Market Report: National Express looking attractive for a takeover

With a woeful August for the City finishing on a high yesterday, analysts were on the hunt for the next big takeover deal as a number of stocks on the mid-tier index had their bid potential talked up.

Among them was National Express, which was lifted 16.4p to 250.8p after UBS said the transport group was the "most likely and attractive" target in the sector. The broker highlighted "its diversified business mix, its valuation versus peers and deal economics, and the presence of deal-friendly shareholders", and put forward Stagecoach – up 1p to 257.2p – as one potential aggressor.

Analysts from UBS also suggested Go-Ahead could become a target, saying it may be the "easiest exposure for an international player looking to get into the UK bus and rail market". The group still had its rating cut to "sell", however, thanks in part to its higher valuation, yet it climbed 64p to 1,583p.

Another having its takeover hopes raised was Spirit, the pubs group which was spun out of Punch Taverns at the start of August. The company powered up 2p to 43.5p after Numis Securities said the sector "may have to use expansion and acquisitions to offset rising cost pressure" and that as a result Spirit "could become a bid target".

There was less optimism over the likelihood of deals among the asset managers, despite Citigroup saying the current subdued outlook would "usually stimulate merger and acquisition activity". However, the broker warned the companies under its coverage were "more likely to be consolidators than targets" and that anyone interested in the two possible exceptions – Ashmore (up 19.9p to 404.4p) and Jupiter Fund Management (up 2.2p to 192p) – would have to tackle "significant blocking stake shareholdings".

Vague takeover rumours continued to do the rounds on a number of companies, including Pace. After Samsung was linked with a potential approach last week, the Japanese group Panasonic became the latest addition to the list of possible suitors by market gossips as the set-top box manufacturer put on 3.6p to 105.5p.

The engineers Invensys and Renishaw were also the subject of bid speculation, as they were driven up 18.4p to 277.5p and 136p to 1,410p respectively. Meanwhile, on the blue-chip index Smith & Nephew closed 29p better off at 625.5p despite MF Global playing down recent reheated chitter-chatter suggesting it could receive an approach from either Johnson & Johnson or Stryker, saying a deal would fall foul of US anti-trust authorities.

Overall, the FTSE 100 climbed 125.87 points to 5,394.53, meaning it has added over 5 per cent this week alone, although this did not prevent August being the benchmark index's worst month since May 2010.

Still, investors received a boost from the release late on Tuesday of the minutes from the latest US Federal Reserve meeting. Many were taking heart that they seemed to suggest support for a third round of quantitative easing was rising, while market voices claimed the recent run of disappointing economic data from the US – which included employment figures yesterday – appeared to be strengthening the possibility of stimulus measures being introduced.

It was no surprise, therefore, that those in the mining as well as the oil and gas sectors were well represented on the leaderboard, with Cairn Energy 18.1p higher at 334.8p while Antofagasta soared 67p to 1,349p.

Despite JP Morgan Cazenove saying it remained "cautious" on the UK domestic banks, the sector was still on the rise. Lloyds Banking Group charged forwards 1.57p to 33.6p while Barclays gained 5.35p to 170.75p and Royal Bank of Scotland was 0.63p stronger at 24.27p.

At the other end, the real-estate groups were being knocked down after analysts from Morgan Stanley cut their net asset value forecasts for 2012, focusing particularly on the UK. The ratings of both British Land and Land Securities were hit with a double downgrade from "overweight" to "underweight", with the former falling 5p to 539p while the latter eased forwards 8.5p to 736.5p.

Despite its French peer Carrefour issuing a profit warning, Tesco managed to tick up 13.8p to 378.6p as it revealed it was giving up on its Japanese business after eight years. Shore Capital applauded the decision, saying the disposal "may actually lead to a small boost to profits", while the broker added that Carrefour's disappointing update was "in stark contrast to what we expect to see from [Tesco's interim results] in October."

Down on the fledgling index, there was a severe lack of a party atmosphere around Luminar as the nightclub owner dropped over 30 per cent of its share price, dipping 1.48p to 3.15p. Reports emerged last weekend claiming the troubled company has discussed with its banks the possibility of a debt-for-equity swap.

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
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

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering