Market Report: Buying Beam was likely not on the to-do list. Now it should be
Wednesday 15 January 2014
Following a run of M&A activity, booze experts yesterday declared drinks giant Diageo is ready to pour itself into the mix for US spirits group Beam.
On Monday Japan's Suntory Holdings said it planned to buy Beam for $13.6bn (£8.3bn). The deal, to be approved by the summer, will make the Japanese company the world's third-largest spirits maker.
But Liberum Capital's Pablo Zuanic bet Guinness owner Diageo will make a bid despite unanimous approval by both companies' boards. Mr Zuanic said: "We think a Diageo-led consortium bid is quite possible."
But it conceded: "Buying Beam at this point was likely not in new chief executive Ivan Menezes' to-do list. Now it should be."
Mr Zuanic expected Diageo will to want to split up the brands and keep some of its bourbon and tequila products.
Traders seemed only slightly convinced by Mr Zuanic's reasoning and Diageo fizzed up 7.5p to 2,003.5p.
After a tumble during morning trade the FTSE 100 recovered and closed ahead 9.71 points at 6,766.86.
Top of the table was BSkyB after renewed takeover chat. Media mogul Rupert Murdoch walked away from an £8bn bid in 2011 but experts at UBS declared Mr Murdoch's "Fox could revisit a takeover of BSkyB… or [BSkyB] could seek to merge with a mobile operator".
UBS said growth opportunities such as new initiatives including NowTV, Entertainment Extra+ make it attractive. UBS, which advises BSkyB, raised its rating of BSkyB to buy and added it to its European Key Call List. The City agreed and it broadcast a 31.5p rise to 871p.
Standards-testing group Intertek fell 76p to 2,993p as analysts at Natixis cut their rating to reduce.
On the mid-tier table, construction group Balfour Beatty gave an update in line with expectations but the City's relief pushed it up 4.5p to 294.5p.
Fund manager Ashmore tumbled 50.8p to 358p after it revealed a large outflow of funds with clients pulling from emerging markets.
AIM-listed Volga Gas surged 7.75p to 109.75p on a 46 per cent production rise.
- 1 Man on naked bike ride gets ejected after becoming aroused
- 2 Fifa corruption: Europe plots to stage an 'alternative World Cup' in place of Russia 2018
- 3 How much sex should I be having?
- 4 Jaden Smith wears gender fluid dress to high school prom with Hunger Games actress
- 5 Live football streaming sites Rojadirecta, LiveTV and Drakulastream all completely banned from UK browsers
Caitlyn Jenner, formerly Bruce Jenner, reveals new look on Vanity Fair cover
Russian military jets and US destroyer clash in Black Sea 'posing danger to stability'
Ed Miliband returns to the backbenches but it's all a bit awkward as he tries to avoid eye-contact with fellow Labour MPs
Photographer who performed naked shoot in China's Forbidden City sparks outrage
Man on naked bike ride gets ejected after becoming aroused
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Why this year's general election was the most unfair in Britain's history
iJobs Money & Business
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...