Market Report: Mapeley soars 20% as it confirms takeover talk

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The Independent Online

Takeover talk sent shares in Mapeley soaring yesterday as traders speculated that a bid for the property outsourcing company was imminent.

As the company's shares jumped by more than 20 per cent, Mapeley was forced to confirm it is in early-stage talks about an indicative offer, but the company left investors guessing at its suitor's identity.

Traders were unconvinced by the possibility of a hostile bid, citing the fact that the US hedge fund Fortress Investment Group has a majority stake in the company and would need to back or at least approve any deal. Some concluded that a management buyout was the most likely outcome. Mapeley's shares rose by 297p to 1,750p.

Takeover speculation also swirled round Shire, the pharmaceutical group which is often touted as a target for its larger rivals GlaxoSmithKline and AstraZeneca. The rumours, which surfaced just before the close, suggested a £14-per-share offer was likely soon. No suitor was identified and a lack of enthusiasm for the rumour was evident in Shire's share price, which climbed by just 15p to 1,015p.

Overall, the benchmark FTSE 100 broke through the 6,000 level to end at 6,087, up by 87.90, while the FTSE 250 rose by 108.6 to 10,383.90. The blue-chip index was boosted by the banking sector, which maintained its rally on the back of some good results from Standard Chartered. The bank, which reported a 25 per cent rise in pre-tax profits, saw its shares climb to second place on the leaderboard, up by 124p to 1,704p.

Alliance & Leicester, which kept a hold on the top spot, remained firm as speculation suggesting a possible bid from rival Lloyds TSB kept circul-ating. A&L shares rose by 45p to 600p while FTSE 250-listed Bradford & Bingley, the other bank being mentioned as a likely takeover target for Lloyds, rose by 6.25p to 206.50p.

Elsewhere in the sector, Royal Bank of Scotland rose by 16.50p to 413.50p, HBOS gained 27p to 705p, Barclays was up by 11p at 518p, and HSBC put on 27.50p to 798.50p. Among the mid-caps, Premier Foods was again depressed by a negative broker report. Analysts at Panmure Gordon complained that they no longer felt "confident we know what is going on with Premier" after learning the company had not completely closed its bakery in Bradford as announced last year.

Panmure added: "We also doubt the effectiveness of Premier's cost recovery in cakes. With rising input costs likely to exert further pressure on the balance sheet, we are cutting our forecasts for next year, and our recommendation from 'Buy' to 'Hold' with a new 100p [from 275p] price target." Shares in Premier, which were £2 at the start of the year, fell by another 4.50p to 92.50p.

Concern about Premier, coupled with fresh figures charting yet more food price inflation, also hurt its peer Northern Foods, which fell by 1.50p to 91.25p.

Game was the worst performer on the FTSE 250 yesterday. Investors fled from the stock after news that its chief exec-utive Lisa Morgan and her deputy and group finance director David Thomas had sold more than £5m worth of their shares in the firm.

Game, which is due to publish its results on 29 April, enters close period on Friday, and the sale, done on Thursday and revealed to the market in a regulatory news announcement yesterday, fuelled concern about the state of business at the specialist retailer.

Nick Bubb, the respected retail analyst at Pali International, was less worried. "The bears are bound to say that they are getting out while the going is good," he said, "but, to be fair, share incentive options are there to be sold..." Game closed down by 32p, or by 14 per cent, at 192.75p.

On AIM, the recruitment specialist Imprint was boosted after its Dublin-based peer Premier said it was considering a possible counter-offer to Hydrogen, which wants to acquire the company.

Premier is looking at a cash offer of around £45.2m, above Hydrogen's bid, which values Imprint at around £43m. Hopes of a bidding war took Imprint's shares up to 113p, heavier by 8p, while Hydrogen's remained flat at 214p. Premier is not listed.

Also on AIM, India Outsourcing Services, whose name is due to change to Indian Restaurants Group, returned to market after its acquisition of Mela Group. The company is hoping to build on Mela's eponymous restaurant on London's Shaftesbury Avenue, and the Chowki restaurant by Piccadilly Circus, to create the UK's first nationwide chain of Indian restaurants. The company's shares closed flat at 13.50p.

GoIndustry, the indust-rial machinery auctioneer, completed the acquisition of its US peer Dove Bid for £17m. Its shares firmed up by 0.25p to 10.25p.