Market Report: Speculation leads to one big step for Man Group
Wednesday 22 June 2011
The rumour mill turned its attention back towards Man Group last night, as reheated speculation that the world's biggest listed hedge fund manager could be a target helped it to surge up the blue-chip index's leaderboard.
The company, which has been the subject of similar talk before, rose 9.1p to 230.6p following the emergence of vague chitter-chatter suggesting a number of US groups could be mulling over a move. The Bank of New York Mellon was linked with Man last year, and yesterday JP Morgan was a name being discussed, with talk a possible bid may reach as high as 400p.
The group received another boost from bullish comments made by its chief executive, Peter Clarke, who revealed late on Monday that Man's net inflows for the second quarter were already ahead of the previous three months and that it was aiming to triple its assets coming from the US within the next five years.
Overall, the FTSE 100 was driven forward 81.92 points to 5,775.31, with investors seemingly upbeat ahead of last night's vote of confidence on the Greek government. The bounce took the top-tier index off its lowest level since March, helped by cheerful news from the States, where the latest housing data showed existing home sales had dropped less than predicted.
Expectations were low ahead of Whitbread's interim management statement, but the Costa Coffee owner ended up taking the top spot with an increase of 102p to 1,587p after it said its coffee chain's sales had risen 4 per cent over the first quarter. Also impressing was its Premier Inn unit, which managed to recover from a disappointing Easter and royal wedding period to see its sales grow 3 per cent, helping InterContinental Hotels to advance 30p to 1,197p.
BP spurted up 16.05p to 445.7p after agreeing a settlement with Weatherford International which will see the Swiss oil services group pay the energy giant $75m over its role in the Gulf of Mexico disaster. Evolution Securities welcomed the news, saying the announcement would increase the pressure on other companies involved in the tragedy, while BP was also given a boost by a rise in oil prices.
The decision by ING to upgrade its advice on Wolseley to "buy" helped the builders and plumbers merchant to shift 81p higher to 1,965p, despite the broker predicting the group will lose market share in the UK to Travis Perkins – up 15.5p to 1,011p – following its merger with BSS. Instead, said ING's analysts, Wolseley is likely to focus on the States, where the "housing market offers a buying opportunity... with US sentiment at the peak of negativity and the first signs of improvement".
SABMiller was drowning its sorrows at the foot of the blue-chip index, moving 79p to 2,103p after its A$9.5bn (£6.2bn) approach for Foster's was rejected. Espirito Santo was not keen on the idea, saying that – even if the offer had been accepted at that price – "it is very, very difficult to see how... the deal would be value-enhancing for SABMiller's shareholders".
Guardian Stockbrokers' Atif Latif was more positive, however, arguing that "with the growing demographics of the Australian market [Foster's] will create a sound fit", though he did warn that the Grolsch brewer would face competition.
The recent speculation that Misys has been in the sights of an aggressor was confirmed yesterday after the software company revealed it had entered into takeover discussions with an unnamed group following an approach. The US companies SunGard and FIS were among the names being discussed by market voices as possible bidders, and – with Charles Stanley's Tom Gidley-Kitchin suggesting an offer could end up as high as 460p a share – the group climbed 34.4p to 418.9p, meaning it has added more than a third of its share price since the start of May.
A number of its peers were ahead as a result, as Numis Securities' David Toms said that if "a bidder is prepared to entertain talks at [Misys' valuation] for a software business struggling to deliver 5 per cent top-line growth, then almost every other mid- and large-cap software name... must be a clear 'buy'." The analyst specifically mentioned Aveva and Fidessa, lifted 31p to 1,700p and 25p to 1,955p respectively, as well as Autonomy, which put on 53p to 1,741p after its chief executive said it was continuing to enjoy a recovery.
The bid spotlight was also on 3i as it soared up 6p to 272.9p after Oriel Securities' Iain Scouller said the private-equity group "appears increasingly vulnerable to a bid approach". Suggesting potential buyers could include the existing management or a rival private-equity firm, the analyst reiterated his "buy" recommendation, adding that its current share price provides "an attractive entry level".
Down on the Alternative Investment Market, Playtech was bumped up 15.25p to 335p after signing a deal with the California Online Poker Association. The agreement means the gambling company is re-entering the US market, which it left in 2006 when online gaming was banned.
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