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
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee