Leading shares opened higher this morning, starting the new quarter on a firm note, thanks to a flurry of M&A news and speculation with confirmation of a Boots/Alliance Unichem merger providing the early excitement, dealers said. By 08.15 am, the FTSE 100 index was up 9.5 points at 5,487.2, while the broader indices were also higher. US stocks ended in positive territory on Friday, with the continued post-Hurricane Rita relief rally combining with some end-of-quarter window dressing to send all three major averages higher for the quarter. The DJIA closed up 15.92 points at 10,568.70, while the Nasdaq advanced 10.47 points to 2,151.69. Across Asia overnight, the Nikkei 225 index closed 49.02 points lower at 13,525.28, weighed down by a disappointing Tankan business survey, while the Hang Seng began its afternoon session 26.48 points lower at 15,402.04. In the UK, Boots and Alliance Unichem both jumped higher in opening deals after confirming widespread weekend press reports of a nil premium merger. The new group, to be called Alliance Boots, will have combined sales of over 13 bln stg and will comprise just under 3,000 retail outlets with a wholesale and distribution network serving over 88,000 outlets. The merger terms will see Boots shareholders holding 50.2 pct of the combined group and Alliance Unichem shareholders 49.8 pct. Boots intends to return to shareholders, through a special dividend, all post-tax proceeds in excess of 400 mln stg from the disposal of Boots Healthcare International, its over-the-counter medicines business that was put up for sale in April. In early reaction, WestLB upgraded Boots to 'outperform' from 'neutral' and raised its target to 675 pence from 590, arguing that it is "essentially positive about the merits of this deal." Prior to the confirmation however, Lehman Brothers said it believes that the proposed deal is very weak from the point of view of Boots' shareholders and thus is likely to fail. Boots shares leapt 41-1/2 pence to 649-1/2, while Alliance Unichem gained 36-1/2 pence to 903. On the downside, Northern Rock fell 8 pence to 827 after an uninspiring trading update. The mortgage bank said it is on track to meet its annual profit growth target, helped by a steady increase in lending and good credit quality.