FTSE dips after Syria strike; WPP falls on Sorrel exit

By Julien Ponthus and Kit Rees

LONDON (Reuters) - UK shares eased on Monday morning, with two corporate events taking centre stage: CEO Martin Sorrell's exit from advertising company WPP and U.S. hedge fund Elliott Management raising its stake in hotel and coffee-shop operator Whitbread.

The blue chip FTSE 100 index <.FTSE> ended the session down 0.9 percent at 7,198.20 points, with traders across Europe remaining cautious, fearing that the weekend's missile strikes in Syria could increase tensions between the United States and Russia.

Relief over the lack of an immediate escalation pushed oil prices lower and UK energy stocks followed suit. BP <BP.L> was down 1.6 percent and Royal Dutch Shell <RDSa.L> 0.7 percent.

Shares in WPP ended 6.5 percent down as investors gauged how the world's biggest advertising agency would do without its founder, gone after an allegation of personal misconduct.

"It is not clear whether the current margin targets or dividend payout will survive management change," Citi analysts said in a note, adding that the stock's loss of a third of its value in the past year could attract "value" investors.

Analysts have speculated that the group, which was being restructured after a year of lower spending from some clients, could now sell some assets if led by different management.

WHITBREAD JUMPS

Shares in Whitbread <WTB.L> led the FTSE with a 7.2 percent rise after activist hedge fund Elliott Management revealed that it had increased its stake in Britain's biggest hotel and coffee-shop operator to more than 6 percent.

"Its reported push for a (coffee-shop) Costa demerger differs from the company's current strategy, likely leading to further speculation, which should support the shares," Morgan Stanley analysts said.

The disclosure came nearly three months after Reuters reported that another activist investor, Sachem Head, wanted Whitbread's management to examine a break-up to boost the value of its individual businesses.

Shares in Shire <SHP.L>, the London-listed pharmaceuticals company that specialises in rare diseases, rose before paring gains to end 1.3 percent down after announcing plans to sell its oncology business to French drugmaker Servier for $2.4 billion.

Shire, has also been flagged as a possible bid target for Japan's largest drugmaker Takeda Pharma.

"Oncology was an area Takeda had specifically highlighted in its rationale for a deal, so whether by accident or design Shire’s latest move could undermine the logic behind the transaction," said AJ Bell investment director Russ Mould.

Steelmaker Evraz <EVRE.L> fell by 7 percent as jitters over U.S. sanctions against Russia continued to weigh on companies with exposure to the country.

Sage <SGE.L> was still trading in negative territory, down 3 percent after Friday's decline of about 8 percent on a cut to the company's full-year revenue growth forecast.

(Reporting Julien Ponthus and Kit Rees; Editing by David Goodman)