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London afternoon: Bid spec enlivens quiet day
Wed, 08 Feb, 2012
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London afternoon: Bid spec enlivens quiet day
Mon, 23 Aug 2010, 13:49:00
Leading stocks came off the top over the lunch time session though risers still outnumber fallers among FTSE 100 constituents by about five to one. Top of the list of risers is <b>Old Mutual</b>, the Anglo-South African insurer that's overhauling its business following the financial crisis. The company has received a bid from <b>HSBC</b> for a controlling stake in Nedbank Group, South Africa's fourth largest banking group. Old Mutual is a majority owner of Nedbank, currently worth almost $10bn, with a 52% stake. HSBC is looking to acquire up to 70% of Nedbank's shares through an offer to all Nedbank shareholders. Old Mutual said it has had preliminary discussions with the South African regulatory authorities about the merits of the transaction, but they'll still have to mull over the details. Elsewhere in the insurance sector <b>Aviva </b> and <b>Prudential </b>move higher as traders look around for the next candidates for mergers & acquisitions activity. Bid talk is hitting the share price of South African brewer <b>SABMiller</b>, however. There is talk in the market that the company is interested in buying Fosters, the Australian brewer of the eponymous fizzy yellow alcoholic beverage. While the market awaits for the dust to clear on the indecisive general election result traders have decided that a coalition government should make it less likely that the controversial mining tax will be introduced. As a result, <b>Rio Tinto</b> and <b>BHP Billiton</b> see some demand for their shares. Others in the mining sector are also in demand, most notably <b>Fresnillo </b>and <b>Anglo American </b>but <b>ENRC </b>is a laggard. <b>Sainsbury </b>is attracting a bit of interest on whispers the Qatar Investment Authority could use its 25% holding as a springboard for another crack at the supermarket chain. Fellow food retailer <b>Marks & Spencer</b> has confirmed that Robert Swannell, a former banker, is to be its new chairman. Oil and gas services group <b>Petrofac</b> is wanted after it posted a 55% jump in half year earnings and said it expects to deliver like-for-like net profit growth for the full year. Earnings before interest, tax, depreciation and amortisation rose to $321.3m in the six months ended 30 June compared with $207.5m last time. Panmure Gordon described the results as "a very strong set of numbers with underlying net income of US$206.3 million, compared to our forecast of US$192 million," though it stuck with its sell recommendation for Petrofac, while Charles Stanley has downgraded the shares to "hold" from "accumulate" after their recent good run. The response to sector peer <b>James Fisher</b>'s result was not so enthusiastic. The marine services firm posted a 4% hike in half yearly pre-tax profit after strong profit at its specialist technical unit. The group, which supplies lifting equipment and submarine rescue, also raised its interim dividend by 5%. <b>Bovis</b> plans to resume dividend payments at end of the year after swinging to a half year profit. However, the housebuilder also remains cautious in its expectations of transaction volumes and sales prices in the short term given the low levels of consumer confidence and the ongoing challenges in the mortgage market. A combination of the UK winter freeze, the earthquake in Chile, Windstorm Xynthia and the Deepwater Horizon disaster plus lower investment returns knocked first half income at underwriter <b>Hiscox</b>. The shares moved higher, however, even though management said competition remains fierce despite the increase in major catastrophes. <b>CSR</b>'s fight over alleged patent infringement with US giant Broadcom continues with the US firm filing a motion in California to add additional patents. In a statement, CSR said all the additional patents had already been asserted previously by Broadcom in its International Trade Commission against SiRF before it was taken over by CSR. Residential property firm <b>Grainger</b> said its recently acquired Sovereign Reversions subsidiary has formed a joint venture with Moorfield Real Estate Fund II. Moorfield is paying Grainger £17.5m for its 50% stake in the joint venture, which is half the price Grainger paid for Sovereign Reversions. Energy conserving building solutions provider <b>Kingspan</b> has restored interim dividend payments after reporting its first profit growth in three years. The group will pay an interim dividend of 4c per share. Operating profit is up 9% in the six months ended 30 June to €33.1m. Biometrics and surveillance software firm <b>RCG</b> revealed a decline in interim profit and issued a cautiously optimistic outlook for the second half. Shares in <b>Coms</b>, which provides telephony services such as video and voice conferencing, jumped after it announced the launch of an application that enables users of its internet telephony service to control their account from their iPhone . <b>Future</b>, the publisher responsible for magazines like T3, Total Film and Guitar World has handed the reins of its UK business to Mark Wood, the former boss of news service ITN.
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