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AstraZeneca shares soar

Shares in AstraZeneca rocketed 16% today after US drugs giant Pfizer confirmed its interest in a takeover of the UK company.

Pfizer revealed for the first time that it had been rebuffed by Astra after initial talks in January valuing the company at £58.7 billion, and that further overtures this weekend were also rejected.

The latest developments in the pharmaceuticals sector helped the FTSE 100 Index climb 19 points to 6704.7, despite further investor worries over Ukraine as the United States prepares to levy fresh sanctions against Russia.

Astra shares soared by 675.5p to a new record high of 4756p and have now increased in value by around a quarter or £11 billion since before takeover speculation began last week.

The City is currently betting that Pfizer will succeed with a better offer as Astra's price is higher than the 4611p proposed in January.

A deal to buy Astra would be the biggest foreign takeover of a UK firm, dwarfing the £17.7 billion paid by Telefonica for O2 in 2005.

The activity fuelled gains elsewhere in the pharmaceuticals sector as Shire rose 54p to 3264p and GlaxoSmithKline lifted 11.5p to 1666.5p.

On the fallers board, BG Group dropped 2% or 20p to 1125p after it announced that Chris Finlayson has resigned as chief executive.

His departure fuelled uncertainty for investors ahead of the company's first quarter update later this week

BG's shares have fallen in recent weeks after it slashed production targets due to continued problems in Egypt, where too much of its gas has been diverted into the domestic market instead of being exported.

It warned today that production this year will be towards the lower end of expectations due to the ongoing issues in Egpyt.

Mining stocks were also under pressure as Rio Tinto fell 72.5p to 3206p, BHP Billiton dropped 20.5p to 1903.5p and Anglo American eased 12p to 1521p.

Other high-profile fallers in the top flight included Royal Bank of Scotland, which fell 5.3p to 297.9p, and Royal Mail after a drop of 10p to 509.5p.

William Hill continued to rally after its trading update on Friday, when it announced solid trading but said that an increase in gaming machine duty will force it to close as many as 109 shops. Shares were 10.45p higher at 350.45p, while rival Ladbrokes was up 5.4p at 144.1p.

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