Market report: Friday close

By Mickey Clark for MailOnline
Updated: 13:13 EDT, 28 April 2006

PENDRAGON'S 695p-a-share bid for rival Lookers ground to a halt on the hard shoulder, but many questions remain about the target's future.

Lookers' shares moved into top gear today despite the bid's failure, climbing 34p to 729p. Broker Numis Securities continues to rate them a buy with a target price of 888p, where they trade on a prospective price-earnings ratio of 16. Pendragon must now wait a year before deciding whether it wants to have another crack at its rival motor dealer.

One reason for the bid stalling was that Tony Bramall, of CD Bramall fame, this week snapped up 8.76m shares, or 24.4% of the company, and promptly threw his weight behind the Lookers management.

Even so, disgruntled shareholders, representing 21% of the vote, were happy to accept the terms and are presumably still on the register. Bramall's appearance on the register may have saved the day for Lookers' management, but they must now be wondering if they have welcomed a cuckoo into the nest. What are his plans for the future? Will he want to take a more active role in running the business or will he try to gain control?

Pendragon, up 9p to 605p, today told its shareholders that first-quarter trading had been in line with expectations, but it remained cautious about the outlook for the rest of the year.

Lookers' shares were changing hands at a mere 321p a year ago. How can its current rating be justified when the new-car market remains highly competitive and margins wafer-thin? Some brokers take the view that, in the current climate, the heady ratings sported by car dealers may be too high to justify - unless someone comes along and makes an offer.

By the close, the FTSE 100 was off 36.9 points at 6,023.1, its lowest level of the day, reflecting similar falls in the Far East today.

Share prices generally extended yesterday's heavy losses as investors continued to reel from the move by the Chinese to raise interest rates in order to put the brake on their booming economy.

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Trading in London remained on the low side, with investors happy to take profits that have recently accrued, while resisting the urge to open fresh positions ahead of the bank holiday weekend..

Mining and oil shares continued to come under the hammer as raw-material prices weakened following the Chinese move. Kazakhmys fell 29½p to 1138½p, BG 27p to 737p and Cairn Energy 31p to 2326p.

BBA slid to 8½p to 262½p after the aviation services group admitted it has been unable to sell its Fiberweb materials arm. And no surprise - the company admitted in a trading statement that Fiberweb is finding life challenging. BBA has now decided to spin it off as a separate, London-listed firm at the end of the year, so long as business has not got any worse.

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Satellite broadcaster BSkyB shed 52p to 525½p as it emerged it had won the first three packages that make up the Premier League football television rights. Brokers say they are worried the group has won packages containing the less attractive fixtures and that the better packages have gone through to the second round of the auction. There had been hopes that BSkyB would have bid for all six packages and then sold on the least attractive to other bidders such as Ireland's Setanta.

The cost of polluting the environment and adding to the problem of global warming has got less. The price of carbon emissions traded under the EU's emissions trading scheme has slumped more than 55% during the past week.

The price was on the slide again today, losing a further 50 cents to e13.50 per tonne, which is bad news for the carbon trading specialists such as Trading Emissions, down 6½p at 151½p. However, rival AgCert International managed to apply the brake, firming 2p to 251½p. This week's market newcomer, Camco International, fell 1 ½p to 79p.

Pharmaceuticals giant Glaxo-SmithKline continued to benefit from yesterday's betterthanexpected first-quarter profits numbers with a rise of 24p to 1556p.