Market Report: Competition fears force Aggreko to power down

Investors pulled the plug on Aggreko last night over fears its market leader status could be in jeopardy, leaving the temporary power supplier at the foot of the top-tier index.

The group, which will supply the electricity for next year's Olympics, moved 61p lower to 1,874p following the news that APR Energy – its closest competitor in the power generator market – is to be bought by Horizon Acquisition, the investment vehicle owned by Pizza Express co-founder Hugh Osmond.

The $855m (£527m) deal will see Horizon, whose shares were suspended at 950p, take APR's name when trading is resumed, expected to be by the end of September. It will also leave the company with $275m in cash to fund its expansion plans, prompting Numis Securities to cut its advice on Aggreko to "sell", warning the move may "herald a significant increase in competition".

"Although we believe there are sufficient growth opportunities for both groups," said the broker's analyst, Mike Murphy, "the hint of more competition as well as an alternative stock market play on the shortage of power in developing countries suggests there may be some profit-taking in Aggreko."

Overall, the FTSE 100 – which plummeted by more than 90 points on Friday – saw a small rebound of 7.66 points to close at 5,773.46, with continued caution over the global economic situation preventing a stronger bounce.

Takeover hopes fuelled the ascent of Eurasian Natural Resources (ENRC) to the top spot, as the miner shifted 34.5p to 776.5p following reports over the weekend that Glencore could be interested in making a potential offer worth £12 billion. Saying the commodities trader "will be keen to look at opportunities in the market for an acquisition", Guardian Stockbrokers' Atif Latif predicted that "merger and acquisition frenzy could return to the sector", and added ENRC's recent weakness meant Glencore may not be the only possible aggressor.

However, Collins Stewart said that "political ramifications make the deal unlikely", although the broker did concede an offer from Glencore for Kazakhmys' 26 per cent stake in ENRC was "more realistic".

The copper miner powered 26p to 1,235p as it agreed a $1.5bn loan from China which will be invested in its Aktogay deposit in Kazakhstan. Meanwhile, Glencore put on 14p to close at 523.4p, ahead of today's interim management statement, its first update since listing last month.

It may be good news for Spanish smokers, but the country's ongoing cigarette price war forced Imperial Tobacco to admit its full-year operating profit could be reduced by up to £110m as a result and the group shed 29p to 2,056p. Citigroup said a reversal of the price cuts would be unlikely, warning that "the pricing equilibrium [worldwide] has become more fragile for all the tobacco companies, as they now all want to boost market share".

After losing nearly 7 per cent last week, Smiths Group failed to finish ahead for the fifth consecutive session, edging back 1p to 1,122p. RBC did not help, reducing its target price to 1,000p following last Wednesday's interim management statement, and the broker also dealt a blow to those praying for a break-up, saying such a move was "neither likely or in shareholders' interests [in the] near term".



Investors were persuaded to take a punt on Ladbrokes on the FTSE 250, with the group jumping up 1.9p to 146.9p after Peel Hunt increased its advice to "buy". The broker said a number of factors, including the popularity of gaming machines, meant the time was "right to take a more positive stance on the land-based bookmakers", although its reiteration of William Hill's "buy" rating only prompted it forwards 1.5p to 218.7p.

The London Stock Exchange advanced 5.5p to 949p as the Maple Group – a consortium of Canadian banks and pension funds – launched its $3.8bn rival bid for the Toronto Stock Exchange. Elsewhere, market gossips continued to get excited about Northumbrian Water, with the latest revival of vague bid speculation pushing it up 4.9p to 387p.

BAA's announcement that its airports saw a 9.2 per cent year-on-year rise in traffic last month meant International Airlines Group and easyJet both gained altitude, climbing 2.5p to 224.8p and 2.4p to 354.9p respectively. The news prompted Panmure Gordon to highlight the "positive backdrop" for the Restaurant Group, whose chains – including Frankie & Benny's and Garfunkel's – operate in a number of airports, and the company ticked up 1.6p to 296.2p.



Down on the Alternative Investment Market, Sterling Energy dropped nearly 25 per cent after the explorer said its new well in Kurdistan was not able to produce gas at a commercial rate, knocking it back 10.5p to 35p.

At the other end, AssetCo – which provides London's fire engines – shot up 1.31p to 4.95p following the troubled outsourcer's announcement that it is once again in talks over a potential takeover with "a number of parties".

Start your day with The Independent, sign up for daily news emails
News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen