Market Report: Misys is snapped up after talk of bid this week

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The Independent Online

It is six weeks since Misys, the financial, insurance and healthcare software group, opened its books to a handful of potential bidders. The word is that a bid will come this week, valuing the company at 275p per share or a little more than £1.3bn. It is a bid that could be immediately trumped by a 300p offer.

So far there have been few names in the frame as potential bidders for Misys. SunGard, a US software group controlled by a consortium of private equity houses, is thought to be interested, as are the private equity groups Permira and General Atlantic Partners, two of only a handful of major private equity buyers not involved in SunGard. Misys's senior management is thought to be in the final stages of putting a bid together. Misys shares rallied 3.75p yesterday to close at 254p.

In the blue-chip index, a weaker dollar and signs of increased demand for commodities boosted the mining sector. Kazakhmys, the copper producer, was top of the leader board after a 47p gain to 1,287p, continuing the summer bounce for the company. Elsewhere, Xstrata, 34p better at 2,462p, also attracted support thanks to Goldman Sachs' bullish note on Friday, giving the stock a 3,400p target.

Bank of America has been linked with most of the FTSE 100 financials, but until yesterday Man Group, 12p firmer at 438p, was not thought to be on its wish list. Traders believe the hedge fund and commodity trading group would make a good fit for the bank, although any bid would have to be at a substantial premium to win shareholders' support. Man appears to be doing very well on its own - the stock has more than doubled in the past 12 months.

Strength in mining and financial stocks helped the FTSE 100 continue its strong run since the start of August that has seen it add more than 8 per cent. Even with New York closed, it carried on where Asian markets left off by adding 37.5 to close at 5,986.6 - tantalisingly close to regaining the 6,000 mark.

According to the broker Seymour Pierce, summer sales at the discount retailer Matalan, 6.5p worse at 170.75p, have been "terrible" and may threaten a proposed management buyout of the group. The analyst Richard Ratner believes that if sales are as bad as anecdotal evidence suggests, the chairman John Hargreaves may struggle to pay more than 170p per share for the group, substantially less than investors had hoped for. Mr Ratner reiterated his "sell" recommendation, saying if a bid did not come the share could easily track back to the 140p level. The group reports half-year results tomorrow.

Another bid rumoured to be in trouble is the approach to the mobile phone content provider Monstermob, which confirmed it was in talks a month ago. The word is that the talks have stumbled on the company's Chinese operations. Changes to the regulatory environment in China led to a disastrous profits warning for Monstermob in July which saw the shares lose 58 per cent of their value. The stock tanked 13.75p yesterday to close at 73.5p.

Gold Oil finally made a statement about its Peruvian operations after a three-week run-up in the shares that has seen the price more than double. However, the statement was nowhere near as good as some punters had hoped, confirming that water was hindering the flow of hydrocarbons from the San Alberto 1X well. The shares lost 35 per cent in early trade. Market makers said CFD investors then supported the stock aggressively to avoid margin calls, halving losses as the shares closed at 11.5p, a fall of 3.13p.

The hedge fund manager RAB Capital added $500m (£260m) to its funds under management with the £20.6m acquisition of another St James's resident, Northwestern Investment Management. The broker Bridgewell Securities believes RAB should have £5bn of funds under management by the end of the current year and retained its "overweight" advice on the shares, which closed 8.5p better at 112p, an all-time high.

Oakdene Homes, the AIM-listed housebuilder, is still in the frame for a bid according to some traders. The word yesterday was that Persimmon, the FTSE 100-listed housebuilder, will offer shareholders 200p per share, valuing the company at £110m. Oakdene jumped 12p to 184p. Meanwhile, Persimmon added 31p to 1,275p.

The cash shell Voss Net returned from suspension and announced a reverse takeover that will see it renamed Tanzania Gold, with Clive Sinclair-Poulton as chief executive. The shares closed 0.63p better at 4.37p as more than 11 million changed hands.

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