Market Report: Invensys shares up as bid rumours return

A rise in Invensys' share price was the signal for takeover gossip to re-emerge around it yet again, which traders were quick to shoot down.

The engineering and industrial controls company firm has frequently been the subject of rumours over a potential bid, with talk of an approach from Siemens doing the rounds in the summer. At one point yesterday its price reached 316.8p, but the gossip eased in the afternoon and the company finished on 300.3p, up 13.4p .

Analysts were not surprised that the possibility of a bid was once again in focus, with one saying it is a subject that is always talked about. "It's quite a logical thought," he added, "because Invensys is a £2.5bn market cap company and all of its peers are much bigger." He did point out that the company's pension deficit would cause problems, but said that if this was sorted out, "these stories could become very likely".

Although acknowledging the rumours, traders gave the main reason for Invensys' rise yesterday as an impressive conference call that is said to have allayed many analysts' fears over its latest figures. The company's first-half results, released yesterday, showed a 2 per cent drop in operating profits, and its rail unit took an £18m hit from increased costs on three major projects.

Overall on the FTSE 100, investors reacted with enthusiasm to Wednesday's decision by the US Federal Reserve to embark on a second round of stimulus measures to the tune of $600bn, and it ended 113.82 points up on 5,862.79, the highest it has been for nearly 29 months. The miners were among the top performers, with Xstrata – up 90p to 1,366.5p – and Eurasian – up 61.5p to 949.5p – both gaining.

Man Group, which itself has recently been the subject of takeover rumours, was the top dog after releasing its first-half results. The hedge-fund company posted forecast-beating pre-tax profits, with the main performer being its AHL fund. Singer Capital Markets was bullish about its outlook, picking up on its strong improvement in investment performance, and kept it as a "buy". The company ended 37.1p stronger at 290.8p.

The decision by the Canadian government to block BHP Billington's $39bn takeover attempt of Potash Corp may have been a blow for the world's largest miner, but traders saw an opportunity. Piling in to the company on the belief that BHP could initiate a share buyback, its price recorded a new high of 2,430p, adding 150p. Research from USB predicted that the company may "re-rate part of its 13 per cent underperformance relative to [Rio Tinto] since the bid was announced" as a result of the news, and kept its advice as "buy".

Unilever saw its price shoot up yesterday 114p to 1,924p, as the consumer goods giant – which makes everything from Bovril to Vaseline - revealed latest results that include a 3.6 per cent growth in sales over the third-quarter, matching expectations. Brokers welcomed the news, and Investec said they "remain happy buyers".

Just 20 companies suffered falls yesterday on the top-tier index, with Rolls-Royce the principal straggler. The engineering giant suffered after the news that a Rolls Trent 900 engine failed in a Qantas plane yesterday. The Sydney-bound aircraft had to make an emergency landing in Singapore, and the Australian airline grounded all of its six Airbus A380s in response. Singapore Airlines did the same with their fleet of the same model, knocking back Rolls-Royce 33p to 621.5p.

On the FTSE 250, the housebuilders found themselves crowding around the top despite mixed results from the latest Halifax report. Although house prices fell by 1.2 per cent over the past three months, October saw a 1.8 per cent rise that followed a large drop of over 3.5 per cent the month before. Taylor Wimpey and Barratt Developments were just some of the sector's beneficiaries, up 1.93p to 25.02p and 5.85p to 83.5p respectively.

The miner Kenmare Resources headed the mid-tier index, climbing 2p to 23p. Tate & Lyle also advanced, ending 34.3p better off on 524.5p, after it beat profit forecasts for the half-year, banking a rise of more than 20 per cent. Supporting its "buy" advice on the firm, Prime Markets' Richard Curr predicted good times ahead, saying "there is every chance the group could upgrade forecasts for the current full year and next year".

However, things were not looking so good for Cable & Wireless Communications, and its announcement of a 2 per cent climb in sales over the first half could not prevent the telecoms company sliding 7.06p to 46.99p.

Among the small-caps, Photo-Me International – best known for its photo booths – soared 13.56p to 67p off the back of a bullish trading statement and a promise from the company that it will look at a considerable increase in its interim dividend.

On the Aim, the oil explorer Cove Energy managed to raise about £110m through a placing of 144.7 million shares. The company plans to use some of the money on its East Africa prospects, and it edged 1.25p up to 80.5p.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Accounts Payable

£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...

Technical BA - Banking - Bristol - £400pd

£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...

Account Management Strategy Manager

£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice