Market Report: Henderson is 'the special one' after bid rumours

 

Having recently snapped up Real Madrid manager José Mourinho to front its advertising campaign, Henderson has shown it is capable of making big signings. However, the fund manager was itself the "special one" for many punters yesterday amid the return of speculation it could become a takeover target.

The Anglo-Australian group – which last year bought its crisis-hit rival Gartmore – was pushed up 3.3p to 127.6p by the vague rumours, which put forward a pension fund in Canada as well as a firm from the Far East as potential bidders. Further details on their identities were scarce, although a possible price was being mentioned of roughly 225p-a-pop.

This is not the first time that Henderson has found itself the subject of the rumour mill, with Australian bank Westpac having in the past been suggested as a potential aggressor.

Dealers were not getting too excited over the reheated whispers, however, while some in the City were claiming that Henderson was more likely to be the hunter than the hunted.

Having started the session deep in the red, by the bell the FTSE 100 had managed to recover most of its early losses. With Apple's announcement that it would start paying a dividend and launch a share buyback supporting stocks on Wall Street, the benchmark index ended up closing a mere 4.47 points weaker at 5,961.11.

Many of the heavyweight miners ended up, despite JPMorgan Cazenove's scribes downgrading their advice on the sector to "neutral", saying the "increasing uncertainty over China outlook warrants a cut".

They were more positive on the insurers, however, claiming the sector should be "the biggest fundamental beneficiary of rising [bond] yields", as Resolution ticked up 4.7p to 283.5p.

Still, it was beaten to pole position by Royal Bank of Scotland which continued its recent rally by climbing 1.03p to 29.17p. The bank – which has added 15 per cent over the past five days – is now trading at its highest since August.

Croda International was left with the wooden spoon, sliding 67p to 2,171p on the speciality chemical maker's first day since being promoted to the Footsie as part of the latest indices reshuffle, while fellow newcomer Aberdeen Asset Management was knocked back 1.2p to 252.2p.

At the same time, Essar Energy – which, together with Cairn Energy (down 1.2p to 331.9p), has been relegated to the FTSE 250 – was storming ahead, shooting up 16.9p, or 13.53 per cent, to 141.8p. The move prompted the reheating of speculation that the power generator's majority owners may be considering taking it back private, although the idea was once again widely rubbished.

Instead, traders put the rise down to the decision by Bank of America Merrill Lynch to add the group to its "Europe 1 focus list", with the broker saying Essar was "misunderstood and underloved".

 

Also enjoying a dramatic rise was Gem Diamonds ahead of its full-year results today. The precious stone miner, which has been the subject of bid speculation recently, shifted 13.53 per cent higher to 141.8p, although traders pointed out it was a stock prone to sharp moves.

Following the news that Misys had agreed a deal with Vista Partners worth 350p a share, hopes for a rival offer appearing were clearly high as the software group rose 24.5p to 354p. CVC and ValueAct, who had said they could make a joint approach, announced they would "continue to consider their options", although Investec warned it was "hard to see why [the two] would opt to bid higher".

Meanwhile, Merchant Securities' Roger Phillips said that "M&A speculation will grow regarding other UK large-cap software names". He added that he believes "Sage ultimately remains a target for global private equity, or possibly even Intuit", although this did not prevent the group easing back 0.5p to 298.8p.

 

Although Cisco's recent deal-making has been seen as ominous for Pace, investors in the set-top box maker were told their takeover dreams may not be over. Last week, the US giant said its deal to snap up Staines-based video software group NDS was part of its attempt to move away from set-top boxes, renewing fears over the future for Pace's major business.

However, Seymour Pierce's Ian Robertson pointed out that Cisco "made clear... further acquisitions are always being considered", adding that the company could be tempted to view Pace – which stayed steady yesterday at 89.75p – as a "useful acquisition to help make the NDS deal's strategic goals achievable".

Meanwhile, Cadogan Petroleum slumped 7.76 per cent to 25.25p after revealing Italian giant Eni will not take up the option to raise its stake in the explorer's self-titled project in Ukraine after analysing results from two wells.

 

FTSE 100 Risers

l Antofagasta 1,246p (up 17p, 1.38 per cent) Chilean miner advances after Exane BNP Paribas upgrades its recommendation to "outperform" while Nomura reiterates its "buy" rating.

l BT 217.4p (up 1.8p, 0.83 per cent) Telecoms giant rises in the wake of reports over the weekend claiming it is preparing to pump as much as £1.5bn into its pension fund to tackle its deficit.

FTSE 100 Fallers

l National Grid 632p (down 12p, 1.86 per cent) Utility is knocked back by Bank of America Merrill Lynch's decision to cut its rating to "neutral" as part of a negative note on the European sector.

l Standard Life 247.7p (down 3p, 1.2 per cent) Insurer finishes the session deep in the red after Credit Suisse's analysts reduce their recommendation from "neutral" to "underperform".

FTSE 250 Risers

l Cable & Wireless Worldwide 34.89p (up 1.4p, 4.18 per cent) Telecoms firm rises amid the revival of hopes that the possibility of tax benefits could persuade mobile phone giant Vodafone to make a bid.

l Domino Printing Sciences 565p (up 9p, 1.62 per cent) Industrial printer sees a tiny rebound, having shed over 16 per cent in the previous two trading sessions after warning last week sales were unlikely to grow this year.

FTSE 250 Fallers

l Exillon Energy 205p (down 13p, 5.96 per cent) Oil producer slumps to the foot of the mid-tier index after announcing full-year losses of $7.1m (£4.4m), almost double what it suffered over the previous 12 months.

l Berkeley 1,365p (down 29p, 2.08 per cent) Housebuilder is knocked back despite revealing it enjoyed strong trading between November and February, with forward sales rising to more than £1bn.

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