Market Report: Goldman turns to Unilever after ITV bid fails

The talk has done the rounds before and despite its £25.2bn market capitalisation, including debt, the Anglo-Dutch household goods and food group is not considered too large for a private-equity bid. One trader said: "There is good support for the stock at 585p and the belief is that it would only take a group of five or six of the largest funds to take the company private. Strategy is a bigger issue than price, and Unilever is not a stock to be short of."

With £8.4bn of debt on its books, a 750p bid for the group would give it an enterprise value of about £30bn, which would require an equity injection from a bidding consortium of about £7.5bn with the balance made up of debt. Shares in Unilever were in demand all day and closed 4p better at 589p.

Investors deserted ITV en masse after the bidders, Goldman and the private-equity groups Apax Partners and The Blackstone Group, decided not to proceed almost as soon as the ITV board turned down their second offer. Private-equity firms are generally not keen on hostile bids and rumours around the market indicated that Blackstone in particular was not happy about the perceived aggressive nature of the bid. Not surprisingly, volume in ITV was heavy with 117.3 million shares changing hands as the stock fell 5.75p to close at 119.25p.

Completing a double of private-equity pull-outs, Kingston Communications, the Hull-based telecoms group, confirmed that takeover talks it started in November will not now lead to a bid. The bidder, believed to be the private-equity house The Carlyle Group, began talks soon after buying Kingston's satellite business for £34m. Early indications were that Carlyle was initially prepared to go as high as 85p per share, but market rumours were that Kingston was not prepared to accept a lower offer. Kingston shares plummeted, declining 7.25p to 59.75p.

Once again the FTSE 100 was unable to hold on to the 6,000 level, with sellers taking the upper hand as the market ended the session in freefall, 50.6 lower at 5,964.6, despite a positive opening on Wall Street.

Kazakhmys was again well bid as traders and brokers warmed to its results, announced on Thursday. Heavyweight US broker JP Morgan increased its target price on the stock in light of the numbers and strong demand saw the shares trade 36p better to close at 1,078p.

The rest of the mining sector was unable to maintain the momentum and succumbed to a hefty bout of profit-taking, with Rio Tinto 59p worse at 2,922p, despite a bullish sector note from Morgan Stanley with a 3,800p target. Xstrata was off 29p to close at 1,863p and BHP Billiton shed 20p to close at 1,051.5p.

Results from Man Group, the hedge fund and commodity trader, will be well ahead of market forecasts. In a trading statement, the company said its funds had performed well and that efforts to integrate the bankrupt futures trading company Refco were going well. Man has been a firm favourite among traders for a long time and buyers piled in on the news, sending the stock 61p higher by the close to 2,465p, an all-time high.

In the mid-caps, Stanley Leisure was well bid on the back of rumours that Rank is preparing a bid that may value the shares at 915p. Rank, itself the subject of recent take over talk, added 7.5p to close at 225.5p while Stanley, which sold its flagship casino in London's St James's last month, was 18p firmer at 734p.

In the smaller companies, the pork and delicatessen products supplier Cranswick pleased the market by confirming that results will be in line with expectations. House broker Investec reiterated its "buy" recommendation on the stock, 18p better at 631.5p.

Central African Mining continued its good recent run by adding another 3.75p to close at 60.5p, as traders talked about a bullish upcoming note due to be published by Credit Suisse.

AIM is a truly international marketplace these days, a fact highlighted by companies like Beximo. The Bangladeshi generic drug manufacturer gained the best part of 20 per cent yesterday as it said it would begin manufacturing a generic version of Roche's bird flu vaccine Tamiflu. The stock, floated at 60p in November last year, added 14.5p to close at 89p.

Finally, traders will be on the lookout for Ladorum as the company floats on Monday. The group, which handles intellectual property rights in the media and entertainment industry, raised £5m at 100p per share in an offer that was six times subscribed.

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