Market Report: Fears Aberdeen could be caught up in expensive bidding war

 

Reports from Down Under that could mean an expensive bidding war for fund manager Aberdeen Asset Management sent it to the bottom of the Footsie yesterday.

Punters panicked on news that Australian giant MacQuarie is to make a £500m counter-offer for Scottish Widows Investment Partnership – the fund management arm of Lloyds Banking Group that Aberdeen has been in talks to acquire.

There are concerns a bidding war may lead to the fund manager paying over the odds. Analysts at Jefferies issued a cautious note about the deal, and Aberdeen was down 20.2p at 422.2p.

British Airways owner IAG soared 27.9p to 376.9p, a five-year high, after a third-quarter update that smashed forecasts.

Despite renewed concerns about tapering of monetary policy in the US, the FTSE 100 ticked up 11.20 to 6708.42.

Bookie William Hill lost 9p to 385.4p after an underweight rating from analysts at HSBC. The UK’s new tax on internet gambling unnerved the experts as they said it could be “difficult to offset”. HSBC warned there could be “less scope for tax mitigation”, and rated it underweight and preferred Betfair (overweight) because it has “pricing power” and “self-help measures”. Betfair was 1.5p weaker at 981p.

Housebuilders were largely back in favour with traders after a dip in popularity earlier in the week when Persimmon warned that the second phase of the Government’s Help to Buy scheme had so far been subdued. Traders feared the hope of a big boost from the scheme may have been overestimated. But a solid update from Bovis Homes helped it up 17.5p to 779.8p while Barratt Developments was 7.9p better at 321.4p ahead of its update next week.

Troubled coal miner Bumi was 10p warmer at 234.25p after confirming it will go ahead with the split from its co-founders, the Bakrie family, even though there is no guarantee the family will finance it.

On AIM, miner Condor Gold displeased investors with its mineral resource estimate for its La India project in Nicaragua, and it fell 22p to 100p.

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