Markets toasted Peroni and Grolsch maker SAB Miller yesterday as shares surged by a fifth after it disclosed a takeover approach by rival Anheuser-Busch InBev.
UK-listed SAB led the FTSE 100 Index higher after it confirmed that the Budweiser owner was preparing to table an offer, after months of speculation.
Shares in the group surged as the wider top-flight added 91.6 points to 6229.2, with investors weighing the likelihood of a forthcoming US rates hike as well as eurozone inflation numbers, and inflation in China.
In the UK, official figures from the labour market showing a surge in wage growth helped the pound rise sharply.
The 2.9% year-on-year increase in regular pay for the three months to July was the strongest rate for more than six years and in real terms - with inflation hovering around zero - it was the best since August 2002.
Sterling was further bolstered by remarks from Bank of England governor Mark Carney reiterating his view that a decision on when to raise interest rates should crystallise "around the turn of the year" despite increased global risks.
The pound rose two cents against the US dollar to 1.55 while it was a cent up against the euro at 1.37.
Global economic developments were mixed, with a downward revision to eurozone inflation to 0.1% for August prompting fears that it could turn negative again and speculation of more stimulus for the 19-nation single currency bloc.
World equity markets took a positive turn ahead of the decision this week by the US Federal Reserve on whether to raise interest rates for the first time in nearly a decade.
In Europe, Germany's Dax and France's Cac 40 both rose, while New York's Dow Jones Industrial Average was also ahead.
Latest figures showed US inflation lingering close to zero, which some think will encourage the Fed to hold off from a hike. Others think that markets are now preparing to welcome a rates increase as a sign of economic recovery.
In London stocks, SAB Miller was up 20%, or 599.5p, to 3614p.
It said it would "review and respond as appropriate" to any proposal which might be made by AB InBev. A tie-up could create a combined business worth around 280 billion US dollars (£182 billion). US-trade shares in AB InBev were up 7%.
Meanwhile, high-end fashion firm Burberry was boosted by strong results from Swiss-based luxury group Richemont, owner of the Cartier jewellery brand, as it grew sales by 26% in Europe and 48% in Japan in the five months to August 31.
Burberry shares rose 10p to 1415p. Luxury shoe maker Jimmy Choo rose 4p to 147.3p in the FTSE 250 Index.
Elsewhere, sports and outdoor retailer JD Sports rose 3%, or 29.5p, to 923p after it posted an 83% rise in underlying pre-tax profits to £46.6 million in the 26 weeks to August 1. Rival Sports Direct added 13.5p to 765p.
The biggest risers in the FTSE 100 Index were SABMiller up 599.5p at 3614p, Glencore up 6.6p at 134.7p, Aberdeen Asset Management up 14.2p at 334.5p and Randgold Resources up 144p at 3770p.
The biggest fallers in the FTSE 100 Index were Mondi down 69p at 1409p, Inmarsat down 20p at 1001p, London Stock Exchange Group down 46p at 2425p and Aviva down 5.2p at 469.1p.
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