The Market Report: Spotlight on Ithaca as bid talk returns

  • @greentoby

Are punters prepared to risk their hard-earned cash on Ithaca Energy again? There were plenty of burnt fingers in the Square Mile last month after the North Sea explorer called an end to bid talks with a number of suitors having failed to agree a deal, but yesterday takeover hopes were being stoked up once more.

Speculation made a return, suggesting a possible bidder could be considering a hostile approach, with Korea National Oil Corporation (which in 2010 bought Scottish driller Dana Petroleum) the name in the frame.

Ithaca may have moved above 200p-a-share back in March, but – considering the stock has lost a third of its value in less than a month – market gossips claimed a potential offer from the Korean state-owned energy group could be priced around 190p.

Although plenty in the Square Mile believe Ithaca may at some point attract renewed attention, traders were sceptical over the latest rumours. Still, Ithaca ended up almost reaching 120p during trading off the back of the vague mutterings before moving back to 116p – a rise of 4.5p over the day – by the bell.

The takeover excitement was higher around Invensys. A subject of persistent bid rumours, a late surge saw it close a huge 54p higher at 257p on talk that US company Emerson Electric has expressed an interest in a possible move for the engineer.

The FTSE 100 stretched its winning run to a fourth session in a row as it shifted up 35.98 points to 5,622.29 to set another six-week high. Near the top of the leaderboard was Aviva, with the insurer driving up 12.5p to 279.1p on hopes the European Union may decide to gradually bring in new regulatory rules.

In the gold medal position, however, was Sage which rose 14p to 267.5p on the news the software group is entering into the Brazilian market by splashing out £125m for a 75 per cent stake in Folhamatic Group.

There was a big fall for Severn Trent, with the utility dropping 115p to 1,634p as it traded without the rights to a special dividend of 63p a share, while rival water company United Utilities (down 13.5p to 656p) was among the others losing their pay-out attraction.

Also in the red was Petrofac. The oil and gas services company retreated 57p to 1,455p despite being chosen, together with peer Schlumberger, as the preferred bidder for an oilfield contract in Mexico, days after reports it had won a $95m (£60.5m) contract in Iraq. However, there were some grumblings about Petrofac getting just one of the Mexican contracts despite six being on offer. Meanwhile, analysts from Canaccord Genuity cut their price target to 1,900p on fears over a lack of orders in its core engineering and construction unit.

Having been hit by a profits warning earlier in the week from France's Danone, Marmite-owner Unilever was off a further 13p at 2,062p thanks to bad news from another rival, Procter & Gamble, which slashed its growth forecasts.

England's victory against Ukraine on Tuesday night was being seen as good news for Sports Direct – according to its joint broker Oriel Securities, the retailer has bought stock on the assumption that Gerrard and co would make it to the quarter-finals.

"Management must be used to watching England games through latticed fingers, but the outcome was the right one last night," said Oriel's scribblers, as Sports Direct – founded by Newcastle United owner Mike Ashley, pictured – advanced 7p to 310p.

The supermarkets were likely to be also celebrating Rooney's header, with analysts from Shore Capital claiming "a welcome boost of sorts may be coming to stores across the English parts of the United Kingdom", as shoppers rush to stock up on frozen pizzas and lager ahead of Sunday's game with Italy. Sainsbury's and Tesco climbed 4.7p to 293.2p and 1.75p to 309.65p, although Morrisons – which was downgraded to "sell" by Shore – was pegged back 3.4p to 272.9p.

Meanwhile, ITV shrugged off the fact it won't be showing another England game unless the team reaches the final to jump up 2.25p to 76.5p, with the X Factor-broadcaster continuing to be helped by the return of bid speculation on Tuesday.

On Aim, impatient punters in Gold Oil waiting for an update on its search for a farm-out partner for the explorer's drilling in Peru, were told they will have to wait up to two months for more details, prompting it to dive 0.38p to 4.02p.