Dealers reach for Sky on Murdoch rumours

By Geoff Foster for MailOnline
Updated: 04:26 EDT, 17 May 2006

IT all kicked off at BSkyB when buyers got stuck in on the back of a rumour that media tycoon Rupert Murdoch will soon either increase his stake in the satellite TV broadcaster or take complete control.

Turnover swelled to a hefty 64m as the shares raced ahead to 559½p before closing 17p higher at 545½p. News Corporation owns 37.7% of BSkyB, which Murdoch chairs. His son James is BSkyB's chief executive.

Analysts pooh-poohed the idea of a buy-out. One said: 'News Corp is looking to bring an initial public offering of Sky Italia shares to market so its unlikely it would make a corporate move on BSkyB at the same time.'

BSkyB recently secured the bulk of Premiership football rights until 2010. The market did register some disappointment that it has had to shell out 28% more - £1.3bn over three years - than last time for only two thirds of the matches.

However, next month's World Cup in Germany will whet the appetites of its 8.1m subscribers to upgrade to High Definition TV, the biggest revolution in TV for years.

Sky HD will give customers a cinema like experience in their own home with much clearer, more vibrant pictures and Dolby Digital sound quality. It surely will be a 'must have' system for football fans. The one-off cost of a HD Box is £299 and subscription is £10 a month.

Not for the first time in recent weeks, punters were sweet on Cadbury Schweppes. The chocolate, chewing gum and fizzy drinks group jumped 17p to 537p on revived US takeover speculation.

US rivals Kraft Foods and Hershey were again mentioned as possible bidders, but recent speculation has also suggested that Warren Buffett's Berkshire Hathaway has acquired a small undisclosable stake in the company. Cadbury's agm takes place tomorrow, but analysts are not expecting any fireworks.

Tobacco giant BAT was puffed 26p higher to 1366p by late news that a US jury has voted in favour of Reynolds American in a key lawsuit. BATs owns 42% of Reynolds following the merger of the firm's Brown & Williamson business with RJ Reynolds in 2003.

Alliance Unichem rose 24½p to 933p and Boots gained 12p to 734½p after Deutsche Bank gave its blessing to the planned merger, saying it makes both strategic and financial sense.

Drugs giant AstraZeneca advanced 50p to 2900p as the City gave the thumbs up to its £700m or £13.20p a share acquisition of Cambridge Antibody Technology.

The Footsie regained some composure after Monday's hefty bout of profit-taking. Encouraged by Wall Street's overnight recovery of 45 points, it traded 41.9 higher at one stage but drifted to finish only 4.9 points up at 5846.2.

The Dow yesterday eased 12 points at the outset despite producer price data which showed a smaller-thanexpected inflation reading at the core level.

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But there was no respite for mashed miners which took another hammering. As precious metal prices moved sharply south again, Xstrata fell 107p further to 2101p, Anglo American 67p more to 2215p and Rio Tinto 61p to 2967p.

Spanish peer Endesa's excellent full-year results and consideration of the sector's safe-haven status helped utilities climb. Scottish & Southern Energy sparked 24p higher to 1141p, while British Energy gained 9½p to 670p and National Grid 7½p to 568p.

Razorback Vehicles accelerated 2p to 6½p after entering into a five-year agreement to supply wheelchair lifts to Australian taxi network MACT Franchise Pty for an undisclosed sum.

Futuragene firmed 1p to 58½p after entrepreneur Iraj Parvizi bought a further 355,500 shares, increasing his shareholding to 10.1%.

Nutraceutical company Provexis rose 1¼p to 8¼p on news that its lead product, Sirco, will be endorsed by and published in leading scientific journal, American Journal of Clinical Nutrition.

Scott Wilson, the international consultancy, improved 1p to 213½p after saying trading for the year to end April 2006 is slightly ahead of market expectations sat at the time of the IPO in March.

• SELF-STORAGE company Big Yellow gained 12½p to 415p after Evolution upgraded to buy following excellent results. Pretax profits soared 62% to £12.6m but the revaluation gains vastly exceeded the broker's wildest expectations, delivering a book value increase of £106.2m. With plenty of development profits and further revaluation gains to come, the target price has been lifted to 500p.