Trading in Marks & Spencer yesterday was dominated by rumours that Philip Green is looking to table a bid for the retail giant and some even suggested that he would be willing to pay up to 400p a share for the company. The speculation sent M&S 8.25p higher to 290.5p as investors piled into the stock in the hope that Mr Green will add the group to his existing retail empire, which includes Bhs, Wallis and Miss Selfridge.
Despite traders' excitement, Mr Green, speaking from his home in the South of France, poured cold water on the speculation. "This is the first I have heard of it," said the famous retailer. According to recent reports, Mr Green has now shifted his attention away from the UK high street and is looking to expand his retail interests into Eastern Europe. He is expected to open a Bhs department store in the heart of Moscow next month.
His last acquisition was the £850m purchase of Arcadia in 2002. That has proved to be a great success for him, with the group boasting a 95 per cent jump in profits during the first full year of his ownership. Back in 2000, Mr Green did attempt to launch a takeover of M&S but was scuppered when a row erupted over his wife's shareholding in the retailer.
Meanwhile, Morgan Stanley got shares in mmO 2 moving. They closed 3p higher at 102.5p as the broker argued that the stock should trade some way above its current level, even on a standalone basis. Since news broke that KPN had tabled an offer for the mobile phone group, takeover speculation has dominated trading in the group's shares. Morgan Stanley believes KPN's offer, said to have been at near the 110p level, will provide a great support for mmO 2 shares but argued that, even without a takeover, the stock should trade at 118p by the end of the year.
The housing sector was alight with talk of consolidation and Persimmon, the industry's biggest player, was tipped as being the most likely to kick off the process. The excitement seems to have been sparked by news Persimmon, up 28.5p to 680p, had appointed Citigroup Global Markets as its new financial adviser, alongside ABN Corporate Finance, which quickly led to suggestions that the US bank has been employed to help the house builder seek out acquisitions.
Numis Securities agreed that the group is very well placed to complete a major deal. "We believe that Persimmon is an ideal candidate to make a sizeable acquisition which could help volume growth and margins going forward," the broker said. It argued that Westbury, 28p better to 505p, and Bellway, up 16p to 807p, made ideal takeover targets and reiterated a "buy" rating on the duo.
Westbury has long been viewed as the most likely house builder to be bought out by a rival. Rumours that Schroder Investments Management has been approached for its 11 per cent stake in the group have circled City dealing rooms on a number of occasions in recent months. Meanwhile, Redrow gained 22.25p to 406p, Crest Nicholson rose 9p to 357p, Bovis Homes added 30p to 595p, Barratt Developments improved 26.5p to 601.5p and Wilson Bowden put on 37p to 1,166p.
HMV rose 6.25p to 224.75p after the retailer assured analysts at Investec Securities that all is going to plan ahead of April's trading statement. HMV is known to have had a strong third quarter and the broker believes this has continued into the final quarter of the group's year. Market share at the retailer is running at record levels, which indicates that the City's profits forecasts may prove to be conservative.
Lower down the pecking order, Kewill Systems rose 1.5p to 64.5p amid whispers the group will soon announce a contract win for its MTX-Trade product. Meanwhile, Amstrad was in demand, rising 6p to 164p, as gossips talked of strong trading at the group. Word has it Amstrad's emailer product has had a record quarter with demand for the group's set-top-boxes also strong.
IP2IPO fell 5p to 449p despite suggestions that some of the company's directors have been busy buying stock. IP2IPO shares have been a strong performer since its October float, which raised £31m at 275p. Parkdean added 3.5p to 241p as dealers reported talk of strong trading at the caravan park operator. Like-for-like sales are said to be powering away at the group.
Easynet, down 1p to 130.5p, saw Will Gardiner, the chief financial officer, buy 30,000 shares at 131p. Earlier this week, the internet services provider unveiled the acquisition of Novaxess Beheer, a Dutch broadband provider, in a £26m deal. Xaar put on 5p to 68p after Panmure Gordon upgraded its rating on the ink jet printing specialist from "neutral" to "buy" and set a 74p price target. "The outlook for the company is very good," the broker told its clients.
Aminex gained 0.5p to 23.75p after disclosing the sale of its stake in the Russian oil group Ideloil for $2.2m (£1.2m) in cash.
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