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LONDON (Thomson Financial) - Leading blue chips closed the week sharply higher, breaking back above 6,600 points for the first time since September 2000, after takeover offers for Reuters, Hanson and EMI sent the market into a frenzy, dealers said.
By the close, the FTSE 100 index was 65.9 points higher at 6,603.7, narrowly off its session high of 6,614.7. The FTSE 250 index ended up 164.7 points at 12,210.80.
Volume was solid with 3.68 bln shares changing hands in 625,233 deals, including 248 mln shares traded in Reuters.
On Wall Street, US stocks carved out gains for a fourth straight session today amid a fresh round of corporate takeover news and as employment figures largely met expectations.
The Dow Jones industrial average rose 33.37 points to 13,272.75 with the Nasdaq composite index up 9.43 to 2,574.89.
In London, news of a bid for Reuters sent further shock waves through the financial information sector which was still reeling following news of News Corp's 6 bln usd dollar bid for Dow Jones, which was announced on Tuesday.
Reuters shares ended 25 pct, or 123 pence, higher at 615.75 after the company issued a statement saying it had received a takeover approach.
Speculation focused on Canadian media group Thomson Corp as the most likely bidder for the global financial news.
Canadian newspaper Globe and Mail reported Thomson is in talks to buy Reuters, citing people close to the companies, adding Thomson hopes to strike a deal soon.
Elsewhere, Hanson rose 4 pct or 45-1/2 pence to 1,070-1/2 after analysts said a takeover approach from German cement company Heidelberg Cement could spark a bidding war.
In light of the bid interest from Heidelberg Cement, Goldman Sachs lifted its stance on Hanson to 'neutral' from 'sell'.
Late yesterday, Heidelberg Cement said in a statement it was 'reviewing its options with respect to its interest in Hanson, including the possibility of seeking to acquire the company.'
Icap got in on the M&A act, climbing 25 pence to 535 after rumours of a bid from Deutsche Boerse did the rounds although there appeared little substance to the talk.
Elsewhere, commodity stocks performed well after a mining note published by Merrill Lynch suggested BHP Billiton might be of interest to private equity because of the 'attractive returns it delivers.'
By the close, BHP Billiton was up 53 pence at 1,218, Rio Tinto firmed 147 pence to 3,310 and Lonmin took on 160 pence at 3,780.
In the retail sector, Tesco was firmer, up 10 pence at 473-3/4, after ABN Amro upgraded its recommendation on the stock to 'buy' and raised its price target to 602 pence.
Imperial Tobacco took on 10 pence to 2,190 after CVC and PAI Partners said they have made a 50 eur per share offer for Spanish tobacco group Altadis but fears of a bidding war did not affect the share price.
The Spanish group had previously rebuffed two proposals -- at 45 and 47 eur per share -- from Imperial, the world's fourth biggest cigarette maker.
Barclays closed 12 pence lower at 732 after a Dresdner Kleinwort upgrade and amid some profit taking following strong gains yesterday.
This followed the news a Dutch court has ruled that LaSalle, which was to be sold to Bank of America by ABN Amro in the event that Barclays won its takeover battle, could not be sold without the permission of ABN's shareholders.
Dresdner Kleinwort upgraded its stance on Barclays to 'add' from 'hold' today, with the broker saying it sees the bank moving from predator to prey in the light of the Dutch court's decision to freeze the sale of LaSalle.
Shares in both Barclays and ABN Amro have been reiterated as 'neutral' at JP Morgan.
Barclays rival, Royal Bank of Scotland slipped 16 pence to 1,947 after news its chief executive will meet with ABN Amro's chairman today in an attempt to thrash out an agreed bid.
Remaining on the fallers, natural gas producer BG Group was down 1-1/2 pence at 753-1/2 as Teather & Greenwood reiterated its 'reduce' stance and 755 pence target. The broker said it feels the stronger than expected results for the oil and gas group have already been priced into the shares.
Earlier, BG's net profit before disposals and other one-off items in the three months to March declined 20 pct to 448 mln stg, while operating profit dropped 14 pct to 823 mln stg.
The figures were above the consensus estimates of a net profit of 425 mln stg and an operating profit of 796 mln stg.
On the second line, EMI Group firmed 18-3/4 pence to 246-1/4 after saying it had received several offers, with the Financial Times reporting the group has been approached by One Equity, the US private equity group affiliated to JP Morgan.
Bridgewell, however, remained cautious on the stock, saying it believes One Equity is more interested in the music publisher's cash flows because it is a lower risk exercise and will attract no regulatory attention.
The broker reiterated its 'underweight' stance.
Micro Focus International rallied 21-3/4 pence to 281 after issuing a positive trading update and saying it has bought US peer Acucorp Inc for 40.7 mln usd.
Heading the 250 fallers, Soco International fell 61 pence to 1,525 after the group announced it had plugged and abandoned a well in Vietnam.
In reaction, Bridgewell said the move knocks 56 pence off its 1,551 pence per share NAV.
Bridgewell said the share price reaction may be more muted, however, because most shareholders are probably awaiting the result of the company's ongoing well on the giant Prospect 'E', which will be concluded in about a month's time. tf.TFN-Europe_newsdesk@thomson.com nma/wj COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.