Market Report: Burren flares up again on talk of Mittal interest

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The Independent Online

The second-line oil exploration and production group Burren Energy only ended bid talks with Eni earlier this week, but if the rumours are correct it will be involved in more talks sooner rather than later.

The word in the market is that Mittal Steel is running the rule over Burren with a view to acquiring the group for its assets in West Africa and Turkmenistan.

Eni walked away from bid talks after making an improved 1,200p-per-share offer, well below some analysts' estimates of fair value. Dresdner Kleinwort believes the stock could go for up to 1,400p per share, and with Korean National Oil Company lurking in the background there is still a chance that a bidding battle over Burren could break out. Burren shares were in demand all session, and closed 42p better at 1,060p.

Northern Rock managed to avoid another collapse, although that is partly because it doesn't have much more collapsing left in it. The shares nudged 0.7p worse to close at 84.1p, as Nationwide, the mutual building society, revealed that it has been a major beneficiary of Northern's woes.

Elsewhere in banks, Alliance & Leicester rallied 26.5p to 602.5p, while Barclays added 3.5p to 493.5p ahead of Tuesday's eagerly anticipated trading statement.

Pharmaceutical stocks were in focus as the broker Citigroup reviewed the sector, telling clients that the long-term underperformance could be poised to turn. Long-suffering shareholders of GlaxoSmithKline, up 61p at 1,221p, and AstraZeneca, up 138p at 2,231p, will be hoping that the broker is proved right.

The blue-chip index managed to stage a bounce even as some mining stocks suffered some follow-on selling after Wednesday's bloodbath. Analysts are becoming increasingly unsure about BHP's bid for Rio Tinto, with more expressing concerns about how much BHP is willing to spend. BHP Billiton shed 7p to 1,489p, with Antofagasta, off 17p at 639p, and Xstrata, down 80p to 2,869p, heading the list of blue-chip fallers.

With Wall Street being shut for Thanksgiving, at least traders were spared another afternoon sell-off. Volume was lower than usual, and with little for investors to get their teeth stuck into the FTSE 100 rallied 84.4 to close at 6,155.3.

Despite it being a good year for recruitment stocks financially, the sector has been as badly hit by recent weakness as any other. Directors of Michael Page clearly believe the market has got it wrong – three, Steve Ingham, Steve Puckett and Charles-Henri Dumon, dug into their deep pockets and purchased £476,000 worth of stock each. The shares rallied 8.25p to 288.75p.

The iron mining group Ferrexpo topped the mid-cap risers for most of the day, posting a 20.5p gain to 224p. The company confirmed that it is embarking on a $158m expansion at its Gorishne project, extending the life of the mine to the year 2035. The broker Cazenove reiterated its outperform rating on the stock, giving the shares "fair value" of 360p.

England's failure to reach the European championships next year had grim consequences for sports retailers. SportsDirect tanked 16.5p to 96p and JJB Sports shed 5.75p to 140p. However, gambling stocks, also set to lose out on millions of lost punts, appear to already have largely priced England's exit in – Ladbrokes fell just 1.5p to 300.25p and William Hill climbed 1.5p to 490p.

Erinaceous Group, the property group that has lost more than 96 per cent of its value this year, fell another 2.25p to 12.25p as it emerged that the founders, Neil Bellis and Lucy Cummings, both of whom resigned this week, will leave with severance pay of £736,000. Although the pay-off was in line with their contracts and draws a line under their involvement, traders said that it will leave a very bitter taste in the mouths of most investors.

Johnson Service Group bounced again, this time adding 3.25p to close at 86p, as rumours of a takeover by the Swedish private equity group Industri Kapital did the rounds once more. Traders said that a bid with any meaningful premium is unlikely, but a premium may not be required for shareholders to accept an offer.

The volatile carbon credit trading group Climate Exchange bounced after a grim run since the middle of the summer that has seen its share price more than halve. The shares are illiquid and a handful of buyers took a punt on the stock at under 900p, sending the shares sharply higher to close at 952.5p, 81.5p better.

Shares in Landkom International got off to a decent start after a placing at 52p. The company raised £54m of new capital via the placing, organised by Libertas Capital, with the intention of becoming a large-scale producer of agricultural feedstock. By the close the shares had nudged 7p better to close at 59p, giving investors a 13.5 per cent premium.

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