Market Report: Premier energised by renewed Dubai bid talk

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The Independent Online

It has been just over six months since Premier Oil's name cropped up in takeover whispers, but the word doing the rounds yesterday was that Dubai Energy is considering an offer for the company.

Premier first disclosed it was in takeover talks in October, and although its suitor was never officially revealed the name most commonly linked to the talks was Dubai Energy. Since the offer talks were terminated, shares in Premier have fallen by more than 25 per cent. Despite an official denial from the company, the market seems convinced something is going on, although one trader pointed out the chat was bound to be revived once the six-month bidding ban passed. Premier closed 31p better at 1,074p as Credit Suisse also told clients that the stock is a "trading buy".

A major investor in the mining giant Anglo American decided to book some profits as Morgan Stanley began a placing of 6.2 million shares through an accelerated book-build. By the close, more than 18 million had been traded, but the bullish overall market mood meant shares in Anglo American still managed to close better, up 16p at 3,055p, and traders said demand for the placing comfortably outstripped supply.

Elsewhere in the blue chips, International Power was well bid on the back of rumours that Electricité de France is considering a bid that could value the shares at up to 600p. Volume was decent as more than 20 million shares changed hands, but by the close of business there was little evidence of the rumours being taken seriously as the stock closed 6.75p better at 435.25p.

The private equity story for Morrisons Supermarkets seems to have been around since the days of Methuselah, but the Swiss broker UBS gave it another airing yesterday. It told clients it believes Morrison's property portfolio could be worth 292p per share, meaning the rest of the business is being valued by the market at almost zero. The broker reiterated its "buy" recommendation, setting a target price of 360p per share. The stock firmed 3p to 300.75p.

London traders were in bullish mood from the word go, following Wall Street's excellent overnight performance and better than expected retail sales figures. Bradford & Bingley led the blue chips higher after a Credit Suisse upgrade which helped the stock to climb 23.25p to 423p. Mining and natural resources stocks were also in demand as the FTSE 100 closed the session 90.3 higher at 6,649.9, with only six stocks closing in negative territory.

MyTravel's merger with Thomas Cook should go through next week and the company will join the Morgan Stanley Capital Indices global index - one that is tracked by many major global funds. That should give the shares a meaningful boost on its own - traders believe few non-UK funds are up to weight in the stock, meaning that there could be a significant short-term supply issue. Traders know demand for the stock is likely to surge, and bid the shares 13p better to 316p.

The oil exploration and production group Soco International hit an all-time high after confirming it expects to see the first production from its Vietnamese wells in the first half of 2008. The stock has been the outstanding performer in the mid-market oils against a sector that has been decidedly sluggish in the past 12 months. The broker UBS upped its target for Soco to 2,100p as the stock climbed 67p to 1,872p.

Down in the small caps, AT Communications got a boost as Ian Crawley, a former corporate financier at Shell International, joined the company as finance director and promptly bought 1.5 million shares at 38p per share. The appointment came with a bullish statement from the chief executive Alex Tupman who told investors the company is poised for growth. The shares rallied 6p to 44p.

Small-cap investors are banking on an all-out bidding war between Sir Tom Hunter's West Coast Capital and the retail behemoth Tesco over Dobbies Garden Centres, following a dawn raid that saw West Coast double its stake in the group. Dobbies agreed to a 1,500p-per-share bid from Tesco on Friday, but it now looks like West Coast will up the ante. It paid 1,750p for the extra stake, taking its holding in Dobbies to 20.6 per cent. The shares rose 260p to 1,785p.

MAXjet Airways completed one of the largest fund raisings on AIM so far this year after the broker Panmure Gordon placed its shares. The low-cost transatlantic business-only airline raised £47.3m of new capital at 138p per share, valuing the company at admission at £96.1m. Despite an early rally, the stock closed the session a slightly pedestrian 2p better at 140p.