Market report: Wednesday close

By Mickey Clark for MailOnline
Updated: 06:54 EDT, 2 March 2006

BOC helped lead blue-chips higher today amid mounting speculation that Germany's Linde is at last prepared to put a firm offer on the table.

Shares in the industrial gases supplier climbed 37p to 1547p as more than sevenm changed hands, with City speculators convinced it will become the next British household name to fall under foreign ownership.

Linde made a tentative approach worth 1500p a share last month, but was sent packing by the BOC board. The Linde board is said to have been rushing around trying to obtain the financial backing for a higher offer during the past few weeks.

It is now expected to offer between 1600p and 1650p a share, which would be acceptable to the BOC board and value the business at up to £8.45bn. If the deal is successful, the enlarged company would be valued at £13bn. However, City speculators refuse to rule out the possibility, even at these high levels, of a counterbid from giant French gas supplier Air Liquide, which has a capitalisation of about £12bn.

The rest of the market managed to claw back some of yesterday's steep losses in thin trading. The FTSE 100 index, which had endured its biggest one-day loss since October, rallied 52.6 to 5844.1. It was matched by an opening rally for the Dow on Wall Street this afternoon which had been rattled yesterday by the warning on growth by internet search engine Google.

Vodafone rallied from a four-year low to trade 2¾p better at 111¾p following the emergence of bargainhunters. The mobile phones giant was this week forced to make huge write-offs and warn of a further shrinking of margins. British Energy continued to reflect on its return to profits with the price adding 7p to 624p.

GKN firmed ½p to 340¼p following yesterday's profits news. US broker Citigroup has raised its rating on the shares from sell to hold and lifted its sights from 260p to 335p. It says stable markets and the efforts of restructuring are 'coming to fruition' and provide an improving outlook for the company.

Full-year profit numbers from HBOS, down 44½p at 1017½p, failed to match those of rival Royal Bank of Scotland, which continued to attract support with a rise of 13p to 1921p.

Elsewhere in the banking sector, Barclays fell 10½p to 658p after suffering the curse of the fat-fingered trader. A line of am shares went through on the ticker at 600p - a considerable discount to the ruling price. The trade was later corrected.

Royal & SunAlliance dipped ¾p to 129¼p ahead of next week's fullyear numbers after being downgraded from in-line to underperform by US broker Goldman Sachs. It argues the shares are now looking expensive.

Michael Page, Britain's second-biggest recruitment agency, saw its shares fall 4¾p to 306½p despite reporting a 70% increase in pre-tax profits last year to £66.1m and promising to accelerate the pace at which it returns cash to shareholders. It generated £65.4m of free cash flow last year and spent £34m buying back its own shares. The company said all its businesses had produced record profits, particularly in Europe, where they had gone through the roof.

Recruitment specialist Work Group made its debut on Aim following a placing of 8.69m shares at 80½p by broker Altium.

A total of £7m was raised, and will be used to make acquisitions. Existing shareholders, including three board members, have sold a further 4.96m shares at the placing price. The shares opened at 84p before touching a peak of 90p. They later settled at 85½p.

Nervous selling left BioFuels nursing a fall of 12½p at 147½p. The company makes its living turning rapeseed into diesel fuel and only yesterday announced it had produced the first batch of biodiesel at its Teesside plant, the biggest in Europe. Delays in production have meant a helter-skelter performance by the shares, which are a firm favourite among hedge funds.

Builder Wilson Bowden fell 5p to 1487p after the company shrugged off fears of a house price collapse. It insists, however, that it remains too early to call the market in 2006. Chief executive Ian Robertson said he believes no one in the industry is now worried about the possibility of a late Eighties-style price collapse.

However, pricing uncertainty in a deal-driven market and the differing performance of the marketplace in southern and northern England are making it difficult for Wilson to predict the outcome for 2006. Bowden's pre-tax profits fell from £252.4m to £216.4m last year.