Market Report: Return of Ingenico bid talk pushes Sage up
Friday 03 December 2010
There was plenty of bid speculation for investors to get their teeth into yesterday, as talk re-emerged about Sage potentially making a play for the French company Ingenico following rumours earlier in the week.
Market gossips were talking up the chances of a potential offer of between €32 and €34 a share being made for the payment solutions group, with the online auction site Ebay also said to be taking a look.
Sage itself made 18p to 289p after receiving a positive broker response to its full-year results, released Wednesday, with Numis upgrading its advice on the company to "add".
There was also some reheating of gossip involving Compass as, for the second time in two days, Edenred rose on the NYSE Euronext thanks to chatter that it is in the crosshairs of the contract caterer; its share price increased by 16.5p to 585p.
GlaxoSmithKline was another name being talked about as looking to make an acquisition, after reports emerged that the pharmaceutical company is edging towards a purchase of the Chinese Nanjing MeiRui Pharma for $100m (£64m).
The British group edged up 10.5p to 1,241.5p after the news, although it wasn't helped by the US Food and Drug Administration which ruled that GSK could not make the claim that its drug Avodart reduces the risk of prostrate cancer.
The index was topped by GKN, as the engineering group made 15p to 210.4p following vague talk of it being sized up for a takeover, although there were few details on the identity of the supposed bidder. The company was also helped to the leaderboard's summit by figures from the States showing a rise in car sales.
Just behind it was Tui Travel, after its chief executive refused to comment on speculation that its majority stakeholder, Germany's Tui, may bid for full ownership.
Also contributing to it surging forward 15.6p to 230p was the release of its full-year results. The figures showed a forecast-beating operating profit of £447m, up 11 per cent year on year, although the company did urge caution for 2011's prospects.
Overall the FTSE 100 made 125.06 points, finishing on 5,767.56, as the president of the European Central Bank, Jean-Claude Trichet, said it would maintain its bond purchase programme. However, some were disappointed that further measures were not revealed.
Capital Spreads' Angus Campbell noted that the FTSE 100 has now regained more than half of November's losses already this month, and added that "not even slightly worse-than-expected US initial jobless claims could pour cold water on [yesterday's] rally."
One of the stocks investors were drawn to was African Barrick Gold, after the miner – which climbed 12.5p to 552p – revealed that it had come across more seams in Tanzania. The company will now extend its North Mara site underneath the two original open pits in an effort to reach an estimated 370,000 ounces of gold, and it said that further drilling in 2011 is expected to increase this figure to more than a million ounces.
The mid-tier index had some acquisition news of its own yesterday, thanks to reports that Premier Foods is in discussions with Nestlé over selling its Quorn range to the Swiss giant. The meat-substitute brand has only been in the possession of Premier Foods – which rose 2.02p to 18.56p – since 2005, and a figure in the region of £230m was being talked about yesterday.
Marston's was toasting strong full-year figures with the pub group revealing a 4.6 per cent growth in profits. Altium Securities called the results "commendable", and said that "were it not for the very recent snow disruption we would be tempted to nudge numbers up today".
The broker reiterated its buy advice, which investors took as Marston's was bumped up 6.3p to 106.9p. The market was also responding well to news from Cable & Wireless Communications, as it struck a $210m (£135m) deal to buy 51 per cent of Bahamas Telecommunications Company.
The purchase should go through in the first quarter of 2011 and will mean the telecoms company – which booked gains of 2.62p to 46.99p – can expand in the Caribbean.
Among the small-caps, JJB Sports dropped by more than 20 per cent as it slid 1.04p to 4.74p. The retail sports chain was deserted by investors after saying that it is likely to break the terms of its £25m loan with the Bank of Scotland.
Messageboard favourite Desire Petroleum had good news for those avidly watching its progress, with the explorer saying it had struck oil off the Falkland Islands for the second time this year.
The news led it to shoot up 26.25p to 132.25p, with Evolution Securities saying that "initial indications are that the thickest section has good porosity which bodes well for any future flow test and therefore commerciality of the field" as it raised its advice to "add".
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