By Carla Mozee, MarketWatch

Morrisons pretax profit halved; TSB soars on takeover talks

LONDON (MarketWatch)--Strength in pharma stocks and brewer SABMiller PLC helped push the U.K.'s benchmark FTSE 100 higher Thursday.

Making a splash among FTSE 250 midcap stocks , shares of TSB Banking Group PLC rallied by 23.5% after the lender confirmed it is in talks to be purchased (http://www.marketwatch.com/story/tsb-shares-surges-26-after-banco-sabadell-offer-2015-03-12) by Spain's Banco de Sabadell PLC .

The FTSE 100 closed 0.6% higher at 6,761.07, adding to a 0.3% gain from Wednesday.

(http://www.marketwatch.com/story/ftse-100-higher-after-string-of-losses-2015-03-11)Among gainers, SABMiller shares rose 1.7%. Morgan Stanley resumed coverage of the brewer with an overweight rating. Exane BNP Paribas said now is "arguably the best time" for Anheuser-Busch InBev SA (AHBIY) to finance a bid on SABMiller, given current conditions in the bond and foreign-exchange markets.

Although there are "limited synergies and execution risk, a deal would boost [per-share earnings] and more important, help solve ABI's volume issue. Tempting. If a deal doesn't happen soon, it may never happen," wrote Exane BNP analyst François Mosnier, in a note.

GlaxoSmithKline PLC (GSK) gained 1.9% after the drug maker said it plans to sell about half of its 12.4% stake in South Africa's Aspen Pharmacare Holdings Ltd. . Peer pharma company AstraZeneca PLC (AZN) climbed 4.1%.

Wm Morrison Supermarkets PLC shares turned higher by 0.5%. They had sunk to the bottom of the FTSE 100 earlier after the supermarket chain's fiscal 2015 underlying pretax profit dropped by more than half, to GBP345 million from GBP719 million (http://www.marketwatch.com/story/morrisons-yearly-net-loss-widens-2015-03-12). It also indicated a dividend cut. In fiscal 2016 it expects to pay a dividend of 5 pence per share or less.

Morrison's results "are a miserable welcome for incoming CEO David Potts who will have his work cut out to deliver a quick turnaround for the retailer," as it is "bearing the brunt of its GBP1bn investment in price reductions, which are spread across three years," Himanshu Pal, director of retail insights at Kantar Retail, wrotec in a note. But positive developments come from a stronger supply chain and improved logistics that will help Morrisons compete against discounters and larger rivals, said Pal.

ITV PLC climbed 0.7% as it said it has agreed to purchase Talpa Media BV for up to 781 million pounds ($1.17 billion). The entertainment show producer is behind programs including "The Voice", and company founder John De Mol established "Big Brother." ITV will make an initial cash payment of GBP355 million for Talpa.

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