Bid rumours swirled around Regent Inns yesterday and as investors piled aboard the pubs operator its shares roared to fresh highs. According to the gossip, Robert Tchenguiz, the millionaire investor, is considering a 95p-a-share offer for the owner of the Walkabout chain. He is believed to already have a 14 per cent stake in Regent and recently acquired 160 high street pubs from the Hogshead owner Laurel for £150m.
However, analysts believe Mr Tchenguiz will struggle to win Regent if he offers just 95p a share. Altium Securities said: "We suspect that 2005 will see a continuation of corporate activity in the high street pubs sector and competition for assets should see any take-out price for Regent move north of 100p a share." Regent Inns shares moved up 3p to 81.5p yesterday.
After coming close to collapse in the autumn of last year, Regent has enjoyed a swift renaissance under the leadership of Bob Ivell, formerly the head of Scottish & Newcastle's pubs division. Most importantly he managed to negotiate new banking facilities with the group's lenders, which were unveiled last month. Since then, Altium believes business at Regent has marginally improved and the broker is particularly encouraged by suggestions that the group has made good progress on reducing costs by substantially downsizing the number of employees at its head office.
Meanwhile, the FTSE 100 gained 20.5 points to 4,820.8, with the mining sector enjoying a particularly strong session. BHP Billiton rose 22.5p to 625.5p, Anglo American added 21p to 1,239p, Rio Tinto jumped 35p to 1,550p and Xstrata improved 16p to 886p.
Lonmin, down 0.5p to 952.5p, missed out on the rally after bearish comments from Deutsche Bank. Telling investors to sell the stock, the broker argued the strengthening South African rand is wreaking havoc with profit margins at the group. As a result, Deutsche slashed its earnings forecasts for Lonmin and set a price target of just 800p on the stock. Shire Pharmaceuticals was pushed 10p higher to 616p by a note from Credit Suisse First Boston. Upgrading its recommendation to "outperform" from "neutral", the broker applauded the performance of Matt Emmens over the past year and a half as he has streamlined the business. CSFB told its clients to expect acquisitions from Shire in the coming months and set a 700p price target on the stock.
Cable & Wireless finished the day as the worst performer in the blue-chip index, falling 3p to 114.75p. The telecoms group is due to issue a third trading statement on 25 January and most investors expect it to be a lacklustre affair. C&W's operations in the UK are unlikely to have experienced any kind of a pick-up in trading, given the ever-growing competition among fixed-line carriers, while its Caribbean businesses will have been undermined by the weakness of the dollar, the liberalisation of the telecoms industry in the region and growing mobile phone use. The update from C&W will also give investors initial estimates of the impact of the tsunami disaster on its operations in the Maldives, although, within the context of the group as a whole, this will not have a major impact on the company's financials.
ITV saw another day of heavy trading in its shares, which closed 3.5p higher at 115p. Traders remain convinced that the broadcaster is in the sights of the US buyout giant Kohlberg Kravis Roberts after it appointed Lord Hollick, the former chief executive of United Business Media, as a managing director earlier this week. Mersey Docks added 22.5p to 960.5p on talk that a formal bid for the company may finally emerge next week. In November, the docks operator confirmed it had received a takeover offer from a private equity house.
Hit Entertainment, which owns the rights to children's characters such as Bob the Builder, gave up 8.25p to 251.5p as Dresdner Kleinwort Wasserstein fretted the group may have had a tough time over Christmas. The German broker cut its rating on Hit to "hold" from "add", having been unnerved by evidence of weak toy and video sales at Woolworths and Argos. Dresdner is also concerned about the group's performance in the US where it fears retail sales are waning.
Among small-caps, Edinburgh Oil & Gas firmed 5p to 197.5p on hopes of a positive drilling update from its Buzzard field in the near future, while NetStore rose 2.75p to 40.5p on whispers of improving sales. Scotty added 0.13p to 3.62p after a large seller was finally cleared from the market by brokers.
Vislink, the broadcasting services specialist, added 3.04p to 27.25p after unveiling the acquisition of Link Research for £10m. Link provides digital wireless camera systems for broadcasters and Vislink will part-fund the deal via an equity issue at 22.75p.Reuse content