Can maker Rexam hit by rising aluminium prices

The blue chip company, which produces 61 billion cans a year and counts Red Bull, Coca-Cola and PepsiCo among its customers, fell 16p to 520½p as Deutsche Bank cut its buy rating to hold.

The broker believes Rexam’s earnings will have been given a boost from a strong performance in Latin America catering for thirsty fans during the recent World Cup.

But it warned: “We have concerns about the rising aluminium premium in Europe, which Rexam, currently, is unable to pass through to customers.”

Rexam had signalled a potential £20-25million hit this year from higher prices but Deutsche said the impact could be over £30million.

Unilever gave investors food for thought as talk resurfaced about spinning-off its food products business.

According to UBS, rising interest rates and slowing sales growth across the industry could heighten speculation. UBS does not see Unilever, also makers of Persil and Dove soap, as a possible bid target but investors could be increasingly looking for corporate activity.

A demerger of its edible products, which include Marmite, Flora, Magnum and Hellmann’s, has long been mooted.

Unilever shares rose to 2665p before closing flat at 2641p.

Grolsch and Peroni group SABMiller frothed up 34p to 3340p as talk persisted of potential bid interest from Stella Artois giant AB Inbev.

Guinness brewer Diageo, which has been touted as an alternative merger partner for SAB, suffered a 15p hangover to 1824p after cautious comments from JPMorgan Cazenove.

Speculation that a US predator such as United Technologies could launch a takeover helped aircraft parts supplier Meggitt take off 9½p to 546½p.

The FTSE 100 Index closed 46.35 points lower at 6738.32.

Recently floated OneSavings Bank fell 1¼p into the red at 162¾p despite Barclays starting coverage with an overweight rating and 220p target.

Vodafone Group reversed ¾p to 195¼p as it closed in with business partner Wind on a joint takeover of the biggest subscription television provider in Greece, Forthnet.

Carphone Warehouse rang up a ½p rise to 303p as shareholders gave their backing to its merger with Dixons Retail, unchanged at 47¼p.

Hikma Pharmaceuticals received an 18p shot in the arm to 1709p as UBS turned buyer from neutral with a 2000p target while talking up prospects of an acquisition.

On Wall Street, the Dow Jones was down 161.39 points to 16,976.81 by close.

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