Market Report: Predators prepare to swoop on Crest Nicholson

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The Independent Online

The property tycoon Gerald Ronson has built a 26 per cent stake in Crest through his investment vehicle Heron International, and a mystery bidder has approached Ronson within the past week with a view to buying the stake to launch a full bid for the company.

Bovis Homes and Redrow are also thought to be interested in Crest, which has made a successful transition into the affordable housing market, winning a significant chunk of Government subsidies and grants in the process.

Shares in Crest Nicholson have been strong in recent sessions, but traders snapped up profits yesterday and its stock edged 4.5p lower to 544.5p.

Sector watchers believe a bid would have to come in at more than 650p a share, as talk of a merger would look less likely should Ronson decide to sell. Bovis was 5p better at 933p; Redrow gained 12p to 577p.

AB Ports, well bid on Thursday, surged again in yesterday's session as takeover speculation reached fever pitch. Late buying saw its shares rally 33p to 696p.

The worst performer in the FTSE 100 was Prudential, after its rival Aviva said it would not make an offer for the insurer less than a week after admitting its interest. Pru had already turned down Aviva's £17bn offer, and the company will not make another offer without the help of Pru's board, help that looks increasingly unlikely to be given. Pru shares fell 34.5p to 681p, while Aviva rose 9.5p to 831.5p.

Tesco was among the star blue-chip risers, adding 10.25p to close at 346p, as traders speculated that the retail Goliath would take advantage of the relaxed Real Estate Investment Trust guidelines, outlined in Wednesday's Budget. By moving its property portfolio into a Reit, Tesco could raise the best part of £6bn with which it could return capital to shareholders.

Elsewhere in the retail sector, Marks & Spencer was well bid as talk of a private-equity buyout once again did the rounds. Its shares, which have performed brilliantly in a tough environment since the retail entrepreneur Phillip Green's 400p-a-share informal approach was rebuffed in June 2004, added 20.5p to 571.5p.

The FTSE 100 shrugged off a weak Vodafone, down 1.75p to 125.5p, as the London market surged to close 46.2 points better at 6,036.3. Oil stocks and miners were strong, as BP rose 13p to 668.5p despite abandoning a $3bn (£1.7bn) Indian refining project.Shell rose 34p to 1,840p;Rio Tinto closed 75p better at 2,848p.

The merger in 1999 between the blue-chip engineers BTR and Siebe that formed Invensys has been little short of a disaster. Even talk of a bid from the German giant Siemens, using the proceeds from its sale of stock in its one-time subsidiary Infineon, did little to boost Invensys, even though 176 million shares changing hands. Most traders pointed the finger at hedge funds buying the stock. Invensys gained 1.25p to 21.25p.

Max Petroleum was 3p better at 110p as traders said its stock has been oversold since a downbeat note last month from Canaccord Adams. One trader said: "This one looks good from a chart point of view, and there has been lots of good news from the smaller oil exploration and production sector."

Elsewhere among exploration and production minnows, there was good news for Northern Petroleum which said further tests on its Dutch wells have revealed significantly larger finds of oil and gas. It added that proven and probable oil reserves rose45 per cent, while gas reserves increased 329 per cent. The good news sent Northern shares into orbit, rising 46.5p, or 49.2 per cent, to 141p.

The stand-out performer among smaller stocks was the AIM-listed Crystalband. Shares in the maker of PVC window frames, doors and conservatories jumped 4.25p to 7p, but market makers were at a loss to explain the gain.

Aurora Russia enjoyed a decent first day of trading on AIM. The company raised £75m to invest in Russian mid-market companies, and traders expect good returns from Aurora because of its strong management, which includes James Cook, a former chairman of GE Commercial Finance in Russia, and John McRoberts, a former head of Deloitte's Russian corporate finance practice. Aurora shares closed at 105p, having been placed in the market at 100p.

Finally, traders expect brisk business in O Twelve Estates, a property company coming to the market on Monday. Shares in the group, formed to redevelop sites in the East End of London with one eye on the 2012 Olympic Games, was six times oversubscribed.

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