London's FTSE 100 was up 0.2% to 7,734.49 in afternoon trade on Wednesday as investors digested some solid updates from Burberry and Micro Focus and deal news for Paddy Power.
Software group Micro Focus International was the standout gainer after it said that a new $40m licensing deal will help to boost its first-half revenue, which is now expected to be better than the guidance of -9% to -12% at constant currency.
Paddy Power Betfair was in the black after it confirmed it is in talks over a potential merger of its US business and US-based FanDuel to target the market that will open up following the Supreme Court's overturning of a federal ban on sports betting.
Joshua Mahony, market analyst at IG, said: "Just when investors began fearing the future for bookmakers in the UK, we are seeing great excitement over the prospect of a US revival in sports betting, with Paddy Power Betfair gaining sharply amid rumours of a potential merger with US firm FanDuel.
"The impact of government restrictions on fixed odds betting terminals is no doubt going to be hugely significant, with warnings of a potential 20,000 jobs being lost as the maximum stake is slashed from £100 to £2. However, today's rise for Paddy Power comes as investors hope that the firm can realign its interests towards the US and away from a shrinking UK market."
Luxury fashion brand Burberry rallied as it presented a smart but not swanky first set of full-year results under new chief executive Marco Gobbetti, beating City forecasts despite a 1% fall in revenues. The group also announced a new £150m share buyback.
Paper products maker Mondi edged higher after saying it expects first-quarter underlying operating profit to be 15% higher year-on-year at 295m and 6% up on the fourth quarter of 2017.
On the downside, Smurfit Kappa was the biggest loser as International Paper said it would not be making a hostile bid for the paper and packaging company.
The Irish Takeover Panel announced earlier that International Paper had until 0700 BST on 6 June to announce whether it would be making a binding offer for the group. IP said it believes its current proposal represents a compelling strategic and financial rationale for a combination with Smurfit Kappa.
However, it has stressed the importance of proceeding on an agreed basis. "To that end, IP confirms that it will not proceed with a binding offer unless it is recommended by Smurfit Kappa's board of directors."
British Gas owner Centrica slumped as Morgan Stanley cut the stock to 'underweight' from 'equalweight' and reduced the price target to 115p from 160p, saying that headwinds are building.
"Adjusted for the dividend, Centrica shares
are broadly trading back at the pre-November profit warning level. Yet it continues to lose customers across its UK and US businesses, and it has missed targets for new business growth."
BT Group retreated as Bernstein downgraded its stance on the stock to 'market perform' and slashed the price target to 215p from 305p.
"BT's FY18/19 guidance and the announcement of a major restructuring programme are signs of a business in turmoil. This has forced us to recalibrate our fundamental outlook," it said.
Royal Mail was also weaker ahead of its final results on Thursday.
FTSE 100 - Risers
Micro Focus International (MCRO) 1,358.50p 7.05%
Paddy Power Betfair (PPB) 8,300.00p 6.96%
Anglo American (AAL) 1,876.00p 4.07%
Mondi (MNDI) 2,060.00p 3.10%
Burberry Group (BRBY) 1,852.00p 2.69%
Rio Tinto (RIO) 4,332.00p 2.42%
Glencore (GLEN) 388.40p 2.40%
Hargreaves Lansdown (HL.) 1,966.00p 2.32%
NMC Health (NMC) 3,612.00p 2.03%
DCC (DCC) 7,365.00p 1.87%
FTSE 100 - Fallers
Smurfit Kappa Group (SKG) 2,930.00p -5.73%
Centrica (CNA) 140.85p -5.09%
BT Group (BT.A) 203.75p -1.47%
Royal Mail (RMG) 600.20p -1.44%
Lloyds Banking Group (LLOY) 65.99p -1.18%
Mediclinic International (MDC) 677.00p -1.14%
Vodafone Group (VOD) 196.16p -1.12%
SSE (SSE) 1,384.50p -1.07%
Barclays (BARC) 209.45p -1.02%
International Consolidated Airlines Group SA (CDI) (IAG) 679.40p -0.93%