Market Report: InterContinental Hotels surges on £5.7bn bid talk

The private-equity industry may have spent a staggering $700bn(£357bn) on deals across the globe in 2006, but investors do not expect the spending spree to end just yet. InterContinental Hotels rose 56p to 1,217p yesterday, easily the best blue-chip performer, as talk of a 1,500p-per-share bid persisted.

The favourite to bid for InterContinental is the US group Starwood Capital, run by Barry Sternlicht, a former chairman and chief executive of Starwood Hotels, which includes the Sheraton and Westin brands. Starwood bought Taittinger, the French hotel and champagne group, last year. The Blackstone Group is another possible bidder, as is Permira, the buyout house linked with just about every deal done in London this year. At 1,500p, a bid would value InterContinental at £5.7bn.

The cruise operator Carnival is making a last-ditch attempt to prevent the shares from ending the year as the worst performer in the blue-chip index. Thursday's record fourth-quarter earnings prompted some positive broker comment, with Citigroup, Morgan Stanley and ABN Amro all reiterating "buy" recommendations. ABN has a target of 3,000p for the shares, which closed 63p firmer at 2,599p, although the stock will need to rally further in the last week of the year if it is to avoid the wooden spoon.

The property sector has had a strong final quarter ahead of British Land's and Land Securities' conversion to real estate investment trust status on 1 January. The former ended the session 10p better at 1,660p, a new all-time closing high, while Land Securities closed 11p better at 2,240p. Brokers remain bullish on the sector in 2007 and anticipate strong performance once the conversion is completed.

Trading followed the same pattern as the rest of the week - traders had little enthusiasm for opening new positions. The FTSE 100 closed 6.3 better in the shortened final session before the Christmas break.

HMV Group's Christmas looks like being far from merry. The music and book retailer has already warned investors that trading is worse than expected, and the broker Goldman Sachs weighed in with a downgrade yesterday. Goldman believes the UK retail market is "structurally challenged" and that HMV is losing its pricing power over suppliers. It cut its price target for the shares to 140p from 155p as the stock closed 4.5p worse at 142.25p.

Second-line money managers were in demand again, as F&C Asset Management topped the list of FTSE 250 gainers with Ashmore Group a close second. Most analysts expect the London markets to have another good year in 2007 and investors see the sector as one that is in line for a bout of consolidation. F&C closed 10p better at 208p while Ashmore continued its recovery to end the session 10p firmer at 253p.

Forth Ports, 42p better at 2,164p, pleased investors with an upbeat trading statement. The last remaining independent port operator in the UK told the market property profits will see it perform better over the course of the full year than was previously forecast. However, it is takeover speculation that has really driven the shares higher in the past three months and traders expect a bid in the new year at 2,450p per share.

Meanwhile, a rumour the consumer giant Procter & Gamble is mulling an offer for SSL International is gathering momentum. SSL firmed9p to 369.75p, just short of the high for the year. The word among traders is P&G may be willing to pay up to 500p per share for the condom-to-foot-care group.

In the small-caps, the technology recruitment group InterQuest was 4p firmer at 89p. The company, run by major shareholder Gary Ashworth, is tipped to fly next year after a run of acquisitions, of which more could be in the pipeline. Mr Ashworth is well known to City insiders; his previous company, Abacus Recruitment, was the best performing stock on AIM in 1996 and 1997 before being sold to Carlisle Holdings.

IQE, an AIM-listed supplier of wafers to the solar panel industry, climbed 0.5p to 19.25p as it confirmed the £7.5m acquisition of the Singapore-based MBE. As part of the deal, the group also raised £4.5m by placing 25 million new shares with investors at 18p per share. Chairman Godfrey Ainsworth bought 109,000 shares in the group at just over 19p per share.

The legal battle between Eurogold and Oxus Gold rumbles on, despite shares in Oxus more than trebling in the last month of the year. Oxus lost 2.25p at 37.75p as Eurogold confirmed it has agreed financial backing to continue litigation against Oxus in Australia. The firms are in dispute over the ownership of assets in Ukraine.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Life and Style
Couples have been having sex less in 2014, according to a new survey
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Blahnik says: 'I think I understand the English more than they do themselves'
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam