By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks gained Friday as Royal Bank
of Scotland Group PLC shares put in their best performance in more
than two years after an upbeat profit report, while AstraZeneca PLC
shares slipped after the drug maker rejected a sweetened merger
offer from Pfizer Inc.
The U.K.'s FTSE 100 closed up 0.2% at 6,822.42, a move that
pushed the benchmark index to a 2.1% rise for the week, its third
consecutive weekly increase.
Stocks in London held a grip on gains as the broader European
market hit intraday lows, falling further as the United Nations
Security Council met at the request of Russia to discuss the
"serious escalation of violence in Ukraine," according to French
news agency AFP.
A Ukrainian military operation launched Friday left "many"
pro-Russian activists dead as Ukraine tried to regain control of
the pro-Russian separatist stronghold of Slovyansk, Britain's BBC
reported.
Tensions between Moscow and Kiev intensified ahead of three-day
weekend in the U.K. and Ireland, where trading won't take place on
Monday in observance of the Early May Bank holiday.
The FTSE 100's advance on Friday was aided by an 8.2% upswing in
RBS shares after the bank's first-quarter profit surged to 1.2
billion pounds ($2.02 billion) from GBP393 million a year ago. The
performance was the best for RBS's shares since January 2012,
according to FactSet data. The rise in quarterly profit for the 80%
U.K. government-owned bank came as bad debt in its loan books fell,
and as provisions for legal issues related to misconduct from the
financial crisis decreased.
Shares of InterContinental Hotels Group also rallied 8.2% after
the Holiday Inn and Crowne Plaza chains owner said it plans to
distribute $750 million to shareholders through a special dividend.
The move comes after the company reported a 6% rise in
first-quarter revenue for each available room.
Meanwhile, AstraZeneca PLC rebuffed Pfizer Inc.'s (PFE)
acquisition offer, which was raised to GBP50 a share ($84.87),
valuing AstraZeneca at GBP63 billion ($106.43 billion).
"Inadequate" is what AstraZeneca called financial and other
terms of the offer. AstraZeneca shares had turned up during the
session, but concluded the day with a 0.2% decline. The shares
still finished the week up by 17.8%, their strongest week on
record, according to FactSet.
"Pfizer's proposal would dramatically dilute AstraZeneca
shareholders' exposure to our unique pipeline and would create
risks around its delivery. As such, the board has no hesitation in
rejecting the proposal," said AstraZeneca Chariman Leif Johansson
in a statement.
In January, Pfizer had valued the company at GBP46.61 a share,
or about $100 billion.
Reckitt Benckiser Group PLC shares fell 0.9% following a
Bloomberg report that Bayer AG is close to reaching an agreement to
take over Merck & Co. Inc.'s (MRK) consumer-health care unit,
in a deal that values the unit at $14 billion.
Earlier this week, Reckitt Benckiser said it was in talks to buy
the unit from Merck, adding that it was "part of a competitive
process." A Bayer representative declined to comment on the
Bloomberg report, while a Merck spokesperson wasn't immediately
available.
In other developments Friday, Markit and the Chartered Institute
of Purchasing & Supply said U.K. house-building activity grew
in April.
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