Market Report: Argos hot seat could be beckoning again for Rose
Could Sir Stuart Rose make a return to Argos? That was the tale being put forward by City gossips yesterday, as vague speculation suggested the former Marks & Spencer boss could be part of a possible private equity approach for Home Retail. The Homebase-owner has been the subject of persistent bid talk recently, with some in the Square Mile believing a predator may be tempted by the fact its share price has dropped more than 60 per cent since February.
The latest revival of the rumours claimed a private equity consortium could be considering making an offer worth between 160p and 180p a share with the aim of installing a new management team potentially led by Sir Stuart.
As well as previously heading up both the Top Shop-owner Arcadia and Marks & Spencer, Sir Stuart is already familiar with Argos, having been chief executive of the catalogue chain in the late 1990s for a short period. One of his current roles is sitting on the advisory board of private equity firm Bridgepoint, whose retail investments include clothing group Fat Face and sandwich chain Pret a Manger.
Analysts were treating the vague gossip – which also suggested, once again, that Asda-owner Walmart may be interested – with a heavy pinch of salt. One questioned whether Sir Stuart would be attracted to the job, while another said any potential private equity bidder would want to wait and see how the company performs over the key Christmas period.
Home Retail touched a high during trading of 91.75p, before closing 0.8p ahead at 90.4p. It means the retailer has now added nearly 25 per cent in the last six sessions after having fallen to an all-time low of 72.45p.
Despite spending a lot of the day ahead, the FTSE 100 finished 16.08 points in the red at 5,489.34, failing to capitalise on Wednesday's rally of more than 3 per cent which was prompted by the central banks' attempts to boost liquidity.
Many of the heavyweight miners were struggling to keep hold of their recent gains following poor manufacturing figures emerging from China overnight. Vedanta Resources eased back 8p to 1,054p after Credit Suisse downgraded its rating to "neutral", as the broker's analysts said they saw "better risk reward elsewhere".
Lowering their earnings estimates across the sector, they instead named Xstrata (down 9p to 1,008p), Glencore (down 6.25p to 392.25p) and Rio Tinto (down 35p to 3,304p) as their favourites.
Burberry continued to rise as Seymour Pierce's Kate Calvert kept her "buy" recommendation. The upmarket brand climbed 38p to 1,308p despite its peer Coach – the luxury handbag maker favoured by Gwyneth Paltrow – sliding on its first day of trading in Hong Kong.
The Bank of England's insistence that the banks increase their capital buffer left many in the sector weaker, with Lloyds slipping back 39p to 759p. Royal Bank of Scotland retreated 0.44p to 20.55p even though Evolution Securities' Ian Gordon reiterated his "buy" advice, claiming there was "overwhelming, absolute and relative evidence" that it would not need to raise capital.
BP was pegged back 6.4p to 454.35p after announcing the sale of its Canadian natural gas liquids operations in a $1.67bn deal, the latest in a run of disposals to cover the costs of the Gulf of Mexico tragedy. The oil giant fell despite the revival of break-up talk, as Investec speculated its refining and marketing division could become a "disposal or demerger candidate".
Rumours of a potential bid in the pipeline pushed Diploma towards the top of the FTSE 250, and although the vague whispers failed to mention a name, the services provider still advanced 12p to 345.4p.
There have been a number of takeovers among the capital goods companies recently, which prompted the scribblers at Credit Suisse to try to work out who could be next to receive an approach.
Estimating the sector's big names could have roughly $130bn with which to play with, the analysts chose six names as possible targets, including Spectris and Rotork, although they were pegged 11p to 1,241p and 12p to 1,796p respectively.
A warning that it was on track to miss expectations thanks in part to car crash numbers falling left Ai Claims in the red, as the accident management firm dropped 2.25p to 21.25p on the Alternative Investment Market.
Meanwhile, drinks group Global Brands' announcement that it hopes to delist its shares in an attempt to save cash prompted punters to jump ship, leaving it 64.44 per cent weaker at 0.4p.
There was some rare good news for tiddler Hot Tuna as the beleaguered surf wear company revealed a distribution deal for Australia and New Zealand, soaring 40 per cent to 0.05p as a result.
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