Market Report: Eventful day for Informa after talk of takeover

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The Independent Online

Risk-averse investors may have pushed the market down yesterday, but Informa moved ahead thanks to talk it could become a takeover target yet again.

The publishing and events group has received a number of approaches in recent years, but since February its share price has been on the slide, dropping nearly 25 per cent. UBS said this had left it "far too cheap", warning that if the group failed to recover, "other interested parties may take advantage of the depressed valuation".

Private equity consortiums made bids for the company in 2006 and 2008, and scribblers from the broker said they could be tempted to try again thanks to the potential synergies that may come from merging Informa's academic publishing business with a peer.

Reiterating their "buy" advice, the analysts also highlighted the potential for the company in emerging markets and raised its target price to 520p from 460p. In response, Informa touched a high of 349.4p, before closing 6.1p ahead at 348.1p.

It was not a good day for those of a nervous disposition, with many standing on the sidelines ahead of the Federal Reserve's policy statement, due after the bell. Although some support did come from the latest minutes from the Bank of England's MPC, which suggested it was getting closer to introducing a further round of quantitative easing, the FTSE 100 still finished 75.3 points behind at 5,288.41.

With metal prices falling, the miners were among the weakest and Antofagasta, down 83p at 1,114p, ended the session in last place. Meanwhile, Xstrata and Rio Tinto dropped 36.2p to 939.8p and 148.5p to 3,389p respectively, as the latter tried to prevent strikes at its Rössing uranium mine in Namibia.

After having seen its share price jump almost 30 per cent in just six weeks, Inmarsat was on the slide, shifting down 13.3p to 490.2p. The mobile satellite group has been the subject of persistent bid speculation regarding possible private equity interest, but Citigroup's analysts – who cut their advice to "hold" – were playing down the chatter.

Inmarsat was also knocked by Morgan Stanley's Terence Tsui, who highlighted the Federal Communications Commission's call for more testing on its US partner LightSquared's high-speed wireless-network plans. Downgrading his advice to "underweight", Mr Tsui said that the developments put "at risk the sustainability of LightSquared payments to Inmarsat for 2012 and 2013".

Companies losing their payout attraction were weighing on the benchmark index, with International Power sliding 9p to 327p while Petrofac retreated 34p to 1,365p.

Aviva, which was also trading ex-dividend, was even worse off, falling 12.7p to 295p. The insurer was added by UBS to its list of "least-preferred" stocks as it criticised the company's "significant eurozone exposure... comparatively geared balance sheet, and low solvency ratio".

The broker was much more keen on Prudential, however, citing "its ability to benefit from economic expansion in Asia", though this was not enough to stop the insurance giant creeping back 3p to 597p.

Rumours cookson could be in line for a 700p-a-share approach saw the industrial materials maker advance 20.9p to 465.3p on the FTSE 250, with comments from Panmure Gordon's Oliver Wynne-James supporting the vague chatter.

The analyst said the current bid battle over Charter International "shows that there is more than a fair price for unfashionable industrial assets that become perennially undervalued", adding that between Cookson's share price and his valuation of the company "there is enough of a value gap... to tempt the opportunists".

Meanwhile, Cookson's fellow engineer Morgan Crucible was also getting the gossips excited, with vague speculation suggesting a possible 400p-a-pop offer, as it climbed 7.8p to 256.2p.

Rumours that Tesco – 7.15p weaker at 364p – could be about to go on a price offensive was not welcomed by Ocado, as investors deserted the online grocer over fears it will be especially badly hit by the move. By the bell the company had slumped 13.2p to 102.5p, a record low, meaning it has lost nearly a quarter of its share price since the release on Monday of its third-quarter update.

Imagination Technologies grabbed the gold-medal position on the mid-tier index, powering up 22.9p to 445.9p. Pointing out that the chip designer has lagged behind its blue-chip rival ARM Holdings, traders said it was feeling the benefit of a recent run of good news.

Down on the Alternative Investment Market, the video security group IndigoVision plummeted 30p to 182.5p. Having already released two profit warnings in the past few months, it announced its full-year operating profit had dropped by nearly £2m to £1.19m.