Market Report: Meggitt takes off as Goldman emphasises its attractions

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The Independent Online

Trading screens may have been full of red today, but takeover chatter left Meggitt one of the few winners.

The airplane-parts maker flew to the top of the mid-tier index after bid activity in America prompted City scribblers to tout it as a potential target. Reports have been doing the rounds that US conglomerate United Technologies is in talks to buy North Carolina-based aerospace manufacturer Goodrich. Goldman Sachs analysts said a deal "could kickstart a wave of mergers and acquisitions across the industry", and consequently singled out Meggitt as attractive because of both its niche market position and small size. It climbed 8.1p to 328.1p in response.

The FTSE 100's four-day winning run was brought to an abrupt end, as the benchmark index plummeted 98.84 points to 5269.57, with just six blue-chip stocks managing to move ahead.

Investors were tempted into profit-taking amid the return of vague speculation - played down by traders - that Greece could be about to default, with fears growing over a €750million (£651 million) coupon payment due tomorrow.

The focus on the eurozone meant, unsurprisingly, banks were among the worst hit, despite Evolution Securities' banking guru Ian Gordon saying the sector still contained "unusually compelling investment opportunities".

Lloyds Banking Group - which confirmed its finance director Tim Tookey had resigned to join Friends Life - fell 2p to 33.8p. Barclays and Royal Bank of Scotland dropped 8.1p to 155.3p and 1.2p to 23.1p respectively.

Elsewhere, last week's persistent rumours of private equity interest around Inmarsat, which saw it climb more than 13%, were on the wane as the mobile satellite group retreated 23.5p to 509.3p.

Ashmore and Bunzl were not enjoying their start to life on the top-tier index, with the fund manager falling 9p to 393.6p and the packaging company slipping 6p to 784.5p on their first day after gaining promotion in the recent indices reshuffle.

Tighter takeover rules introduced today were already having an effect. With gossips still maintaining that Ladbrokes could end up offering more than 75p a share forSportingbet, the small-cap online gaming group - which edged down 0.25p to 52p - said talks were ongoing and reminded the bookmaker - 0.6p behind at 126.2p - that it now has a month to unveil a formal offer.

Elsewhere among gamblers, investors in Probability were celebrating after the mobile gaming operator announced it was in bid discussions with William Hill (0.3p weaker at 227.9p). As a result, its shares gained nearly 48%, shooting up 23.5p to 72.5p.