Market Report: Centrica bid hopes send share price soaring

Although investors warmed to the story early inthe day - helping Centrica shares touch a high of 263p - their ardour waned as many analysts poured cold water on the speculation. Among them was ING Financial, which said it does not believe a bid is imminent.

But the broker did admit that some form of corporate action is likely at the company in the longer term and suggested a tie-up with Gaz de France makes good sense. ING said: "Gaz de France has more similarities with Centrica's business model and a desire for international expansion."

After the sale of its roadside recovery business, the AA, Centrica has been increasingly viewed as ripe for consolidation. In fact, this year it was reported that Sir Roy Gardner, its chief executive, had held merger talks with Norsk but had been rebuffed. Back then, political concerns were said to have affected the decision of Norsk, which is 44 per cent owned by the Norwegian government.

One can see why Centrica's management might be keen to do a deal. The company's major weakness is its lack of upstream gas assets. As a result it is being hit by the high price of the commodity. But a combination with an upstream player with plenty of gas in the ground would protect Centrica from this.

Meanwhile, theFTSE 100 was in retreat, falling 25 to 5,275.2. Tom Hougaard, the chief strategist at the financial spread betting firm, City Index, is cautious about the near-term outlook for stocks. He said: "We are getting close to a crucial support in the market and if the bulls don't show up at this point in time, indices are likely to head sharply lower."

Dixons lost 7p to 152p as the stock went ex-dividend. Its cause was not helped by Credit Suisse First Boston, which urged investors to switch to Dixons' rival, Kesa Electricals, off 0.75p at 258.25p. The Swiss broker noted that recent newsflow from peers has been poor and warned that if the current UK consumer weakness continues, earnings forecasts for the second half of Dixons' year could prove to be vulnerable.

The retailer is due to issue a trading statement at the start of next month and CSFB is not expecting anything very positive to come from it. Not only is Dixons up against a general downturn on the high street but its Currys chain is having to contend with sharp falls in the prices of personal computers. CSFB expects shares in the group to underperform for the time being.

Sage fell 3.25p to 230.75p on concerns that the group's accountancy software is likely to face growing competition from Microsoft. On Tuesday, the US software giant unveiled its latest small business accountancy product to investors. It is due to be launched next month and will compete with Sage's Peachtree package. Given the recent strong performance by Sage stock and this new competitive threat, Merrill Lynch argued that there is little further upside to UK group's shares.

Bodycote rose 5p to 211p after Deutsche Bank upgraded the stock to "buy" from "hold" in response to Tuesday's strong interim results from the engineer. Deutsche said: "Bodycote is enjoying robust demand from aerospace and oil customers while the group's first-half profits came in 5 per cent ahead of our expectations."

Bid rumours again circled Laird Group, up 7p to 343p. More than 4.2 million shares changed hands, four times the volume on an average day, as traders piled into the engineer in the hope of making a quick buck should an offer emerge. Talk of an offer for Laird has circled City dealing rooms since the start of last week.

Peter Hambro Mining rose 8.5p to 713.5p on hopes that it may soon be in a position to upgrade the size of its Pioneer project in Russia. SHL Group added 2.5p to 142p as the company was heard to be enjoying sales growth in Europe, while ICM Computing held steady at 347.5p despite gossip that its management is about to secure an important contract win.

Finally, Shield Capital added 0.37p to 8.12p on talk that the cash shell is close to completing a major acquisition. Shield is said to be in the final stages of negotiations aimed at the reverse takeover of a company operating in the clean fuels sector.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
Life and Style
President Obama, one of the more enthusiastic users of the fist bump
science
Arts and Entertainment
Peter Griffin holds forth in The Simpsons Family Guy crossover episode
tv
Life and Style
Upright, everything’s all right (to a point): remaining on one’s feet has its health benefits – though in moderation
HealthIf sitting is bad for your health, what happens when you stay on your feet for a whole month?
News
Kristen Stewart and Rupert Sanders were pictured embracing in 2012
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Java Developer - Banking - London - Up to £560/day

£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried