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Confirmation that mobile phones giant Vodafone is to buy British Telecom's stakes in Japan Telecom and J-Phone Communications, as well as in Spain's Airtel, highlighted the morning's London Stock Exchange dealings.

Vodafone will pay £3.7bn for the Japanese acquisitions and 1.77bn euros for BT's Airtel holding. Vodafone's stake in Japan Telecom will increase from 25-45pc and in J-Phone Communications from 26-46pc, while its Airtel holding will be boosted from 73.8-91.6pc.

Vodafone says it plans to raise around £3m through an issue of new shares, which will be placed in the market via a book-building exercise over the next two days, led by UBS Warburg and Goldman Sachs. Vodafone's shares took an 8.25p tumble to 198p on the news. BT added 2.5p to 601.5p. The £4.4bn raise! d from the deal will help to trim BT's debt mountain.

Other technology stocks celebrated the Vodafone-BT news, with telecommunications equipment manufacturer Marconi putting on 7.5p at 409.5p and CMG 18p at 381p. Misys rose 5.5p to 605p, despite Dresdner Kleinwort Wasserstein downgrading the stock from 'buy' to 'add'. At one time, Sage headed the FTSE risers, following the repeat of a 'buy' stance from both house broker Deutsche Bank and Lehman Brothers, but the group was only 5.5p ahead at 300.25p.

Elsewhere, tobacco titan BAT reversed earlier gains as investors ! moved to lock in profits after in-line first-quarter results. BAT fell 15p to 545p, despite pre-exceptional operating profits of £597m, compared with £545m last year. The tobacco firm, which is in talks over a joint venture with the Chinese government, said the year had started well, and it forecasts growth in full-year pre-exceptional operating profits.


At 12.08pm today, the FTSE-100 and techMARK indices had both retreated to negative territory. The Footsie was 14.4 points down at 5913/6, while the techMARK was 0.81 points away at 2079.87.