FTSE 100 inched higher, as ARM rallies 43% on takeover deal

U.K. stocks surged on Monday, led by a nearly 50% spike in ARM Holdings PLC shares after the chip designer agreed to be purchased for more than $30 billion.

The FTSE 100 rose 0.7% to 6,712.54, but mining and some property shares lost ground.

The index on Friday finished 0.2% higher, although travel shares fell in the wake of a deadly terrorist attack in Nice, France.

Monday’s session got underway with a 45% surge in shares of ARM to £17.08 ($22.65) . The stock recently traded at £17, up 43%.

The Cambridge, U.K.-based chip designer, whose clients include Apple Inc., agreed to an all-cash acquisition deal valued at more than $32 billion. The purchaser is Tokyo-based telecommunications and internet company SoftBank Group Corp.

S&P Global on Monday said it has raised its rating on ARM to hold from sell, and it lifted its price target on the shares to £17 each.

“We deem the offer price to be attractive and hence believe that the threshold for 75% of shareholder acceptance will be reached without difficulty,” said S&P Global analyst Jia Man Neoh in a note.

“Moreover, the acquisition is not subjected to any antitrust clearance given that SoftBank is not involved in any other similar business,” Neoh wrote.

The pound was buying $1.3227, up from $1.3214 late Friday.

Source: MarketWatch