Market Report: Speculation rife about the future of O2

Who will buy O2? With BT, up 2.6p at 414.4p, set to snaffle up EE, speculation is rife about what will happen to rival network O2. Its Spanish owner, Telefonica, is said to be keen to exit the UK and reports at the weekend suggested Three’s owner, Hutchinson Whampoa, could be interested in merging the two. Yesterday Sky and TalkTalk were added to the list of potential suitors, with the Spanish press reporting that both were in discussions with Telefonica.

Analysts gave the news a lukewarm reception. Liberum said buying O2 would be a “leap into the dark” for Sky and would not address the problems facing the broadcaster. RBC’s Michael Bishop said a merger with TalkTalk would probably leave Telefonica with a sizeable stake in the new venture, an unfavourable position; while a sale to Hutchinson would be “a cleaner way out”. Sky dipped 2p to 926p; TalkTalk rose 9.8p to 325p.

The Footsie enjoyed another day of modest gains, rising 34.57 points to 6620.10. Traders remain reluctant to take up any large positions before tomorrow’s ECB meeting, which is tipped to herald the start of quantitative easing in the eurozone.

Glencore improved 9.75p to 257.45p thanks to HSBC’s backing. The bank has been stress-testing the commodity giant’s balance sheet to see how it would cope with a further fall in copper price and believes concerns are overdone.

Afren climbed as much as 5 per cent in early trade after reports that T5 Oil and Gas, the African start-up founded by former Tullow Oil executives, could be planning an £800m reverse takeover. But a sharp denial from T5 left Afren 1.86p lower at 25.79p.

Roman Abramovich raised his stake in gas-to-liquid fuel conversion specialist Velocys, up 0.25p at 133.5p. The Chelsea owner now holds 14.3 per cent of the business.

E-commerce software company ATTRAQT, up 1p at 54.5p, enjoyed a leap in activity on its platform during Black Friday and Cyber Monday. Transactions on the company’s Freestyle Merchandising platform rose 630 per cent on Black Friday, while the number of users was up 245 per cent.