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.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
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

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific