Market Report: Suspicion of a counter-bid fuels Lasmo performance

THE suspicion that a counter-bidder is preparing to barge into the battle for control of the Lasmo oil group is enthralling the market.

In an oil sector already excited by the increase in the crude price, Lasmo shares put on an intriguing performance.

The bidder, Enterprise Oil, helped along by bullish comments from securities house Credit Lyonnais Laing, was also strong.

But many observers believe Lasmo's sudden display of strength had only a remote link with the Enterprise advance. A sudden surge of buying, partly for the new account, sent the shares 8p higher to 149p.

Enterprise improved 16.5p to 414.5p. This week, Enterprise increased its offer.

Its failure to put any cash on the table and its far from generous paper terms left many with the impression it had little confidence in its own bid strategy.

From the start of hostilities, when it appeared that the upsurge in Lasmo shares forced Enterprise into a reluctant admission it was looking at its oil rival, its conduct has seemed to lack conviction.

With Lasmo still below the Enterprise bid terms and looking likely to retain its independence, it may not welcome an interloper. But any intruder would test Enterprise's determination and allow it to revise its offer and produce a cash element.

Enterprise's difficulty is it cannot be seen to pay too much. If its bid is regarded as over-generous it could be self-defeating, damaging its own shares.

There have been suggestions it has had to work hard convincing its main institutional shareholders that its offer for Lasmo is justified.

The surging oil price is distorting the bid scene. Lasmo is a significant beneficiary of the higher crude prices.

It is likely that a US crude level nudging dollars 20 a barrel has encouraged an American group to look much more closely at the beleaguered British oil explorer. Atlantic Richfield remains the favoured US candidate.

Strengthening crude prices reflect the unease over the Korean situation and Opec's decision not to lift output.

British Petroleum rose another 3p to 411.5p, but Shell weakened 8.5p to 705.5p.

The rest of the market failed to hold an advance as New York struggled in early trading. The Bank of England's pounds 2bn gilt auction also depressed sentiment as the issue of a floating loan rate was seen as an admission of the fund- raising difficulties the Bank faces. Gilts made modest headway.

The feared option expiry turned out to be a non-event although helping turnover as final positions were covered.

After gaining 19.6 points in early trading the FT-SE 100 index ended 7.2 lower at 3,022.9.

Eurotunnel had another tough session as worries multiplied about the take-up of its controversial rights issue. The shares fell 15p to 288p and the nil-paid rights 10p to 13p.

Lucas Industries was another in the doldrums. The visits this week of analysts and fund managers to its new brake factory at Bouzonville, France, have put the shares into reverse. They started the week at 186p and closed 3p down at 175p. Societe Generale Strauss Turnbull was prompted to cut profit forecasts from pounds 70m to pounds 50m and pounds 115m to pounds 100m.

The impression that further developments are afoot in the insurance sector continued to sway sentiment. TransAtlantic was again strong, up a further 9p to 384p. The group is believed to be seeking a US acquisition.

Supermarkets found support with J Sainsbury, still enjoying Goldman Sachs backing ahead of a US investment roadshow, gaining 13.5p to 416.5p. Tesco advanced 5.5p to 229.5p.

Bowater, the paper and packaging group with a US visit set for next week, gained 5p to 459p.

Courtaulds, the chemical group, drew Smith New Court backing, although the shares failed to stir from their 504p level. The securities house is looking for 20 per cent profit growth in each of the next two years.

BTR, a Kleinwort Benson buy, gained 4p to 366p, and Caradon, the bulding materials group, dipped 11p to 300p on, it was said, a million-share overhang.

The engineer Norman Hay gained 5p to 43p following the pounds 6m sale of its 7.2-acre site near Heathrow.

International Business Communications achieved the rare feat of a bullish Friday trading statement. The shares rose 10p to 191p on a forecast that half-year profits were likely to show a 'significant advance' over last year's pounds 1.37m.

Clarke Nicholls & Coombs, a sweet maker that ventured into property, held at 9p. There is talk of a big share stake changing hands. David Kirch, the Channel Islands entrepreneur, is a big shareholder, pumping properties into the group last year.

John Mansfield, a timber group, is coming to the stock market. It will be one of the smallest full market new issues with a capitalisation of only pounds 2.5m. Stockbroker Ellis & Partners is placing shares to pay debts and for acquisitions. Based at Uttoxeter, Mansfield has five activities including supplying materials for film and TV productions. It has depots at Pinewood and Shepperton studios.

Ugland International, the shipping group born out of Bristol Channel Ship Repairers, is expected to swing into the black this year. Kleinwort Benson is looking for profits of pounds 2.5m against a pounds 1.2m loss. The group, where the Norwegian Andreas Ugland operation has 29.7 per cent, has just splashed out pounds 7.6m on two ships. More acquisitions are expected. It made a pounds 19m rights issue last year.

Shares remained dull, with one of the last accounts ending with the FT-SE 100 index down 7.2 points to 3,022.9 and the FT-SE 250 index off 7.1 at 3,527.1. Turnover was 736.8 million shares with 31,307 bargains. Settlement is due on 27 June.

(Graph omitted)

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor