Market Report: Bid rumour mill boat comes in for Forth Ports

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The Independent Online

If the word among traders is correct, there could be no independent port operators left in the UK. P&O and Associated British Ports have already been swallowed up and it looks like Forth Ports will not last much longer as talk of an imminent bid approach did the rounds yesterday.

Traders are convinced that an offer is in the pipeline for Forth, although one claimed that the bidder is "definitely not" Macquarie Bank. However, others said that a bid from the acquisitive Australian infrastructure investor cannot be ruled out since Macquarie lost out in the AB Ports takeover. Traders said that Forth Ports, which includes Tilbury docks on the Thames and Leith and Grangemouth docks on the Forth estuary, could attract a bid worth an initial 2,300p per share, but a bidding battle could see that priced pushed significantly higher. The shares were in demand all session and closed 113p better at 2,128p.

Thursday's bearish note from the US broker Sanford C Bernstein on AstraZeneca continued to flush out sellers. Shares in the UK's second-largest pharmaceutical group shed another 60p to close at 2,890p. It is looking like a bleak last quarter of the year for shareholders after a stellar performance by AstraZeneca until mid-October. Since then the shares have tanked, losing 18.6 per cent. Meanwhile, GlaxoSmithKline edged 9p firmer to 1,360p but remains in the red for the current year.

Cairn Energy bucked a weaker oil sector by closing 87p better at 2,057p as rumours did the rounds that the initial public offering of its Indian operations was progressing well. The major index integrated oil stocks BP and Shell continued to weaken, with BP 6.5p worse at 567.5p and Shell 22p worse at 1,795p.

A Goldman Sachs review of the mining sector gave investors little reason to increase holdings. According to the US investment bank, the only "buy" in the sector at the moment is Xstrata. Goldman believes that thanks to its acquisition of Falconbridge, the company should get a re-rating by the market that could see it challenge the positions of Rio Tinto and BHP Billiton as the undisputed sector heavyweights. The broker upped its target for Xstrata to 3,165p as the shares climbed 46p to close at 2,326p.

In the wider market, the dollar's continuing slide put pressure on global markets. The Dow Jones lost 40 points in early deals, sending London shares lower. The FTSE 100 index closed the week with a 27.3 decline to 6021.5.

Results next Friday from Berkeley Group are expected to be solid, and traders backed the stock yesterday as it closed 31p firmer at 1,655p. However, the house building sector was mixed as investors took profits after a good week, with George Wimpey, 7.5p worse at 545.5p, and bid target Wilson Bowden, 23p weaker at 2,206p, both ending the session in the red. High in the mid cap fallers was Rank Group, 8p lower at 270p, after the investment bank Citigroup downgraded its stance on the shares to "hold" from "buy" on valuation concerns. The rumour in the market is that the sale of the Hard Rock Café chain is not going as well as the company had hoped.

The US investment bank Morgan Stanley put the skids under hopes that music publisher EMI will get a knockout offer. The company confirmed last week that it is in takeover talks, but Morgan Stanley does not think that a new offer will match the 320p offered by Warner Music earlier this year. The bearish noises from Morgan Stanley, which also reiterated its 270p target price, drove the shares 5.25p lower to close at 290p.

Plasmon topped the small cap leaderboard with a 7.5p rise to 24p, but volume was modest and market makers were at a loss to explain the move. Yesterday's rise will give little comfort to long-term shareholders as the stock has been in freefall for the last couple of years, having traded above 250p in early 2004.

The biotechnology group Alizyme was also high on the list of small cap movers after completing a placing with institutional investors that raised £14.5m. The group also surprised investors by announcing that joint founder and chief executive Richard Palmer will step down and be replaced by the finance director Tim McCarthy. The stock closed at 87.5p, 11.25p better.

Imperial Energy confirmed that it will move on to the main market in the first half of next year, becoming the first oil and gas company to do so. Brokers Oriel and Bridgewell both upped their price targets for the shares to 1,032p and 949p respectively as the shares added 6.5p to close at 726.5p.

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