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Market Report: Exillon on the rise after rumour of Russian suitors

  • @greentoby

It has been on its knees recently, but Exillon Energy spurted up yesterday after becoming the latest oil group to get a boost from takeover talk. The Russia-focused explorer – which has seen its share price more than halve over the past year – jumped nearly 8 per cent as speculation was reheated that it could become a target.

A late spurt saw the mid-tier group close 16.2p higher at 220.2p after vague rumours claimed that it may attract a bid, with a possible price mentioned of around 350p a share. It is not the first time the idea has done the rounds – similar whispers emerged last month – and while the latest revival once again suggested Lukoil as a potential suitor, Gazprom was another name in the frame.

Despite the move, however, dealers were playing the chatter down, noting that the trading volume was nothing to get excited about. Meanwhile, City voices claimed Exillon's assets were unlikely to be big enough to attract the attention of either of the two Russian giants.

Overall, it was another quiet day in the Square Mile, with many focusing their attention on the start of the Cheltenham Festival rather than their trading screens. Still, this did not stop the FTSE 100 stretching its winning streak to a fifth straight session (the first time it has done so since July) and reaching a new, eight-month high by rising 63.16 points to 5,955.91.

Bullish confidence data from Germany and promising retail sales figures from the US helped boost investors' risk appetite, and many of the miners were rallying, with Vedanta Resources and Kazakhmys climbing 61p to 1,430p and 30.5p to 986p respectively.

However, Antofagasta dipped 29p to 1,241p after the Chilean copper digger – which last week announced the surprise resignation of its boss Marcelo Awad – provided another shock by slashing its full-year dividend by nearly two-thirds.

There was a better response to Prudential's full-year results as the insurer bumped up 35p to 763p on the news that for the first time ever its Asian unit provided the biggest contribution to its operating profits.

Financial stocks were generally on the rise, with HSBC lifted 16.3p to 572.4p while Lloyds was 0.94p better off at 34.61p.

Elsewhere on the blue-chip leaderboard, International Airlines Group flew 3.7p higher to 166.95p following the news that a pilots' strike at the British Airways-owner's Spanish airline Iberia has been called off.

The housebuilders were on the move after Credit Suisse gave the thumbs-up to a new scheme aiming to help up to 100,000 first-time buyers get on the housing ladder.

Although the broker's analysts said the plan's target, which was launched earlier in the week by David Cameron, was "unrealistic", they added that "only a small fraction [needs to be] delivered to make a material impact". In response, Taylor Wimpey – which had its "outperform" rating reiterated – advanced 2.14p to 52.1p while peers Barratt Developments and Bellway ticked up 7.5p to 149.3p and 20.5p to 846.5p respectively.

There was much excitement around Mitie after the outsourcer revealed it had been chosen as the preferred bidder for a contract to provide a number of services for Lloyds. Details were scarce, although with the mid-tier group saying the tender process was looking to create "a transformational partnership", it was pushed up 16.6p to 285p – a four-year high.

The takeover hopes of Inmarsat took a battering as the satellite telecoms firm slipped 8.5p to 469.4p. Last month saw the return of rumours it could become a bid target, with private equity and US giant General Electrical among those put forward as potential suitors, but Citigroup yesterday poured cold water on the idea.

The broker's analysts argued that the possible synergies between Inmarsat and an equipment maker were "not obvious", while adding that there were numerous risks for a private equity firm. They also advised investors sell out of the group, saying that its current valuation was "unjustified compared to faster-growing satellite peers".

3i climbed another 13.6p to 210p following the revival of speculation earlier in the week claiming the private equity firm could become a target for either a management buyout or an approach from a rival.

Vague takeover rumours were also making a return around Gulf Keystone Petroleum as the punters' favourite bounced up 12.19 per cent to 269.25p. The speculation again suggested China's Sinopec as a possible bidder for the AIM-listed explorer, although traders were decidedly unimpressed by the chatter.

SocialGO was knocked back 20.69 per cent to 1.15p after the social network site creator said it had no information to announce after seeing its share price jump by nearly two-thirds on Monday.