Market Report: Aviva jumps on talk of three potential bidders

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The gossip doing the rounds across the City yesterday was looking rather well-worn, with Aviva just one of a number of names once again said to be in the sights of a predator. A month after the rumour mill last focused on the insurer, this time the revived speculation suggested there could be not one but three possible bidders.

Unsurprisingly, the Swiss giant Zurich Financial – often linked with Aviva – was among the potential aggressors mentioned in the vague mutterings, while there were also claims a Chinese sovereign wealth fund could be interested as well as an unnamed Asian insurance company.

A late spurt helped Aviva to jump up 4.3p to 302.8p, despite dealers – used to the group being touted as a possible target – failing to be moved by the whispers.

They were similarly blasé over reheated bid speculation around ITV which suggested it could be attracting interest from private equity, as the X Factor broadcaster, buoyed earlier in the week by optimistic comments from UBS over advertising revenues, was lifted 1.7p to 63.5p.

Both the energy services provider Wood Group and engineer IMI were also seeing revived bid talk (albeit with few details) as they ticked up 14p to 627p and 14.5p to 762.5p respectively, while elsewhere GKN climbed 7.4p to 184.5p following reports of possible interest from Singapore's Quest Global Engineering.

A session in which the FTSE 100 slipped in and out of the red ended with the benchmark index 24.24 points better off at 5,337. Neither Chancellor George Osborne's Autumn Statement, nor a cut in the Office for Budget Responsibility's UK growth forecast, was particularly shocking and Wall Street started the day strongly after positive consumer-confidence data from the States.

Traders would have been forgiven for cursing the ratings agencies as Fitch warned over the USA's triple-A rating while reports claimed Standard & Poor's may be about to cut its outlook on France, which would put the country at risk of a downgrade.

Meanwhile, the banking sector was not exactly helped by the statement by Moody's that it could cut its ratings on 87 banks across the eurozone. With Mr Osborne announcing a raise in the levy on bank borrowing, Lloyds ended up with the wooden spoon after being pegged back 0.5p to 23.18p and Royal Bank of Scotland finished 0.22p behind at 19.52p.

"Get over it," was the message to punters in G4S from HSBC, which upgraded its advice on the stock to "overweight". Investors have been down on the security group since it announced its ill-fated £5.2bn acquisition of Denmark's ISS in October, and its share price has lost more than 10 per cent since then, despite scrapping the deal just a few weeks later.

Yet analysts from the broker said that although the bid has created "a degree of disillusionment... management has been and remains pivotal to G4S's operational strength", and the supportive words helped the company to advance 7.6p to 246.8p.

Footballers may not be looking forward to playing in a country where temperatures can reach 50C, but – according to Panmure Gordon – the support-services sector should be cheering the fact that the 2022 World Cup is being held in Qatar. The broker said recent infrastructure contracts from the Arab state were showing "the potential for the companies involved to play a far larger role in what will be an important market".

Panmure went on to highlight a number of groups that could particularly benefit, including Carillion (3.3p ahead at 298.7p) and Balfour Beatty (10.8p ahead at 240.7p), with the latter revealing yesterday it has won a £65m deal for work on Doha's road and drains.

The top performer on the FTSE 250 was EnQuest, which powered up 11.54 per cent to 101.5p after the North Sea oil group boasted that by 2014 it will have doubled its production to more than 40,000 barrels a day.

Back on the top-tier index, International Airlines Group initially fell in the wake of the news that American Airlines' parent company, AMR, had filed for bankruptcy in the States. Yet the British Airways owner ended up easing up 0.6p to 145.2p after claiming its joint venture with the US airline would not be affected.

Its admission that it was not taking part in the current North Falklands Basin drilling programme partly because it was unable to raise funding saw Argos Resources slump 37.35 per cent to 11.12p on the Alternative Investment Market. The energy explorer also blamed limited availability of the rig being used, while adding that it hoped to attract a farm-in partner by the end of the next year.

Elsewhere, Character Group slipped back 7.5p to 150p as the toy company – which makes products for a number of television series including Peppa Pig – slashed its sales expectations ahead of Christmas.

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