Unilever dives as P&G starts to get mean with its cutbacks

Fears that competition from its arch-rival is about to get a lot fiercer spooked investors in Unilever today.

The Marmite owner was left clutching the wooden spoon on the Footsie after Procter & Gamble unveiled plans last night to cut $10 billion (£6.4 billion) in costs over the next four years.

The move by the world's largest consumer goods company sparked concerns that the savings would be used to launch an assault on its competitors, with City voices pointing out that it will give the group a large amount of funds to up its promotional activity.

In addition, ING's Marco Gulpers warned the plans will create "more flexibility that could impact peers" and mean P&G "could make another leap forward...just as Unilever was about to catch up."

Meanwhile, Liberum Capital's analysts warned the announcement "represents a new source of downside risk" for the home and personal care sector, saying "it may be naïve to think the level of competition intensity from P&G has eased".

Unilever slipped 60p to 2030.5p, with disappointing industry sales data from Nielsen also not helping.

Elsewhere, vague speculation Cove Energy could be about to receive a counterbid from China helped the east Africa-focused explorer move past the 195p-a-share that Royal Dutch Shell, 10p lower at 2355.5p, has agreed to pay, climbing 3.25p to 198.38p on AIM.

At the same time Ophir Energy, one of the names put forward as a possible takeover target in the wake of the Cove deal, set a high on the FTSE 250.

Its move of 22p to 397p came after JPMorgan Cazenove said it offered one of "the most interesting drilling campaigns
in 2012".

Meanwhile, Max Petroleum ticked up 1.5p, or 12%, to 13.88p as vague bid rumours, which traders were unimpressed by, refused to go away, despite Kazakhstan-based Zhaikmuna earlier in the week denying speculation it might be interested in the explorer.

Overall, the FTSE 100 was largely flat, edging up just 1.46 points to 5939.35 as traders said the market was waiting for the next trigger to go higher.

GKN was high up the leaderboard, advancing 5.4p to 233.55p amid hopes takeover activity in the industrials sector could be heating up. Oriel's Harry Philips said although the UK engineers have been active in making acquisitions themselves, "there is much more to come but also in reverse".

The analyst picked out GKN as one of his favourites, while UBS also raised the group's target price to 250p ahead of its full-year numbers next week.

Unlike its rival Royal Bank of Scotland yesterday, Lloyds' final results prompted it down 0.5p to 36.09p after admitting revenues for 2012 would drop.