Market report: Thursday close
CITY speculators were raising a glass to Mitchells & Butlers, the country's second-largest pubs chain, after it rejected an offer of 550p a share from property tycoon Robert Tchenguiz's bid vehicle R20.
M&B reacted to confirmation of the 'soft' offer with a jump of 34p to 497½p. The price has come up from a low of 392½p since the end of February. The terms, which value M&B at £4.6bn, have not even been acknowledged by the pub chain's chairman Roger Carr, who said: 'I only consider offers if they are made formally and in writing.'
Tchenguiz has the backing of Apax and HBOS for the equity side of the bid. Barclays Capital and HBOS will provide the debt.
The FTSE 100 recovered from an earlier dip, to show a rise of 28.6 at 6029.4 as trading slowed to a trickle before the Easter getaway.
Oil shares gave back some of their recent gains as the price of crude weakened. BG fell ½p to 742p and BP slipped 3p to 688p.
Mining shares also ran into profit-taking after scaling new heights earlier this week on the back of record metal prices. BHP Billiton fell 10p to 1124p, Anglo American 27p to 2366p and Rio Tinto 32p to 3060p.
Lady Luck shone on shares of online poker player PartyGaming as it led blue-chip companies higher and began nudging back towards record highs. The price advanced 6¾p to 151¾p with the company's own broker, Dresdner Kleinwort Wasserstein, repeating its buy recommendation and 190p target price ahead of Tuesday's key performance indicators.
DKW says it is looking for revenue growth year-on-year of 46% at $324.8m (£185m), driven by strong poker growth and the blackjack clickthrough. Despite impressive revenue growth and solid margins, the shares continues to trade on a price-earnings ratio of 16, which the broker feels exaggerates the likelihood and impact of prohibitive US legislation.
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Rival broker Numis has also repeated its buy recommendation for PartyGaming and raised its sights from 159p to 201p. It says its intelligence suggests trading continues to be strong at PartyPoker, aided by the introduction of the integrated platform and shared purse. Numis has also increased its 2006 pre-tax profit forecast from $706.7m to $738m.
Chemicals giant ICI firmed 6¼p to 360¼p after broker JPMorgan Cazenove raised its rating on the shares from in-line to outperform, saying the positives now outweigh any concerns. Reuters, up 5¾p at 376p, was being pushed by broker ABN Amro. It has a buy recommendation on the shares and a 450p target.
Oil and gas group Melrose Resources stood out with a jump of 50½p to 397p. It has signed a deal to buy out its joint-venture partner in Egypt by purchasing Houston-based Merlon Resources for $265m cash. The deal will make tens of m
Melrose is paying $9.40 for each barrel-of-oil-equivalent for Merlon's proven and probable Egyptian assets. The purchase also secures Merlon's onshore assets in Texas. The Melrose offer trumps an existing bid from Canada's Centurion Energy, which has now withdrawn from the race.
It was the first day of dealings on Aim for The Mission Marketing Group, a regionally-based advertising and marketing specialist, following a placing of 12.3m shares by broker Seymour Pierce at 120p. The value of the company at the placing price is £24m. The shares began life at 125½p. At the same time, the group has completed the acquisition of Bray Leino, the marketing communications specialist.
Elsewhere on Aim, shares of Cradley Group were suspended at 4.50p pending clarification of the company's financial position. It is putting its Cradley Print division into administration.
Mobile phone repairer CSR jumped 65p to 1265p after broker UBS lifted its target price from 1250p to 1450p and reassured the City that first-quarter profits would meet expectations.
RAB Capital firmed 2p to 87¾p after Belgium-based Sofina picked up a further 10.2m shares at 85p, stretching its total holding to 40m shares, or 9.17%.
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