Market Report: Takeover talk swirls around Arm Holdings

With the top-tier index bouncing last night after plummeting nearly 6 per cent over the previous three sessions, an old favourite made a return as market gossips suggested once again that Arm Holdings may be in line for an approach from the US.

The chip designer is a regular subject of bid chatter, and yesterday vague rumours reemerged claiming both Oracle and Intel could be mulling over an approach, with a possible price mentioned of 750p a share.

That would represent a large premium to its current share price, but it would be less of a difference than the 2,550p a share the US technology giant Hewlett Packard agreed to pay for Autonomy, with that deal prompting analysts last week to reexamine Arm's takeover potential.

There was even speculation the possible price for Arm could go higher, thanks to a suggestion that Apple, which uses the group's technology, may wish to get involved if others make a move. However, traders refused to give much weight to the chatter-chatter, and neither did investors as Arm edged forwards a mere 2p to 492p.

Those hoping for other technology stocks to follow Autonomy – which advanced 34p to 2,486p – in being snapped up received a blow as Micro Focus announced discussions over a possible takeover of the software group had ended. There had been plenty of talk that such a result was likely, but it dropped 9p to 254p on the mid-tier index nonetheless, although Northland Capital Partners' David Johnson said he still believed the "cash flows associated with the business means that it remains a target for private equity".

After dropping more than 300 points over three straight days, the FTSE 100 managed to power up 54.54 points to 5,095.3 as the prospect of the Libyan conflict coming to an end boosted a number of the oil companies. Both Royal Dutch Shell and BP operated in the country before civil war broke out, although despite the former rising 35.5p to 1,919p, the latter only ended up 0.3p ahead at 390.2p.

Meanwhile, Petrofac shot forwards 43p to 1,211p, thanks in part to speculation a conclusion to the fighting could provide the oil services group with numerous opportunities, while its interim results also beat expectations.

Another updating the market was Essar Energy, but the power company slipped 9.8p to 247.9p despite announcing an 80 per cent jump in its first-half pre-tax profits after it admitted problems with getting regulatory approval meant a number of its projects were facing delays.

There was no respite for the banks, as they once again finished among the major fallers. Royal Bank of Scotland took the wooden spoon, losing 1.1p to 19.67p, and Lloyds Banking Group and Barclays retreated 0.82p to 27.56p and 4.25p to 146.25p respectively.

As well as the long standing concerns over the eurozone debt crisis and ring-fencing proposals, the sector was also knocked by Deutsche Bank cutting its rating to "neutral", with the broker noting recent measures such as the ECB buying bonds have failed to stop the banks underperforming. Meanwhile, some in the City were suggesting the short-selling ban on financial stocks in Italy, France, Spain and Belgium may mean investors are shorting the UK banks instead.

Also among the stragglers was Burberry, which eased back 15p to 1,191p after a bearish note on the luxury retailers by Bank of America Merrill Lynch on the potential consequences of double dip recession.

The market may generally have been on the move up, but that did not stop gold prices climbing yet again as the yellow metal continued to set new highs, with it even coming close to breaking the $1,900 an ounce level.

Citigroup raised its gold prices forecasts for next year from $1,325 to $1,650 an ounce, citing a number of factors including S&P's recent downgrade of the US debt rating and the sovereign debt situation in Europe. The broker also said Randgold Resources – 260p stronger at 6,870p – remained its favourite among the gold producers while it changed the rating of Petropavlovsk to "buy", as the mid-tier miner put on 45.5p to 779p.

Elsewhere on the FTSE 250, Invensys jumped 9.5p to 231.2p in the wake of reports the engineer – often the subject of takeover talk – could attract an offer from Siemens. Also ahead was IG Group, with the spreadbetter lifted 15.8p to 409.4p after raising its revenue forecast.

Meanwhile, Greggs eased forwards 3.1p to 475.9p as investors did not seem particularly convinced by Espirito Santo's claim that the high street baker was not facing an "immediate threat" from the recent expansion of its competitor Poundbakery.

Down on the Alternative Investment Market, the mobile software group Parseq soared up 29.73 per cent, or 1.38p, to 6p after announcing an approach had been received from a "potential offeror" headed up by its chief executive Rami Cassis.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
Katie Hopkins makes a living out of courting controversy
General Election
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Ashdown Group: Head of Client Services - City of London, Old Street

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders