Market Report: Shire backed as bid target after offer for ERT rival

Shortly after Sanofi-Aventis confirmed rumours of its $18.5bn bid for Genzyme, the market was looking at other potential pharma targets. One big UK-listed name in focus was Shire.

Paul Diggle, an analyst at Ambrian Capital, said there was an obvious comparison between Genzyme and Shire, as their ERT – enzyme replacement therapy – businesses lead the market. Shire's ERT sales are expected to jump 45 per cent for 2010 to $800m, while he predicts Genzyme's will fall 2 per cent to $1.7bn.

Mr Diggle said: "We would be very nervous about a direct 'read across' from the Genzyme bid to Shire's valuation. However, its ERT business is a very attractive asset and the rest of the business is also growing strongly. This offer should at least be a reminder that Shire is one of the most attractive acquisition targets in the healthcare mid-cap arena." Shire's shares rose 4p to 1,406p.

Top of the blue chip risers was Arm Holdings, whose chips are used in Apple's iPad, following Intel's $1.7bn acquisition of Infineon's wireless unit. The 8.5 per cent rise follows Intel's indication that it will continue to use the Arm chip designs used by Infineon, while Lee Simpson, analyst at Jefferies, added: "Today's reaction is generally around the fact there's a potential M&A cycle happening, and one of the clear architectures you'd want in this space is probably Arm's." However, he cautioned. "It's erroneous to think anybody would buy it, however, because it comes with a lot of traps in the valuation." The shares closed up 29p at 366.9p.

Also up was Reckitt Benckiser. The household goods maker, with products including Cillit Bang and Vanish, received approval from the US Food and Drugs Administration for its suboxone sublingual film – basically a quick dissolving treatment for opiate addiction. The news released by its pharmaceutical arm helped the group add 78p to close at 3,266p.

Packaging group Bunzl issued results yesterday that were well received by the market. It beat forecasts with pre-tax profits of £125m in the first half of the year, sending the shares up 9p to 711p.

On the downside, Serco Group, the outsourcing specialist that does everything from running Australian prisons to the Docklands Light Railway, slumped after Bank of America Merrill Lynch withdrew its support. This comes a week after the company's shares jumped nearly 3 per cent off the back of strong results. The group fell 15p to 582p as the broker downgraded the stock to "neutral" from "buy" ahead of the Government's spending review in October. As the central government accounts for half its revenues, the review "is likely to be perceived as negative," it said, adding UK organic growth may well slow this year and the first half of next.

It was a mixed day for the miners as they fell initially with the metal prices. But most recovered, with Randgold Resources the pick, up 155p to 6,080p. Eurasian Natural Resources Corporation remained in the red, giving up 8.5p to close at 848p. The falls were possibly prompted by uncertainty over whether duty on metals in its homeland of Kazakhstan could be introduced, after a similar move announced by the Finance minister over crude oil.

Following on from a drop on Wall Street during the UK's bank holiday and then the Nikkei overnight, the FTSE 100 fell in the morning for the first time in three sessions. It was dragged lower by the initial weakness in the miners. Yet it recovered after lunch following the release of the latest US consumer confidence data. The better-than-expected numbers eased fears the economy would slip back into recession, helping to drive a recovery in London and sending the FTSE 100 up 23 points to 5,225.

On the second tier, UK pharmaceutical firm BTG fell shortly after announcing it was to pay Nycomed US up to $16.6m for the US rights to market its anti-poison drugs. CroFab is an anti-venom for the unfortunate victims of rattlesnakes, while DigiFab treats overdoses of heart-disease drug dioxin. Shares in the group were 4.6p lower at 201p.

Back up was Connaught, the troubled social housing group, whose share price had tumbled since it revealed it would make a loss for the year and rumours emerged that creditors were circling. The group has joined the 90 per cent club since June, plunging from 300p to less than 20p. It rebounded by 2.45p yesterday to 16.4p.

In the wider market, investors liked the sound of UTV Media, as the economic recovery and the World Cup helped drive up revenues, especially at its TalkSport station. News the group had reinstated its interim dividend helped push the stock up 7p to 113p.

Penny stock The Weather Lottery rose after signing a deal with Scottish football champions Rangers. News of the move to provide a full package of online betting and lottery to the club's fans saw shares close 0.25p up at 1.25p.

On the downside, knitwear group Dawson International slumped 5.8 per cent to 2p after it said pre-exceptional operating profits for the full year would be lower than last year due to increased commodity prices. Also down was Omega Insurance Holdings, a Bermuda underwriter, which reported a first half loss following the earthquake in Chile and the BP oil spill. The shares were down 0.5p to 90p.

News
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
ebooksAn unforgettable anthology of contemporary reportage
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
i100
Sport
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
boxing
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments