Market Report: Takeover talk sees Chemring rocket

Bosses at Chemring may need to ready the defences, if the latest rumours are on the money. The military equipment maker shot up yesterday after speculation did the rounds suggesting it could become a target, the second time it has been circled by takeover talk in a week.

A late spurt left Chemring 12.6p higher at 290.4p as market gossips claimed a number of US companies, plus one from Europe, may be considering a possible move for the defence company.

The group has been the subject of bid rumours before, but the idea has been revived recently after its share price dived last month following its admission that profits have been hit by delays to US government contracts.

This prompted UBS to add Chemring to its "M&A watch list" a week ago, with analysts from the broker arguing that its "current valuation and relatively small market cap could facilitate a takeover by a larger defence prime contractor".

The stock was trading above 700p last year, but despite this, yesterday's speculation claimed a potential bid could be priced at up to 500p a share.

A number of voices in the Square Mile were unimpressed by the rumours, and while the jump in its share price showed some were attracted by the chatter, Chemring – which trades ex-dividend today – still closed 10 per cent lower than before last month's interim results.

Encouraging manufacturing and industrial data helped the FTSE 100 jump 36.74 points to 5,664.07p, while the top-tier index was also given a boost by a decent set of results the night before from aluminium giant Alcoa, which signalled the start of the US reporting season.

There were not many blue-chip fallers, but Compass was among them after the catering giant's French rival Sodexo announced sales growth had fallen thanks to cost-cutting by corporate clients.

Shore Capital's Greg Johnson warned the update was "likely to be a negative read-through for Compass", and the analyst was proved right as it dipped 13.5p to 656p.

Chip designer Arm Holdings powered down 15.4p to 480.5p in the wake of the news that Intel is snapping up a stake in Dutch tech group ASML. This, warned Liberum Capital's Janardan Menon, could give Arm's bitter rival an advantage in their ongoing battle for supremacy.

Also behind was GlaxoSmithKline, with the drugs maker declining 42p to 1,454p after UBS took a knife to its forecasts.

The broker was much keener on BAE Systems, saying that growth from the arms dealer's UK and international operations should "offset uncertainty surrounding the US budget". With the company also being supported by recent encouraging comments from the Government over defence spending in this country, by the bell it had shifted up 8.1p to 305p.

Speculation a merger between Mitchells & Butlers and Greene King could be a possibility continued to do the rounds. M&B – whose largest shareholder is Joe Lewis, the billionaire owner of Tottenham Hotspur – ticked up 1.8p to 252.3p, while Greene King advanced by 12p to 571p after Nomura's Tim Barrett raised his target price to 585p.

Meanwhile, the revival of take-over rumours late on Monday saw Afren jump 9.5p to 114.3p yesterday – the revived speculation put forward US giant Exxon and Italy's ENI as possible bidders for the oil explorer, although this is not the first time both names have been linked to such a move.

Having lost more than 9 per cent earlier in the week after being forced to deny reports it had breached its concession agreement with the Egyptian government, Centamin was trying to make amends. However, the company's announcement that its Sukari mine had managed to produce a record amount of gold over the second-quarter only saw it bounce up 1.9p to 68.4p.

Down on Aim, Gulf Keystone Petroleum climbed 1.75p to 209p. The Kurdistan-focused oil explorer is expected to reveal an update from its Shaikan 6 well soon, and traders were optimistic over the possible contents.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Sport
David Silva strokes home his and City's second goal
football
Arts and Entertainment
a clockwork orange, stanley kubrick
film
Extras
The Tesco Hudl2: An exceptional Android tablet that's powerful, well-built and outstanding value
indybest

News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricket
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drinkAuthor DBC Pierre presents his guide to the morning after
Life and Style
food + drink
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas