Market Report: Investors forsake Aegis as High Noon looms

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The Independent Online

Aegis was one of the worst performers in the FTSE 250 yesterday, down 6.75p to 121p, as investors took the view that a bid is unlikely to be tabled for the media group before today's Takeover Panel deadline at noon.

The Panel, which polices mergers and acquisitions in Britain, told Sir Martin Sorrell's advertising giant WPP and the US buyout specialist Hellman & Friedman to show their hand by the end of this week or walk away for six months. They signalled their interest three months ago after French ad group Publicis back-tracked on a 140p-a-share approach, and have been looking at a £1.6bn joint offer.

However, Vincent Bolloré, the French financier and chairman of Publicis' rival Havas, has built up a near-25 per cent stake in Aegis and wants in on the action. He has been racing against time to put together a three-way bid with WPP and Hellman, but is thought unlikely to be ready today. He has been refused an extension to the deadline.

Meanwhile, with Wall Street closed for the Thanksgiving public holiday, blue chips had a quiet session. The FTSE 100 fell 20.7 points to 5,511. Cautious broker comments hit the banking sector. Standard Chartered was the worst performer, down 22p to 1,264p, after UBS downgraded its stance on the emerging-markets bank to "neutral" from "buy". The Swiss broker said it preferred Europe-focused emerging-market banks such as Austria's Erste Bank and Raiffeisen, and pointed out that HSBC offers good exposure to Asia's booming economies at a lower valuation than Standard Chartered. Elsewhere in the banking arena, Barclays fell 7p to 607.5p, Royal Bank of Scotland lost 4p to 1,691p, Alliance & Leicester fell 4.5p to 900p and Bradford & Bingley retreated 2.25p to 376.25p as Lehman Brothers urged investors to take profits from the sector's recent gains. The broker said: "The recent rally in UK banks represents an opportunity to reduce holdings. Although the approaching pre-close period trading statements are likely to be supportive of short-term earning estimates, this looks largely discounted. Meanwhile, the longer-term negatives remain."

HBOS fell 11.5p to 885.5p amid talk the group is considering a bid for St George, Australia's fifth-largest commercial bank.

Corus ticked 1p higher to 52.75p as it emerged that Alisher Usmanov had sold down his holding in the steel maker to less than 3 per cent. The Russian businessman holds his stake in Corus through Gallaher Holdings, a Cyprus-registered company. He first bought into the Anglo-Dutch group in 2003 and quickly built up a 13 per cent holding. Back then Corus was in danger of going bust and at one point during that year its shares traded at less than 5p. But since then the company has enjoyed a renaissance and with it Mr Usmanov is estimated to have make a profit of more than £130m on his stake. These days Corus is regularly tipped as a possible takeover target.

As is the engineer Cookson, 4.75p higher to 385p yesterday. Gossips reckon that a bid for the company is on the way at anywhere between 450p and 500p a share. But it was unclear who would be interested in buying the company. Fibernet, unchanged at 71p, was also talked of as vulnerable to takeover. There was heavy trading in Foseco, 0.5p higher at 144p. More than 30 million shares in the recently floated speciality chemicals group changed hands. The bulk of this crossed the market 135p. Dealers reckoned that Cinven was behind the selling. The private-equity house holds a stake in Foseco after it backed the 2001 management buyout of the firm from Burmah Castrol.

Among the smaller companies, Eleco rose 2.5p to 49p after John Ketteley, its chairman, bought 20,000 shares at 46p. There was also director-buying at BTG, 6.75p higher at 221.5p. Christine Soden, the technology group's finance director, spent £15,000 on 7,300 shares at 216p. Walker Greenbank, the upmarket wallpaper maker, was steady at 17p despite that news fund manager Gartmore had taken a 14.9 per cent stake in the company.

Gulf KeyStone dropped 11.25p to 62p after yet another disappointing drilling update from the Algeria-focused oil explorer. BATM Advanced Communications rose 3.5p to 32.5p after the Israeli telecoms group boasted of winning its biggest contract to date.

Finally, ILX Group jumped 8p to 110p as Charles Stanley applauded the training group's £2.2m acquisition of the privately owned Mount Lane this week. The broker slapped a "strong buy" rating on ILX and said the deal was a great strategic fit. According to Charles Stanley, the acquisition will enhance ILX's earnings quickly, and therefore it raised its price target on the shares to 130p.

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