Market Report: Springer sale puts focus on Informa
Thursday 20 June 2013
News of a €3bn (£2.6bn) takeover of a German publisher yesterday pushed punters towards Informa. The world's second-largest publisher of scientific research journals, Springer Science + Business Media, has been bought by the private equity firm BC Partners.
Springer Science, which has been sold by EQT and the Government of Singapore Investment Corporation, has long been seen as a good fit with the publisher Informa. Springer is a rival to the Anglo-Dutch group Reed Elsevier, and Informa has been linked with the group for years.
Informa and Springer have been involved in numerous takeover chats over the past 10 years. Springer bid for Informa in 2006 and Informa made an offer for Springer in 2009, but no deal could be agreed. Investors decided the BC Partners deal could mean future bid activity in the sector, and Informa produced a 17.4p gain to 495.1p.
Fellow UK mid-tier publisher UBM was also up. The shares advanced 18p to 685.5p, which coincided with a note from analysts at Liberum Capital who recommended buying the stock. Liberum said UBM has "drifted off over the past month", and is down by around 10 per cent in that time, but offers a "structurally growing, attractive business that is attractively valued". Its analysts gave it a price target of 890p.
Across the wider market, uncertainty remained ahead of a statement, due out after the London market closed, by the US Federal Reserve chairman, Ben Bernanke, on stimulus measures. The FTSE 100 index declined 25.39 points to 6,348.82, with miners and banks both losers.
Some bad news for Australians was deemed good news for the City as a jobs cull in Perth by Rio Tinto pushed the shares up in early trading – bucking the trend of other mining stock.
The iron ore miner said it had laid off about 50 senior staff at its regional headquarters in Western Australia. The job losses are part of a cost-cutting and restructuring plan started last month by Andrew Harding, Rio Tinto's new head of iron ore and replacement for Sam Walsh, who has become chief executive.
Brenda Kelly, senior market strategist at IG, said the fact Rio was cost-cutting by getting rid of senior staff made it "attractive". Iron ore prices hit an eighth-month low last month but have since picked up, and the rise in iron ore prices could also be a reason to buy the stock, analysts suggested.
Elsewhere, Citigroup added Rio to its list of preferred stocks. But by the close the digger had joined all the other mining and financial stocks that were out of favour amid concerns of global economic uncertainty, and Rio finished 10.5p worse off at 2,800.5p.
Top of the pile on the benchmark index were consumer goods groups, with Tesco up 8.7p to 344.6p and the Johnnie Walker whisky owner Diageo 39.5p better off at 1,925.5p.
BAE Systems got a boost from chat about new contracts at the Paris Air Show for a second day. But it was also the subject of vague rumours that a merger with EADS could end up back on the cards, despite it being denied by EADS yesterday. BAE soared 7.6p to 403.3p.
ITV's purchase of US television producer Thinkfactory Media helped the broadcaster to gain 1.4p to 139.1p. ITV has paid $30m (£19m) for a 65 per cent stake in the group, which makes reality, entertainment and drama shows.
The generator giant Aggreko got the wooden spoon after admitting its profits could be flat this year. The temporary power supplier's spark went out as it lost 92p to 1,660p.
Back on the mid-tier index, Spirent Communications advanced 5p to 135.4p after a buy note from Bank of America Merrill Lynch, which has begun covering the company.
The software firm Micro Focus was buoyed by hopes it will begin buying up other companies. It also reported rising profits, and the shares rose 62.5p to 709.5p.
On Aim, the retail investor favourite Gulf Keystone Petroleum said it had started drilling at its Shaikan field in Iraq, but the shares slipped 0.5p to 151.5p.
The Aim tiddler MediaZest said it had paid down debt, and forecast that full-year results will be about the same as last year. The digital "out-of-home" advertising company has proposed a share placing to raise about £360,000 and the shares ticked up 0.03p to 0.22p.
The security consultant Falanx will start trading tomorrow, having raised around £595,000 on Aim.
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