1463p, has its own acquisition target in Evotec, although it could face competition from another US healthcare heavyweight, Johnson & Johnson. 

Investors checked in at easy- Hotel, up ½p to 97p, as Investec began coverage of the discount hotel chain founded by Sir Stelios Haji-Ioannou with a buy rating and 140p target. 

Analyst Andrew Fitchie said: “We believe the business is well placed to benefit from its strong brand, growing levels of international travel and a highly efficient operating model.” 

He highlighted the “significant” value the business derives from its association with the “easy” brand following the success of budget airline easyJet, 16p higher at 1370p. 

Support for water company United Utilities dried up as RBC Capital Markets cut its rating from outperform to neutral. 

Its shares reversed 11½p to 896½p. Outsourcing firm Capita, down 13p to 1214p, insurer Friends Life, 5p easier at 304½p, building materials group CRH, 22p weaker at 1398p, and wealth manager St James’s Place, 10p poorer at 730p, were among the top flight’s biggest casualties as their shares traded without the right to the latest dividend. 

We believe the business is well placed to benefit from its strong brand, growing levels of international travel and a highly efficient operating model

Andrew Fitchie, analyst

Tullow Oil bucked the trend as it rebounded 8½p to 721p after recent weakness.

The FTSE 100 Index traded in a narrow 17-point range between positive and negative territory before closing 7.90 points ahead at 6830.66. 

Online fashion retailer Asos was marked up 456p to 2804p amid speculation it could be a target for overseas predators including US giants Amazon and eBay. 

If construction group Balfour Beatty had hoped to win favour with investors after snubbing a potential merger with Carillion, it was left disappointed as shares fell 4¼p to 242¾p despite a 46 per cent rise in the value of its public-private partnership portfolio to £1.05billion. 

Energy consultancy RPS Group gained 9¾p to 290p as dealers noted comments from Australian peer Worley Parsons including a positive outlook in North America for water and environment services to unconventional oil and gas customers. 

• On Wall Street, the Dow Jones industrial average was up 8.4 points at 17,115.1 by mid-session.

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