Market Report: Michael Page climbs as Adecco bid talk returns
Wednesday 24 August 2011
The possibility of Michael Page becoming a takeover target again was in focus last night following rumours Adecco could be gearing up for another attempt at the recruiter.
The group enjoyed a late spurt to shift forwards 11.8p to 362.5p on the mid-tier index after vague speculation suggested it may attract a new approach from the world's largest staffing group.
Adecco entered into bid talks with Michael Page in 2008 , valuing it at 400p a share, before pulling out after being rejected twice, but the latest chatter said it could now offer as much as 550p a share. Meanwhile, the Amsterdam-listed recruiter Randstad was also said by market gossips to be potentially interested in the company.
Michael Page received another boost yesterday from Deutsche Bank calling it "the highest quality recruitment firm under our coverage", although the broker kept its "hold" rating, saying current fears over the economic climate meant there was "too much downside risk in the shares".
This was despite the group currently being around its lowest share price for over a year, having fallen by a third in less than a month. Its half-year results last week were particularly disappointing, as it warned of a slowdown at its banking business while its pretax profit for the period missed market expectations.
Although the FTSE 100 fell back from an early high of 5,193.17 points, it still finished 34.12 points stronger at 5,129.42 – a second straight session ahead that nonetheless leaves it over 200 points lower than a week ago.
Speculation Ben Bernanke's meeting with central bankers on Friday could see the US Federal Reserve chairman announce a third round of quantitative easing was dominating conversations across the City, with some in the market warning that any disappointment come the end of the week could see the top-tier index plunge back downwards.
Arm Holdings was proving popular with investors in the wake of the re-emergence of takeover rumours around the chip designer on Monday. Despite its chief executive saying there were few benefits to a potential acquirer, the Cambridge-based group advanced 22p to 514p and Oracle, Intel and Apple were all linked in the speculation as potential aggressors.
In what has been a fairly rare occurrence since its IPO in May, Glencore International was one of the top performers, climbing 12.45p to 367.45p. The commodities trader, which floated at 530p a share, is releasing its interim figures tomorrow and Morgan Stanley's Alain Gabriel said its recent falls had provided "an opportunity to own a high-quality business at a significant, unjustified discount".
With positive data emerging from China and the prospect of an imminent conclusion to the Libyan conflict seeming less and less likely, oil prices were back on the rise. Citi still reduced its forecast for Brent oil down to $95 per barrel for the end of the year, and $86 per barrel for 2012, although it was not enough to stop BP pushing up 5.85p to 396.05p.
Some of the banks, which were conspicuous in their absence from Monday's rally, managed to finish in the blue, as Lloyds Banking Group and Royal Bank of Scotland moved off their lowest share price since 2009, gaining 0.74p to 28.3p and 0.33p to 20p respectively. Morgan Stanley said there was "value in the UK banks overall", although it warned about "the multiple risks currently facing the sector, most notably related to sovereign debt, economic growth, funding conditions and UK regulation".
Charter International provided the biggest move of the session, soaring 125p to 747p on the FTSE 250. The tool manufacturer, which has knocked back two offers from Melrose, revealed it had a new approach. The US group Lincoln Electric last night distanced itself from early reports suggesting it was the new suitor.
Melrose, meanwhile, ticked up 8.2p to 295p ahead of the release today of its interim results, and some in the market were speculating the manufacturing buyout group could use the opportunity to raise its potential bid for Charter from the 840p a share it has already said it would offer.
At the other end SuperGroup dipped 4.97 per cent, or 47p, to 898.5p on talk a number of directors could be about to dispose of their shares. Collins Stewart pointed out that, after its float last year, lock-ups over a large proportion of the group expire next month, suggesting this "would present an opportunity for some of the directors to sell".
Down on the Alternative Investment Market, 3D Diagnostic Imaging surged up 0.25p to 2.25p after the dental technology group announced a Russian distributor has been appointed for its handheld CarieScan Pro device, used to detect tooth decay.
Meanwhile, Gulf Keystone put on 2.5p to 128.25p following vague rumours suggesting the explorer may have reached an export agreement with the Kurdistan government.
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