Market Report: Bid talk casts Shire as buyer, not target


Traders have named the pharmaceuticals group Shire as a takeover target more times than they have taken paracetamol, but yesterday the City was overdosing on rumours that Shire was lining up a takeover of a US drug group.

Rumours circulated that Shire was interested in the US rare diseases group ViroPharma. Viro is said to have hired Goldman Sachs to run a sales process and Shire, alongside Sanofi and others, is eyeing the $3bn (£2bn) group.

Analysts at Deutsche Bank think a move by Shire would be good for shareholders and said: “Whether or not Shire has actually approached ViroPharma is unknown at this point. However, a combination of the two companies makes both strategic and financial sense, in our view.”

The wider market agreed and Shire was 56p better at 2,533p.

Staying with pharmaceuticals, GlaxoSmithKline won a priority review from US regulators for its combination treatment for malignant melanoma, but ended the day 8p worse off at 1,614p.

The wider market was in a good mood despite a chilly autumn day, and news from the US that former Treasury Secretary Larry Summers had pulled out of the race to replace Ben Bernanke as chairman of the US Federal Reserve was viewed as good for the markets. Mr Summers’ exit leaves Fed vice-chair Janet Yellen as front-runner to take the top job, and analysts feel Ms Yellen is less likely to taper off the Fed’s programme of fiscal stimulus, which has been boosting markets worldwide.

The receding spectre of military action in Syria also helped keep the mood broadly optimistic.

The FTSE 100 was 39.06 points better at 6,622.86.

Airlines were gainers as oil prices fell in response to the Syrian situation. British Airways and Iberia owner IAG added 10.3p to 325p. EasyJet put on 31p to 1,331p. On the small-cap index, Flybe chief executive Saad Hammad has begun organising the internal structure at the business to save costs, but the shares were unmoved at 89p.

Results for miners were mixed as better gold and metal prices helped sentiment. The Chilean copper miner Antofagasta was top of the table, up 33.5p to 883p. But the Mexican metals miner Fresnillo slumped 153p to 1,045p and was buried at the bottom of the blue-chip index.

The former Rio Tinto chief executive Tom Albanese has returned to the mining industry and is joining Vedanta Resources in an advisory role that will see him be “actively involved in developing the company’s strategy, policies and growth objectives”. Vedanta ticked up 23p to 1,183p.

The mid-tier media and events company UBM slipped 9.5p to 737p after the surprise announcement that its chief executive David Levin would be leaving next year.

The troubled coal miner Bumi, which plans to split with the Indonesian Bakrie family that co-founded the company, said its separation should be completed by November. The group which was put together by City financier Nat Rothschild was 4.9p better at 209.4p.

Analysts at Canaccord Genuity thought Petra Diamonds was a sparkler. Despite strikes at its mines in South Africa, the precious stones miner’s full-year results were in line with expectations and Canaccord maintained its buy rating. But investors didn’t agree and it lost 3.4p to 117.4p.

The AIM-listed Noricum Gold, the Austrian-focused gold exploration and development company, announced it had struck high-grade gold and silver during the initial drill at its 100 per cent owned Rotgulden project and it was 0.075p brighter at 1.15p.

Potash specialist Sirius Minerals said it has altered its strategy to get approval for its flagship project in the North York Moors and it tumbled 2.43p to 9.82p.

There was better news at oil and gas explorer San Leon Energy, which unveiled positive drilling updates in Poland’s northern Baltic basin and it pushed ahead 0.2p to 5.45p.

Premier African Minerals surged 0.7p to 1.75p when it issued an upgrade to its recent preliminary economic assessment and mining study. It said it was in discussions with potential funders for its flagship RHA tungsten project in Zimbabwe.

Rialto Energy agreed a deal with Ivory Coast’s energy ministry to replace its existing contract for a block at one of its sites, and it was 0.205p better at 1.725p.


Snap up shares in EKF Diagnostics Holdings, Canaccord Genuity suggests. The broker says the healthcare testing group has moved from an “acquisition-focused vehicle” to a broad-based diagnostics business with a “portfolio of rapidly growing products”. So Canaccord rates it a buy with a 42p price target for shares that are at 28.5p.


Flog shares in Reckitt Benckiser, Liberum Capital advises. The broker thinks its “below-average exposure to emerging markets”, the fact that it is “undergoing a shift in strategy” and volatility in its healthcare unit are reasons to sell. Liberum gave it a 3,700p price target for shares that are around 4,548p.


Hang on to shares in Paragon Group, Peel Hunt recommends.  The broker reckons its £273m securitisation that was launched last week “re-iterates the continued momentum in the underlying business”. But for now Peel rates it just a hold with a 339p price target for shares trading at 91.5p.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

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

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot