Market Report: AZ spells more takeover excitement for gossips

It has been a busy week for the revival of takeover talk, and yesterday was no exception. Analysts and gossips alike were talking up the bid potential of various companies, with AZ Electronic Materials – whose chemicals are used by Apple in both the iPad and the iPhone – one of the stocks in the spotlight.

The specialist technology firm has been touted as a prospective target before, and yesterday Goldman Sachs decided to return to the idea. Saying that many companies in the chemicals sector are not only in possession of strong balance sheets but also have a desire to shift their portfolios downstream, the broker's scribes claimed that therefore AZ "will be viewed as a potential M&A candidate".

They also claimed that a "key overhang on the shares has been removed" in the wake of private-equity backers Carlyle Group and Vestar Capital Partners – who floated the firm back in 2010 – getting rid of their final stake earlier in the month.

As a result, AZ was added to Goldman Sachs' "conviction buy" list, trading as high as 305.3p in response, although by the bell it had moved back a bit, eventually closing 2.8p better off at 298.8p.

It was by no means the only stock getting M&A fans excited, however, as bid talk made a return around Kenmare Resources, lifting the Irish miner up 1.85p to 52.35p. After being linked with Rio Tinto (down 53p to 3,480p) earlier in the year, the latest revival of the rumours claimed another heavyweight miner BHP Billiton (down 22.5p to 1,541p) may also be interested in making a potential approach.

There was also vague speculation one of Kenmare's largest customers, chemicals giant DuPont, could be a possible bidder. However, many were treating the chatter with a lot of scepticism, having heard takeover speculation about Kenmare a number of times before.

Analysts from Berenberg were similarly downbeat on the oft-floated idea that Sage, which was knocked back 2.7p to 298.9p, could attract a suitor. Saying a takeover by Microsoft or Intuit (both of whom have featured in previous bid speculation) of the business software group would leave them with "numerous integration headaches and a culture clash", they added that while an approach from private equity was "a possibility... the valuation is currently too rich in our view for any significant take-out premium".

They also played down the takeover potential of Logica, warning that while the "most likely acquirers are the Indian IT companies... the probability is low", although this did not stop the group charging up 3.05p to 96.65p.

A late slump meant the FTSE 100 failed to gain for the sixth straight day. Early rises had many eyeing the 6,000 point level, but the index didn't hold on to its winnings, finishing 10.48 points down at 5,945.43.

The diggers were causing the main damage after comments from Chinese premier Wen Jiabao suggested an easing of the country's monetary policy was not going to happen any time soon.

In response, Kazakhmys took the wooden spoon after retreating 42.5p to 943.5p, while Vedanta Resources was driven back 39p to 1,391p.

The banks were on the rise, with Barclays and Royal Bank of Scotland climbing 9.25p to 248.8p and 0.8p to 26.56p respectively following the news late on Tuesday that many of their US peers had passed the Federal Reserve's stress tests.

In fact, the financial sector was dominating the Footsie's leaderboard, and Legal & General took the top spot by advancing 9p to 134.3p after announcing it was raising its dividend by more than a third.

Elsewhere, Vodafone retreated 4.1p to 166.65p following the news that the EU is looking into meetings between a number of Europe's largest telecoms groups.

The mobile phone giant was also knocked by Bernstein Research slashing its earnings forecasts, while Exane BNP Paribas reduced its rating on the company to "underperform".

Down on the FTSE 250, Home Retail was in fine form ahead of its trading update today. The Argos-owner received some rare support from analysts as JP Morgan Cazenove decided to raise its rating by two notches to "overweight", prompting a rise of 5p to 115p.

The scribblers were keen on the retailers as a whole, saying a "possible turning point [has been] reached", with Marks & Spencer and B&Q-owner Kingfisher – which pushed up 8.7p to 370.8p and 1p to 295p on the blue-chip index – coming in for particular praise.

Back on the mid-tier index, electronic parts distributor Premier Farnell reached a new, eight-month high, shifting up 13.4p to 228.8p in preparation for the release of its fourth-quarter results today.

UK Coal fell 27.97 per cent to 21.25p on the small-cap index after warning a restructuring plan could see its Daw Mill mine close and dilute investors' holdings.

Start your day with The Independent, sign up for daily news emails
  • 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

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss