Market Report: City pulses set racing by speculation two dead-in-the-water deals could be back on
Friday 22 August 2014
Traders and M&A bankers can be a hopeful lot sometimes. Yesterday City pulses were set racing by speculation that two dead-in-the-water deals could be back on: a takeover of AstraZeneca by Pfizer and a swoop for Vodafone from AT&T.
Astra rose to the top of the blue-chip index amid reports that the UK drug giant is still Pfizer’s preferred target for a “tax inversion” scheme despite the collapse of talks in May. Under takeover rules, the US company is now in a six-month cooling-off period, ending in November. But the rules also permit talks to restart next week if Astra invites Pfizer back to the negotiating table or, more likely, Pfizer goes for one final, all-or-nothing, knock-out offer. Astra added 126.5p to 4,411.5p.
There was also chatter in darker corners of the market about AT&T making a play for Vodafone. The US telecoms giant was forced to deny it was knocking up a bid in January, putting it on the sidelines for six months. That bid ban ended in July and some speculators are hoping Vodafone’s share price fall since then could tempt AT&T to make an offer. Vodafone added 1.45p to 202.6p.
The FTSE 100 carved out small gains, up 22.18 points at 6,777.66 thanks to the relative absence of negative news. However, as gold and silver prices continued to fall following signals from the US Federal Reserve that it is leaning towards interest rate rises, producers of the precious metal suffered. Fresnillo lost 34.5p to 938p while Randgold Resources was 93p worse off at 4,904p.
Gulf Keystone Petroleum continued its strong run, up 6.25p to 85p. The current rally was sparked by reports that the Iraqi-Kurdish oil pipeline is set to double capacity, but the shares have also been helped by rumours that a US major may be interested in its crown jewel, the Shaikan field in Kurdistan.
Tangent Communications tumbled 1.75p to 7.5p on AIM after the online printing and digital marketing company warned that profits for the year are set to be flat.
The struggling supplies business Office2Office called for shareholders to accept a 51p-a-share offer from the private equity firm Endless. Office2Office closed up 20.62p at 48.25p.
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