Market Report: Takeover talk switches investors on to ITV
Thursday 30 June 2011
Takeover rumours were back on the schedule for ITV last night, as chatter that the broadcaster could be in line for an approach turned it into the stock to watch.
The home of The X Factor and Britain's Got Talent spurted forwards 4.45p to 71.95p after vague speculation – played down by traders – did the rounds that it may soon receive a bid worth between 110p and 120p a share.
It is not the first time ITV has been talked about as a possible target, but its attractiveness has seemingly grown in recent months given the fact that its share price has dipped more than 25 per cent since the start of March. The private equity groups Permira and KKR were among the names being mentioned yesterday as possible aggressors, alongside Europe's largest commercial broadcaster, RTL, all three of which have been linked to ITV before.
As investors' optimism over the vote on the Greek austerity measures was proved correct, it looked as if the FTSE 100 was going to dip back on profit taking in the second half of the session. However, a late surge resulted in the top-tier index climbing 89.07 points to 5,855.95 by the bell, meaning it has added nearly 160 points this week alone.
The developments in Greece helped Icap to take pole position after the interdealer broker was bumped up 42.3p to 478.8p. Oriel Securities' Keith Baird said the passing of the vote meant markets were "going to become more active again, and Icap's profits will benefit indirectly", while the group was also helped by a vague smattering of bid speculation.
Many of the blue-chip miners were also stronger, with Antofagasta 62p ahead at 1,365p and Eurasian Natural Resources rising 38p to 770p. However, Glencore eased up just 0.2p to 486.55p despite a range of positive comments from City scribblers. Citigroup, Morgan Stanley, Liberum Capital, UBS and Credit Suisse were allowed to publish research for the first time on the commodities trader after being involved in its float last month, and all five decided to give it a "buy" rating.
Also failing to see a major move up was ARM Holdings, which crept forwards 5p to 594.5p after Morgan Stanley's analysts cut their recommendation on the chip designer to "equal-weight" from "overweight". Saying they were "still believers in the long-term story", they added that it "might be time to take a breather on the stock given the strong absolute and relative share-price performance this year."
Its mid-tier rival Imagination Technologies was also lacklustre, easing up just 1.7p to 376.7p, despite Goldman Sachs' keeping the group as one of its "conviction buy" stocks, saying it "remains in a prime position to profitably capitalise on high-growth end-market opportunities such as smartphones and tablets".
Bwin.party was pushed up on the FTSE 250 following reports Full Tilt Poker, one of the online gaming group's major competitors, has had its licence suspended by the Alderney Gambling Control Commission. The group increased 15.2p to 148.2p – a jump of more than 11 per cent – as vague speculation also emerged that both it and William Hill, up 2.3p to 225p, could make a move for the Alternative Investment Market-listed gambling company 888, which put on 0.25p to 33.75p.
Elsewhere in the sector, bid chatter was also doing the rounds about Sportingbet, which received an approach from Ladbrokes last week. According to the tale, the bookmaker, which gained 1.3p to 149p, is supposed to have put forward a price of 75p a share. However, the small-cap gaming company – which closed 4p ahead at 54p on the small-cap index – is said to be holding out for 90p a share.
The gold-medal spot on the mid-tier index was occupied by Charter International after the equipment manufacturer rebuffed a $2bn approach from Melrose, which ticked up 12.3p to 357p. Charter's move forwards of 172p to 787p moved its share price back above the levels it was at before last week's profit warning.
After shedding nearly 14 per cent on Tuesday following another profit warning, Cable & Wireless Worldwide (CWW) managed a partial rebound of 2.63p to 47.63p as analysts argued over whether the dramatic fall had boosted its bid chances. JP Morgan Cazenove said CWW was being "increasingly viewed as [a] possible take-out target or break-up story", adding that therefore the "further downside [was] limited".
Evolution Securities' Steve Malcolm, however, claimed private equity interest was "unlikely" given the telecommunication company's "poor visibility, falling revenues and limited cost-cutting potential", adding that its network and enterprise channels "need further investment, making CWW an expensive acquisition for low-returning UK [mobile] operators".
Down on the small-cap index, Lookers lost nearly 18 per cent – retreating 12.5p to 57p – after the car dealership confirmed its takeover discussions with a consortium led by Jack Petchey's investment vehicle Trefick had come to an end without a bid being made.
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