It was one of the worst-kept secrets in the City. For weeks rumours have been doing the rounds that GDF Suez was not happy with just 70 per cent of International Power, and yesterday the talk was shown to be on the money after it was revealed that the French firm has made an approach worth 390p a pop.
Yet, with the amount offered just a small premium to Wednesday's closing price of 383.4p, many were banking on there being more to come as traders noted hopeful speculation it could be raised as high as 425p a share. Espirito Santo's analysts were less optimistic,saying they believed GDF "will have to raise their bid, but not by much" and suggesting a fair value of 407p.
RBC's John Musk, meanwhile, called the approach "the first step". "Our current valuation of International Power is 400p and this does not include any M&A premium," he said, before adding that how high the offer could go "will largely depend on the bargaining ability of the minority shareholders".
Investors were clearly confident, pushing the group up another 21.6p to 405p, meaning it has now rallied close to 25 per cent since February.
A third consecutive day on the slide, and the worst of the bunch, left the FTSE 100 66.96 points worse off at 5,742.03 – its lowest since January. A number of factors were being pinned to the move, including Standard & Poor's claim that Greece will probably have to restructure again and a warning from the OECD that the UK is heading back into recession.
The banks were among the major losers – with Barclays taking the wooden spoon after dropping 11.45p to 234.15p – as were a number of the heavyweight miners. BHP Billiton retreated 7.5p to 1,877.5p following overnight reports that the fund management giant BlackRock has cut its stake in the heavyweight digger while staying overweight on Rio Tinto, which climbed 59.5p to 3,375.5p.
The high street institution Marks & Spencer was knocked back 11p to 373.2p after traders made the read-across from H&M's latest figures. The Swedish retail giant – a favourite of those who are cash-strapped yet fashion-conscious – missed forecasts with its first-quarter profits, and with the group putting the blame largely on rising cotton prices, Next was also on the slide, dipping 29p to 2,980p.
It is fair to say that Panmure Gordon's Oliver Wynne-James is not the biggest fan of GKN. The analyst warned he could "rage all day about [the] shortcomings" of the engineer, which is expected to strike a deal over the next few weeks to buy Volvo's aircraft business.
Nonetheless, he gave the company a "neutral" rating, saying that "it is not worth turning negative on the stock at current levels", although it still declined 4.7p to 202.4p.
Investors who thought they were finally going to learn whether Vodafone (up 0.75p to 174.45) and Tata Communications will submit bids for Cable & Wireless Worldwide were told they will now have to wait until 19 April. The takeover panel extended the deadline – which was set at 5pm yesterday evening – for both parties, as the telecoms group shifted down 0.44p to 33.56p on the FTSE 250.
The takeover potential of Phoenix was back in the spotlight after Berenberg's Peter Eliot suggested that the insurer could become a bid target again, having ended talks with CVC Capital Partners last month. The scribe also raised his target price to 695p, saying the group has "very interesting potential in 2012", as it ticked up 1.5p to 562p.
There was no missing the clear loser on the mid-tier index, with FirstGroup reversing all the way down to 247.4p – a move of 41.7p, or 14.42 per cent. The transport company's admission that its bus operations in the north of England and Scotland were facing a tougher time than elsewhere in the UK also hit rivals Go-Ahead and National Express, who slipped back 71p to 1,230p and 12.8p to 239.2p respectively.
Ithaca Energy edged down 1.5p to 190.5p after releasing its final results, which included an increase to its estimated reserves. The North Sea oil and gas group also said it was still in takeover talks, prompting vague speculation a deal may be struck soon.
Moss Bros was also announcing full-year figures, which were greeted positively in the Square. However, by the bell the small-cap suit retailer was 0.75p weaker at 47.5p following the news that major shareholder Tony Cann has put his 29.9 per cent stake up for sale.
Mouchel had 18.6 per cent of its share price wiped off after the beleaguered contractor admitted it could launch a "significantly dilutive" equity fundraising. As investors scrambled to get out, the group – which also revealed details of a major restructuring – was pegged back 2p to 8.75p on the fledgling index.
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