At last some bid talk emerged, after a lean summer for the gossips. Energy services company Wood Group rose 14.25p at 375.75p after speculation it had become the focus of a potential bid by Amec. The services and engineering group, which has its numbers out on Thursday, was up 6p at 658.5p.
The rumours emerged after Sondex revealed it had agreed to recommend a bid by General Electric worth £262.7m. The oil and gas services group rose 31p to 453.5p, and sparked talk of further consolidation in the market.
Top performer of the day was Barclays as it sought to ease fears over its exposure to the credit crisis. After a week of losses, investors piled back saying the stock was oversold. Dresdner Kleinwort helped bolster the rally, saying it was a good trading opportunity. The German broker expects a charm offensive this month. Analyst James Invine said: "Barclays may know that ABN is now a long-shot, but we think that it is such a desired prize that management will strain every sinew," The stock closed up 3.99 per cent at 638p.
Eyes will be on Northern Rock, this month as it plans to launch a securitisation towards the end of September – the first big financing attempt since the market hit the buffers. Dresdner said signs would not be good for the sector if the issue is pulled. Northern closed up 5p at 741p.
Standard Life performed strongly, up 1.25 per cent to 304p, with buyers anticipating strong interim results today. The insurer had a good write up from the analysts last week, saying it was in a solid position to capitalise on the trend towards unbundled insurance services.
London was relatively quiet, what with the Americans putting their feet up for Labor Day. Volumes were light as the FTSE 100 meandered to close 11.9 points higher at 6315.2. The miners once more did their bid, after support from Goldman Sachs.
The US powerhouse broker increased its forecasts on commodity prices. It said the best opportunities were groups with exposure for copper and zinc, and added Xstrata to its "conviction buy" list, and upgraded Lonmin as a result. Xstrata closed up 48p at 2953, while Lonmin was up 40p at 3151p. Traders were talking up the possibility of a new round of consolidation in the sector. One said the big players would turn their backs on mega-mergers to plunder the middle tier. He said potential targets could include First Quantum Minerals and International Ferro Metals,which moved up to the main market last week.
Elsewhere on the mid tier, Carphone Warehouse was the focus of a fair bit of talk. Gossips said US retailer Best Buy was primed to take a stake. One trader said the 16.5p rise was caused by a bear squeeze in the stock. Apparently a couple of professionals with big positions had been trying to close out on Friday.
It was a day for first half results, and traders were in general happy with the numbers. Regis, Lookers and Rank all impressed, although a bout of profit taking drove Intertek Group lower.
Outside the FTSE 350, the worst performer was Aquilo, whose troubles continue to pile up. The insurance group's latest piece of bad news came as it was forced to call in KPMG to wind up its IT Solutions division. A potential suitor walked away from bid talks for the unit last month, and it can no longer continue trading. The company, worth about 70p per share after a restructuring in January, has continued to spiral, yesterday shedding a quarter of its value to close at 3p. Last month, the group announced it was pushing forward with plans to delist the whole company, as the benefits no longer outweigh the costs.
Technical problems took the wind out of the sails at Clipper Windpower, which lost 63p in early morning trading. The company said it had found a deficiency that has slowed the shipment of its turbines and admitted the problem could cost $15m to fix over the next year. The stock firmed up at the close to end the day 24p lower at 531.5p.
Cardinal Resources, the Ukraine oil and gas exploration company, was the strongest growth performer after admitting it was in takeover talks. The announcement saw the stock closed up 42.47 per cent at 13p.
Engineering and environmental consultancy Waterman was also buoyed after an acquisition. It bought Furness Green, which provides mechanical and electrical design services, for up to £1.2m. Evolution Securities said it was "another value-enhancing deal which makes the shares' underperformance look inexplicable".
Top in early morning trading was Messaging International. The IT group rose more than a third after selling rights to some of its intellectual property to a "US-based invention company" for some $700,000 (£346,000). It eased towards the end of the day to close up 21.88 per cent at 0.97.Reuse content