Market Report: Morgan Stanley rekindles DSG bid speculation

DSG International, the company behind the PC World retail chain, was firm yesterday after market rumours mooted the possibility of a bid from Best Buy, the American retail giant that recently entered in to a joint venture with Carphone Warehouse.

Traders said the speculation, which first surfaced before Best Buy announced the deal with Carphone, was reignited by a note from Morgan Stanley.

"We think that the new [joint venture between Best Buy and Carphone] will need to make an acquisition if it is to achieve its ambitions, and that [DSG] is a plausible target," the broker said.

"If a bid is forthcoming, we believe that it is likely to happen before the end of this calendar year."

Morgan Stanley also put the stock on its "buy" list for the first time, citing, beside possible bid activity, the company's turnaround potential and the possibility of a general rebound in depressed retail shares.

DSG climbed more than 3 per cent, or 1.75p, to 58.25p.

Elsewhere, bid speculation was evident around Minerva, the property investment and development company. Earlier in the month, Limitless, a division of the Dubai World sovereign wealth fund, revealed its hand and said it was in the "very preliminary stages of considering its options" in respect of the company.

Yesterday, market rumours suggested the Middle Eastern group had decided to make a formal proposal and may offer as much as 160p per share. Minerva rose 8p to 101p.

The FTSE 100 lost 14.6 to 6,053.5 as miners and oil companies fell, owing to weak commodities prices. The FTSE 250 shed 48.9 to 10,049.3.

British Airways drew strength from a temporary lapse in the recent oil price rally and fared the best on the London benchmark, gaining more than 8 per cent or 17.5p to 232.5p.

Fortunes were also reversed in the banking sector, where leading stocks recovered after a grim session on Thursday. Alliance & Leicester climbed 5p to 425.25p and Lloyds TSB added 7p to 384p.

However, HBOS, which was down 14.25p at 400p, Royal Bank of Scotland, which lost 3.25p to 228.5p, and the FTSE 250-listed Bradford & Bingley, which lost 2.25p to 88.25p, remained weak, owing to continuing concern regarding the take-up of their rights issues.

Among oil companies, Tullow Oil was down 32p at 890p, at second place on the FTSE 100 loser board.

Mining companies were also weak and Eurasian Natural Resources Corporation lost 22p to 1,459p.

Vedanta Resources was down 27p at 2,504p, BHP Billiton lost 46p to 1,914p and Xstrata was 51p weaker at 3,989p.

In addition to the weakness in commodities prices, BG, which lost 28p to 1,266p, was hit by news from Australia: Origin Energy rejected the company's A$13.6bn (£6.6bn) takeover bid.

On the FTSE 250, Taylor Wimpey continued to slide, despite some positive broker comment. Goldman Sachs took the stock off its "sell" list and moved it to "neutral", owing to the recent strong underperformance. "We maintain a negative view on Taylor Wimpey's high gearing, weak operating margins, and susceptibility to an accelerating downturn in UK housing as tighter mortgage credit contributes to weaker demand and pricing. However, we believe this is largely reflected in its shares," the broker said.

Goldman's comments were echoed by Panmure Gordon, whose analysts acknowledged the concerns surrounding the business, but said the "share price fall is overdone". Panmure moved the stock to "buy" from "hold". Taylor Wimpey was down 0.5p at 85p.

The online gaming company PartyGaming claimed first place on the mid-cap index, gaining more than 10 per cent or 26.25p to 286.5p, following speculation about a settlement with the US Department of Justice.

According to the rumours, the company had settled charges brought under US betting regulations and was now free from the possibility of future fines. The news soon sparked talk that, without the risk of further liabilities, PartyGaming may become a bid target.

The equipment rental group Ashtead touched an intra-day high of 82p amid speculation that the company had rejected an 110p- per-share bid from CCMP Capital Advisors, the American private-equity firm. By the end of play, Ashtead had relaxed to 76.25p, up 1.25p.

On AIM, OPG Power Ventures, an Indian power company, made its market debut yesterday after raising £65.1m via a placing of 108.42 million shares at 60p each.

OPG said the money will be used to finance the building of four power stations, which will increase its power output from 19 MW to 450MW in less than two and a half years. By the close, OPG had powered ahead 12p to 72p.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Sport
Members of the Scotland deleagtion walk past during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
PROMOTED VIDEO
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Latest stories from i100
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

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game