Market Report: Crest boosted by talk of Ronson stake sale

Click to follow
The Independent Online

Gerald Ronson once claimed "floating companies is for poor people". For someone with such disdain for publicly listed companies, he hasn't half made a lot of money out of them. The rumour in the market yesterday was that the colourful property investor and chairman of Heron International is poised to offload his 23.3 per cent stake in the housebuilder Crest Nicholson.

Mr Ronson built the stake in Crest almost exactly three years ago, when the shares were trading at about 300p, giving him a profit of about £65m based on yesterday's closing price of 544.25p should he sell up. Crest has been in the frame for a bid since Mr Ronson first invested, and if the stake is sold traders expect the rivals Bovis Homes, George Wimpey and Persimmon to be at the front of the queue. With the battle to acquire the retirement home builder McCarthy & Stone taking its valuation to levels even the most bullish analyst would have been loath to suggest, now may be an ideal time for Mr Ronson to cash in.

Shares in Crest were 1.25p firmer yesterday, despite some housebuilding sector investors saying another bidding battle could stretch balance sheets. Bovis added 3.5p to close at 814p, George Wimpey fell 2.75p to 463.5p and Persimmon closed 5p better at 1,257p.

Record results from Northern Rock gave the mortgage banking sector a shot in the arm after recent takeover disappointments and concerns over the housing market. Alliance & Leicester, which is thought to have turned down a bid from Crédit Agricole valuing the shares at 1,300p in March, was 14p firmer at 1,039p, while Bradford & Bingley closed 14.5p better at 462.75p. Northern Rock topped the blue-chip leaderboard, closing 81.5p better at 1,128p, a gain of 7.8 per cent.

The relief rally in internet gaming stocks continued as US Republican leaders admitted a bill outlawing online gambling looks unlikely to become law before the month-long recess begins next Friday. Betting at horse racing tracks, legal in most states, appears to have been caught up in the legislation, meaning the bill is likely to face more amendments before going to a vote. PartyGaming continued to climb from the low of 85.25p the shares hit last week, closing 3.25p firmer at 109p, while 888 Holdings and Sportingbet also firmed up, adding 12.5p to 161p and 15p to 235p respectively.

The broadcaster ITV is due to report half-year numbers today and investors spent most of yesterday's session getting out of the stock in the belief that results will be even worse than expected. A rumour did the rounds that the chief executive Charles Allen will step down if the first half fails to beat reduced expectations. Shares in ITV were among the worst performers in the FTSE 100, falling 2.25p to close at 98.25p.

Strength in the banking, mining and oil sectors helped the blue-chip index close better once again, up 25.9 at 5877.1, despite an early sell-off in New York.

The influential investment bank Goldman Sachs poured cold water on speculation that the soft drink maker Britvic will face a takeover bid. The bank reiterated its "conviction sell" rating on the shares with a 190p price target. In a note to clients, Goldman said: "We think that there has been consistent and continuing pricing pressure on the trade in carbs to add to the existing woes that have led to the persistent falls in Britvic's earnings forecast for 2006." Shares in Britvic fell a penny to close at 214p.

Shareholders of the cake maker Interlink Foods could be in for sweet news if speculation about a bid for the company turns out to be correct. The shares were hammered after a profits warning in May, losing 60 per cent of their value, but results earlier this month were more encouraging. Traders said for a bid to be accepted by the company it would need to be close to 600p. The shares ended 37.5p firmer at 437.5p, a gain of 9.4 per cent.

The marketing services minnow Delling Group, 0.25p better at 9.75p, pleased investors with confirmation that it has won a £1m-a-year contract to supply the Swedish retail chain Power with in-store screen advertising. The contract is the first firm deal to be signed by the group, which has a further 10 pilot schemes with other retailers, and if all lead to contracts traders expect the shares to perform strongly. The broker Seymour Pierce upped its recommendation on the shares from "hold" to "buy".

Goldplat, a producer of gold and platinum from the by-products of the mining industry, raised £1.5m through a placing by the broker HB Corporate at 7.5p. The group intends to use the proceeds from the placing to expand its operations out of South Africa into west Africa. The shares closed at 8p, giving new shareholders a premium of 6.7 per cent.