The Week Ahead: Battle begins for mother of all wharfs

Click to follow
The Independent Online

Plenty will be happening on this side of the Atlantic to keep the markets busy, although investors will be keeping an eye on the US reporting season.

The auction for Canary Wharf, the property company, is expected to proceed at last. A consortium backed by Morgan Stanley and Goldman Sachs is thought to be ready with an offer of 250p-275p per share, valuing it at around £1.5bn. We'll see what the other bidders - Branscan, the Canadian group, and Paul Reichmann, the company's chairman - have up their sleeves.

Tottenham Hotspur is expected to report results, but the focus will be on the club's fundraising efforts. Enic, the sports and media business which owns 29.9 per cent of Spurs, is understood to be supportive of a £10m rights issue.

Debenhams, the department store operator, is expected to announce good results after an upbeat trading statement last month. But investors will be distracted by the continuing bid battle. Permira, a venture capital group, offered 425p per share for the company in May, valuing it at £1.52bn. But this was scuppered by CVC and Texas Pacific, which raised the offer to 455p per share or £1.62bn. However, Permira is likely to come back. It is understood that the private equity firm has a £3.5bn war chest to fund the takeover of Debenhams and fellow retailer New Look.

Both deals could be announced as early as next week. Tom Singh, the founder of New Look, the value-for-money clothing chain, approached the company with a view to taking it over in September. He already has a 28 per cent stake in the business and is thought to have offered 330p per share, with backing from Permira. The bid values the company at £662m, but this has been rejected by the board.

Results from WH Smith, the books and stationery store, will be poor. In August, the company warned that profits would suffer because of the war in Iraq, the Sars virus, the unusually hot summer and price-cutting by its rivals. The sale of its loss-making US operations was applauded by the market, but the company has a lot to do. Investors are eagerly awaiting the arrival of Kate Swann, the former managing director of catalogue retailer Argos, who starts as chief executive in November.

GUS, the owner of Argos and Homebase, the DIY chain which Ms Swann also used to run, is expected to report solid trading as the nation stocked up on barbecue gear. Encouraging news is also likely from Burberry, the check prints group, which is 77 per cent owned by GUS. Burberry is expected to deliver good growth, driven by new stores in Europe, the US and Asia.

Also in retail, results are due from Body Shop, the cosmetics store, and N Brown, the home shopping group. Neither is likely to be exciting. Expect continued progress at Reckitt Benckiser, the household products giant. The company, which owns brands such as Dettol and Harpic, aims to increase sales by 4 to 6 per cent and profits by 14 per cent. Investors will be looking for confirmation that it is on track to meet its targets. Europe and Asia should show strong growth, but any improvement in North America is likely to be offset by the recent weakness in the US dollar.

It's been a difficult year for the life insurers Legal & General and Prudential as the uncertainty in financial markets dampened demand for savings products. But investors are hoping that the new business figures out this week will show that the worst is behind them.

Invensys, the industrial group, is expected to report tough trading. Harry Phillips of Williams de Broë said: "The environment has been pretty difficult. Competitors like Honeywell have been saying the same thing." Investors will also want to know how the disposal programme is proceeding. The company hopes to raise £1.8bn by selling businesses.

On the Continent, investors will focus on third-quarter results from Nokia, the world's biggest mobile phone maker. Some evidence suggests that mobile phone sales have been strong but we'll see if selling prices are holding up before the all-important Christmas period. There should be good news from Danone, the French food and drinks company. The heatwave in Europe will be a boost for the world's leading producer of bottled water with brands such as Evian and Volvic.

In the US, the reporting season continues with a number of high-profile companies announcing results. The market is expecting earnings figures from tech giants Intel and IBM, mobile phone maker Motorola, drinks company Coca-Cola and car maker General Motors.