Market Report: Electrocomponents and Premier Farnell subject of intense merger speculation

The City rumour mill was buzzing as investors piled into two embattled electronic parts distributors.

The FTSE 250 company Electrocomponents, which surged 25.4p to 214.9p, and Premier Farnell, which rose 3.25p to 111p, were the subject of intense merger speculation.

Earlier this month, Electrocomponents admitted that business was tough, stoking rumours that it could be forced into a deal with Premier Farnell, which has also been under the cosh.

Go Investment Partners has built a 5.5 per cent stake in Premier Farnell over the past few months and it is thought the activist investor will push for a full merger, with Electrocomponents seen as the obvious partner.

The FTSE 100 finished the week on a high, up 41.34 at 6,416.16, meaning it has now put together eight straight days of gains.

Beaten-up mining stocks continued their rally to help the Footsie to its best week in four years.

Anglo American topped the blue-chip index, up 49p at 726.5p, while Glencore leapt 8.45p to 129.1p after revealing plans to cut its zinc production by a third. That helped the price of the industrial metal soar as much as 12 per cent.

However, Goldman Sachs warned investors not to get ahead of themselves: “The decision by Glencore (and others) to shut mines is a reaction to reality, not a reason to get bullish.”

Mid-cap miners including Vedanta Resources, 64.5p better at 594.5p, and Kaz Minerals, up 13.2p at 147p, were also in favour.

Electra Private Equity closed up 75p at an all-time high of 3,400p after the investment trust sold its 23 per cent stake in Zensar Technologies, an Indian IT business, for £84 million. That came amid calls from the New York-based activist investor Ed Bramson, who owns 29.8 per cent of the stock, for two seats on its board.

Admiral accelerated 35p to 1,565p as car insurance premiums rose 4.8 per cent in the third quarter – the biggest increase since 2010.

The online marketing company Adgorithms crashed 77p to 49p after a huge profit warning just four months after floating on AIM at 133p – an update described by the stockbroker Peel Hunt as “truly horrific”.