Things aren’t getting any easier for Serco.
The troubled outsourcer, which revealed on Monday that chairman Alastair Lyons is falling on his sword, fell 9p to 170p yesterday as Credit Suisse downgraded the company and more than halved its target price to 142p in light of Serco’s recent profit warning.
The bank warned of “huge uncertainty around the operational cash flows” and predicted no dividend until at least 2016.
The FTSE 100 surged 71.86 points to 6,750.76, a two-month high, after a surprise cut to Chinese interest rates sparked a rally among miners. The Government in Beijing wants to encourage spending to hit growth targets, which could bring a pick-up in demand for raw materials.
The City is learning the love Tesco again. First bears at HSBC and Bernstein said it was time to reconsider – now the heavyweight US fund BlackRock is ready to invest again. Tesco added 1.5p to 194.4p.
Ophir Energy has finally set out its offer for Salamander Energy. As expected, it’s an all-share affair valuing the South Asia-focused Salamander at 103p – well short of the 121p-a-share cash offer mooted by Cepsa, which fell through this week. However, Salamander inched up 0.5p to 91.25p.
Ophir investors were less keen, with news of two duster wells in Tanzania accompanying the offer update. The oil and gas explorer fell 10.1p to 170p, with scribblers at Liberum saying they “struggle” to see the logic of the deal.
Could EE buy TalkTalk? Berenberg bank’s Barry Zeitoune believes the mobile network has the most to gain from acquiring the X Factor sponsor, but says there is no hurry and it would pay to wait. The speculation came as Mr Zeitoune downgraded TalkTalk, off 10.9p at 282.5p, warning that the level of customer turnover at its TV division is “worrying”.
The embattled insurance outsourcer Quindell continued its recovery, climbing 17p to 70.75p. Investors are clearly hoping that the recent departure of chairman and founder Rob Terry will draw a line under the recent crisis, while short-sellers are also reportedly closing their bets.Reuse content