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LONDON (Alliance News) - UK stocks ended mixed Monday, with the FTSE 100 dragged by commodity stocks, while the FTSE 250 was supported by a rally in William Hill shares after Rank Group and 888 Holdings confirmed they are evaluating a possible offer for the bookie.

The FTSE 100 ended down 0.3%, or 20.35 points, at 6,710.13. The FTSE 250 added 0.6%, or 107.52 points, to end at 17,090.98, and the AIM All-Share rose 0.6%, or 4.27 points, to 744.49.

The blue-chip index lost earlier gains as declines in the prices of gold and Brent oil hit its heavy-weight commodity-related stocks. Gold was quoted at USD1,318.62 an ounce at the London equities close, compared to USD1,323.19 at the same time Friday. Randgold Resources and Fresnillo fell 3.4% and 1.6%, respectively.

Shares in Randgold dropped despite saying the Tongon mine in the Ivory Coast is expected to deliver an "improved performance" in the second half of this year after the miner finished expanding and upgrading certain elements of the plant.

Brent oil stood at USD44.81 a barrel at the equities close, compared to USD45.48 on Friday. The North Sea benchmark touched a low of USD44.73, a level it hasn't seen since early May. It was its third consecutive day of losses, having stood at USD46.68 at the close on Thursday last week.

Royal Dutch Shell 'A' shares fell 2.7%, while BP dropped 2.6%. BP will release its second-quarter results on Tuesday, while Shell will do the same on Thursday.

However, the highlight of the day was the news that bookmakers Rank Group and 888 Holdings are assessing a potential joint bid for their peer William Hill.

Rank and 888 said they see "significant industrial logic" in a combination with William Hill, "through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale which will accrue to all shareholders."

Shares in William Hill ended up 4.9%, Rank Group fell 0.5%, while 888 shares rose 3.4%.

Rank Group and 888 have not made a formal approach yet and said there can be no certainty that any such approach will be made. Nevertheless, if a deal goes through, William Hill would join the wave of merger and acquisition activity which has swept through the UK gambling industry over the past year.

William Hill confirmed that it received "a highly preliminary approach" from 888 and Rank Group regarding the potential combination, but that the consortium did not put forward a proposal or set out a position on price, timing, terms, form of consideration, or transaction structure. It said, however, its board "would listen to and consider any proposal".

In a thin economic calendar Monday there was the Industrial Trends Survey from the Confederation of British Industry, which showed the total order books balance dropped to -4% in July from -2% in June. The export order books declined notably to -22% from -14% in the prior month.

"Overall, taken together with last week's flash manufacturing Purchasing Manager's Indices, the evidence is mounting that the economy has taken a hit from Brexit. But it is still early days and the survey evidence so far could reflect an initial shock factor," said Capital Economics UK economist Paul Hollingsworth.

"We will have to wait a while longer before we get a clearer picture of just how big the immediate impact has been," noted Hollingsworth.

The pound stood at USD1.3121 at the London equities close, compared to USD1.3080 at the same time Friday.

German business sentiment weakened in July, the Ifo business confidence survey revealed, but came in above consensus expectations. The business climate index fell to 108.3 in July from 108.7 in June, but was above the expected score of 107.5.

The DAX 30 index in Frankfurt lost some of its early gains after the business sentiment report, closing up 0.5%. Meanwhile in Paris, the CAC 40 in Paris rose 0.2%. The euro was quoted at USD1.0977 at the equities close, against USD1.0973 on Friday.

In New York, the Dow 30 and the S&P 500 were both down 0.5%, and the Nasdaq Composite was down 0.2%, with investors getting ready for a week that will see more than a third of S&P 500 companies release quarterly updates.

US telecom giant Verizon Communications confirmed it acquired the operating business of struggling Internet company Yahoo for around USD4.83 billion in cash. Verizon had emerged in recent days as the front runner to acquire the group. The transaction is expected to close in the first quarter of 2017.

Yahoo, under CEO Marissa Mayer, has been struggling for the last four years to win back the market share it lost to Internet giants like Facebook Inc and Google, a unit of Alphabet. In February, Yahoo started seeking bids for its core web businesses, which include its search and media content operations.

At the London equities close Verizon was down 0.6%, while Yahoo was down 2.4%.

On Tuesday, Verizon will release its second-quarter results before the Wall Street open, as well as fast-food giant McDonald's. After the US equities close, iPhone maker Apple releases its third-quarter results, while micro-blogging company Twitter reports its second-quarter figures.

Other highlights in the UK corporate calendar Tuesday are half-year results from Provident Financial, GKN, Virgin Money Holdings, Segro, and Man Group. PZ Cussons releases full-year results, while Brewin Dolphin Holdings issues a trading statement.

In the economic calendar, the UK's BBA mortgage approvals are at 0930 BST. In the US, the Redbook index is at 1355 BST. The US Markit services and composite PMI readings are at 1445 BST, while US consumer confidence data are at 1500 BST. Later in the London evening, API crude oil stocks data are at 2130 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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