Market Report: Fall helps Micro Focus' takeover credentials

Investors in Micro Focus were given some hope yesterday after its disastrous session on Tuesday, when it lost more than 25 per cent of its value, as they were told it was now more likely to be the target of a takeover attempt.





The software group dropped over 100p earlier in the week thanks to a profit warning - its second in six months - but last night it advanced 5p to 296p, with analysts expressing their confidence that there would be no more dramatic dips.



Among those urging the market to take stock was Singer Capital Market's Tintin Stormont, who reduced the company's price target to 330p but kept his "buy" advice on the stock. There has been speculation in recent months that Micro Focus could attract an approach, and Mr Stormont said he believed "at this level, [it will] look very attractive to players like IBM and HP."



The analyst praised its cash generation as well, giving this as another reason why although "estimate momentum has been poor and confidence in the business is shaky, we believe there is enough support at these levels".



Also relatively positive on the group was Panmure Gordon's George O'Connor, who changed his recommendation from "hold" to "buy" and said "the problems are identified and in our minds fixable".



Meanwhile Numis Securities' David Toms said Micro Focus was "substantially undervalued and will either demonstrate this through near-term operational performance, or will become a strategic target".



Despite disappointing domestic data, the FTSE 100 managed to add 48.19 points and close at 6,085.27, helped by the banks continuing to move forwards following strong results from Barclays - up 3.25p to 332p - on Tuesday.



The blue-chip real estate investment trusts (Reits) were building towards the summit, thanks to a large note on the sector by HSBC. Despite its analyst Nicolas Lyle saying he was wary of "UK Reits' potential as an inflation hedge", he upgraded his rating on British Land to "overweight" and Land Securities to "neutral", prompting a rise of 14.5p to 557.5p and 25p to 727p respectively.



The latest figures from Heineken seemed positive for SABMiller, which finished 3.5p ahead at 2,106p. The Grolsch-brewer's rival revealed forecast-beating numbers, thanks in part to savings made, and it also issued a bullish outlook on Africa and Latin America, both regions in which SABMiller has a strong exposure.



There was a boost of 2.4p to 140p for RSA Insurance, as market gossips became excited over the return of vague takeover talk around the company, with speculation spreading that it could be about to receive an approach.



Resolution shot up 16.6p to 280.6p as Redburn started its coverage on the Clive Cowdery-owned investment vehicle with a "buy" note. Meanwhile a positive initiation also helped GKN - 9.3p stronger at 217p - as Investec said it was "benefiting from volume recovery in its core automotive and industrial markets".



African Barrick Gold and BHP Billiton both released figures, but the miners saw rather different reactions. The former gained 5p to 532p, as its earnings for the 12 months beat expectations, but the latter finished 36p behind at 2,464p despite revealing record profits.



There was little movement on the second line for PartyGaming, which edged down 0.1p to 174.8p, as analysts disagreed on what the future will bring after it merges with bwin.



Noting that the new company's shares are set to start trading on 1 April, Morgan Stanley said the deal was "not an April fool", adding that the gambling company's "valuation is far too low". However, Investec's Paul Leyland was much more cautious, especially on Germany, where he said there is a "real risk" that online gambling could be effectively banned.



The gold medal position on the mid-tier index was taken by Premier Foods, 2.15p higher at 27.9p. Credit Suisse increased its advice to "outperform" in the wake of its final results on Tuesday, and said that the group - which recently announced the disposal of its Quorn and canning units - "should now be able to renegotiate its debt from a much improved position".



Just behind after a surge of 22.5p to 299p, Morgan Crucible issued a bullish prediction alongside its full-year numbers, saying that it plans to double its underlying pre-tax profit by 2013.



DOWN AMONG the small-cap stocks, Mouchel increased 8p to end the day at 138p as Costain said that discussions had been held between the two over its latest approach for the services company. The construction group, which slipped 4p to 240p, made its third attempt last month with a proposal worth £170m.



Among those moving on the Alternative Investment Market was Lo-Q, whose virtual queuing systems can be found in Dollywood as well as a number of other attractions and theme parks. It was 17.5p better off at 145p as its profit after tax increased by over 20 per cent.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

PROMOTED VIDEO
Arts and Entertainment
Actor and director Zach Braff
tv

Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Arts and Entertainment
tv

Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of the Jane Austen classic - with a twist

Arts and Entertainment
Lionel Messi in action for Barcelona
filmWhat makes the little man tick?
Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes hobby look 'dysfunctional'
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week