Market Report: Whitbread takes top spot on Premier merger talk - Sharewatch - Business - The Independent

Market Report: Whitbread takes top spot on Premier merger talk

Rumours that Premier Inn may yet merge with rival Travelodge helped take Whitbread to first place on the FTSE 100 leader board yesterday.

Market speculation in March had suggested Whitbread, the hospitality group which owns the Premier Inn budget hotel chain, was close to acquiring the Dubai International Capital-owned Travelodge, a rival hotel chain. At the time, Whitbread said that "whilst there were preliminary conversations between the parties, these discussions have now ended".

Last night's rumours suggested the two parties had resumed talks, reigniting investor's hopes for a deal. The chatter helped Whitbread to put on 27p to 1,145p.

Elsewhere, British Airways was depressed by a new note from Morgan Stanley, whose analysts revised their rating for the stock to "under-weight" from "equal-weight", slashing their target price to 120p from 245p.

"We see further near-term risk to earnings from operational difficulties at T5 [Terminal 5 at Heathrow Airport], slowing premium travel, increased competition from Open Skies on the transatlantic routes and possible labour disruptions," the broker said. "Although [BA] states that long-haul premium traffic is holding up well, we are concerned about the longer-term impact of job losses in the banking industry, with around 30,000 jobs already cut since August and 10,000-20,000 jobs forecast to be cut in 2008."

The negative assessment took British Airways down 8p to 215.5p, to fourth place on the FTSE 100 loser board.

Overall, the FTSE 100 continued to slide, losing 63.9, or 1.1 per cent, to 5,831.6. The London benchmark was weak all morning, dragged down by Friday's losses on Wall Street and other world markets. An unhappy update from the Dutch conglomerate Royal Phillips Electronics and from the US bank Wachovia also dampened investor sentiment.

The FTSE 250 shed 85.9, or 0.9 per cent, to 9,845.5.

The banking sector was weak after weekend news reports suggested Bradford & Bingley may issue new shares to raise capital. While the FTSE 250-listed lender denied the rumours, weak sentiment kept its stock in the red at 165.5p, down 1.75p.

Other banks were also off-colour, including Alliance & Leicester, down 8.75p at 480.25p, Barclays, off 9.25p at 443.75p, Lloyds TSB, which was 12p weaker at 421p, and HSBC, which fell 14.5p to 840p. HBOS bucked the trend, gaining 6p to 513p as bargain-hunters bought the stock.

Miners were weak as metals prices eased off highs yesterday. Xstrata slumped 125p to 3,731p, while Anglo American shed 102p to 3,221p. Rio Tinto was down 78p at 5,822p and Kazakhmys fell 43p to 1,655p.

Vedanta Resources lost 15p to 2,350p. Retaining its underweight rating for the stock, Lehman Brothers said that despite "some positives", good news was already priced in to the shares. "On our estimates, Vedanta is trading at a significant premium to its peers and its own sum of the parts valuation," the broker said.

On the FTSE 100, Friends Provident lost 10.8 per cent, or 14.1p, to 116.5p after JC flowers, the American private equity firm which submitted a 150p-per-share takeover proposal to the company earlier in the month, said it did not intend to increase its offer. Flowers added that if Friends Provident failed to enter into talks by the end of this week, it intended to withdraw its proposal.

On the FTSE 250, Great Portland Estates, the central London property investment and development company, soared to an intra-day high of 498.25p on the back of stake-building rumours. The speculation was borne of a report in the Israeli financial press that Delek Group, a subsidiary of the Tel Aviv-listed Delek Real Estate Limited, was in talks to buy a controlling stake in the one of the five largest income-producing property companies in the UK.

According to the Globes newspaper website, the target's largest shareholder owns only 9 per cent of the company, leading traders to focus on Great Portland Estates, whose largest shareholder has an interest of 8.94 per cent. By the close, Great Portland had eased to 475.75p, up 3.75p.

The engineering group Charter was down 16.5p at 842.5p after Goldman Sachs removed the stock from its "conviction buy" list.

"Following a period of strong performance, Charter's share price has appreciated to within 10 per cent of our target price," the broker said. "Consequently, although we make no change to our positive fundamental view of the stock, we are removing Charter from our 'conviction buy' list." Goldman retained its "buy" rating on the stock.

On AIM, Nautical Petroleum was up 0.57p at 9.07p after 5 per cent of its shares were sold at a 47 per cent premium to their closing price on Friday. International Energy Group sold the stake to Korea's Shincheon for £7.926m, or 12.5p per share.

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
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

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week