The Market Report: Chemring races up with its late show

Traders with half a mind on the weekend were shocked into action late in yesterday's session by news of a possible takeover. Chemring, the military equipment maker which has been down in the dogs recently, shot up by a third after announcing it had been approached by a potential admirer just as many in the City will have been eyeing the door at the end of a remarkably quiet week.

The group was on the climb for much of the day but it wasn't until about half an hour before the bell that bosses released a statement admitting it had received a "highly preliminary expression of interest" from the US private-equity giant Carlyle. This prompted punters to rush into the shares, and Chemring eventually closed a huge 101.3p stronger at 414.7p, although, following its recent weakness, that's still lower than where it traded back in March.

While the company had been touted by some as a possible takeover target before, talk strengthened recently in the wake of its admission in June that delays to US government contracts had seen its first-half profits plummet.

The subsequent share price fall persuaded the analysts at UBS to add Chemring to the broker's M&A Watchlist, with them suggesting it could be the subject of a leveraged buyout, a management buyout or "a takeover by a larger defence prime contractor", while bid speculation also did the rounds little more than a month ago.

It was not the only M&A activity in the Square Mile. Rival energy explorers Petroceltic and Melrose Resources revealed they had agreed to merge, with punters in the latter getting 17.6 shares in the former as well as a special dividend. In response, Aim-listed Petroceltic slid back 0.74p to 7.44p as Melrose edged up 1p to 136.5p on the small-cap index.

In the wake of Angela Merkel, speaking at a press conference in Canada, saying Germany would do "everything we can" to save the euro, the FTSE 100 finished the week on a high by advancing 17.91 points to 5,852.42.

The banks were playing a major role, and Lloyds was the top riser after climbing 1.24p to 34.22p while Barclays charged up 6.65p to 192.85p.

The miners were not so hot, with Eurasian Natural Resources (ENRC) one of those in the red after Nomura's Patrick Jones pleaded with it not to spin off its international assets. The Kazakh digger is considering a possible spin-off, with the theory being that it may close the discount at which it trades to its peers, but the scribbler argued such a move could in fact be "a de-rating catalyst".

Saying a spin-off "would have significantly higher geopolitical, execution, and financing risks than the parent", he reiterated his reduce recommendation on the stock as ENRC slipped back 2.7p to 369.7p.

Elsewhere on the Footsie, Pennon retreated 2.5p to 747p after the utility admitted trading at Viridor, its waste management business, had been tough lately. HSBC's response to the update was to cut its recommendation to neutral.

It is not just Apple devotees that are eagerly awaiting the iPhone 5. Tech firm Laird, whose electronic components are used in the smartphone, jumped 7.4p to 222.7p on the FTSE 250 after analysts from UBS turned buyers on the stock, saying the launch of the latest iPhone, which the chatter suggests could come next month , "should drive growth".

Another benefiting from broker support was Ophir Energy, which spurted up 20.5p to 531.5p. The recent weakness in the explorer's share price has created a "buying opportunity", argued Goldman Sachs' scribes, who also claimed "the quality of the company's assets should continue to encourage its M&A attractiveness".

There was some good news for Peter Jones. The Dragons' Den entrepreneur is the non-executive deputy chairman and 42 per cent shareholder of retailer Expansys, which was pushed up 0.12p to 1.18p on Aim after announcing its subsidiary PJMedia has won a contract to provide top-up services for Everything Everywhere, the joint venture between Orange and T-Mobile.

Travel
travel
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Jamie and Emily Pharro discovering their friend's prank
video
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
News
i100
Arts and Entertainment
O'Toole as Cornelius Gallus in ‘Katherine of Alexandria’
filmSadly though, the Lawrence of Arabia star is not around to lend his own critique
Life and Style
fashion
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

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Senior Project Manager

£60000 - £90000 per annum + Bonus: Harrington Starr: Global leading Energy Tra...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Oil & Energy Business Anaylst

£45000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Harrington Sta...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment