London shares higher midmorning, M&A news lifts BT Group, property issues gain

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LONDON (AFX) - Leading shares remained higher midmorning with BT Group up on fresh consolidation news across the telecom sector while property stocks got a lift from favourable broker comment, dealers said.

At 10.15 am, the FTSE 100 was 15.80 points firmer at 6,323.8, having reversed initial losses, but off an earlier high with the broader indices mixed.

Early volume was moderate with 517 mln shares trading in 99,336 deals.

M&A hopes helped BT Group ring up early gains on news Pirelli is in talks to sell two thirds of its controlling shareholding in Telecom Italia to AT&T from the US and Mexican mobile phone operator America Movil.

The Pirelli stake is held via its Olimpia unit, which controls Telecom Italia SpA via an 18 pct holding.

The negotiations are based on a price per Telecom Italia share of 2.82 eur minus the net debt of Olimpia, it said.

BT Group took on 3-1/2 at 307-1/4, Cable & Wireless rose 1.8 at 168.4 and sector peer Vodafone also gained, 1.5 higher at 137, clawing back some of Friday's investor day losses.

M&A news also provided a lift to Experian, up 15 at 599, amid talk US credit checking peer First Data Corp is in discussions with private equity group KKR about a possible 25 bln usd bid.

Reports suggest a deal could be announced as early as today.

As it was, Compass Group rose to the top of the FTSE 100, up 9 at 349, as buyers emerged following last week's 5-month trading update which beat expectations prompting several broker upgrades.

The stock was also benefiting from Friday's announcement of its share buyback programme which will run until May 15.

Elsewhere, Daily Mail took on 21 to 833 as consolidation hopes were stirred after German peer Axel Springer said it could invest more than 2 bln eur on expanding internationally should a 'unique opportunity' come along, according to the firm's CEO Mathias Doepfner.

Europes largest publisher of newspapers and magazines could spend something close to the value of the aborted bid it made in 2005 for ProSiebenSat.1, Doepfner told the Financial Times.

Last weeks news that advertising revenues at its Associated Newspapers division increased by 10 pct in the five months to the end of February was also continuing to help the share price.

ITV was also courted, 1 stronger at 110 as the commercial broadcaster was reiterated a 'buy' at Goldman Sachs following last week's FA Cup rights news, which it says makes the group a more attractive takeover target.

In a note to clients, the broker said the rights win potentially makes ITV more attractive to Virgin Media, which is reported to be working on a second takeover bid should BSkyB be forced to divest its 17.8 pct stake.