Market report: Wednesday close

By Mickey Clark for MailOnline
Updated: 12:51 EDT, 14 June 2006

COULD it turn out to be a case of any port in a storm for the losers in the battle for control of Associated British Ports?

US investment bank Goldman Sachs today threw down an offer of 810p a share, or £2.5bn, for the operator of 21 major UK ports, but the shares shot up 50½p to 827½p after a consortium led by Australia's Macquarie raided the stock.

City speculators now calculate that the loser in the struggle for AB Ports may take consolation and turn its attention next to Forth Ports, which responded to the mutter from the gutter with a jump of 26p to 1707p. Forth is capitalised at £784m at those levels.

The huge surge in world trade on the back of the booming Chinese and Indian economies means port operators are all the rage, as we saw from Dubai Ports World's recent acquisition of P&O, and Peel Ports' £771m offer for Mersey Docks earlier this year.

Another attempt at halting the stock market's recent slide ended in failure today. Traders were encouraged by overnight rallies in the Far East, where a buyers began targeting stocks that were looking oversold. The FTSE 100 index was down 12.8. to to 5506.8.

Lloyds TSB was the best performer among blue-chips with a rise of 12p to 515p. Broker Morgan Stanley has raised its rating from equalweight to overweight and set a target of 611p, saying there are stronger operating trends at the bank than the City gives it credit for.

The smell of burnt fingers wafted around the market place as shares of Spirent slumped 6p to 37½p after a shock profits warning. The communications specialist said firsthalf profits at its Performance Analysis division would be down £4m at £6m, and that would not be recovered in the second half.

Broker Citigroup downgraded its profit estimates for the second time in two months while repeating its hold rating and 50p target. It has downgraded earnings per share before interest, tax and various write-offs from 1.7p to 1.3p.

Spirent shares are widely held because it has cash in the bank and is seen by many as a potential takeover target. It may be even more vulnerable now, but any offer is likely to leave the speculators out of pocket.

Trains and buses operator Stagecoach firmed 3¾p to 101¾p. Morgan Stanley has raised the shares from underweight to overweight with a target of 114p and says the company will win the South West Trains franchise this autumn following the withdrawal of National Express and GNER from the bidding. Rival Arriva was up 13p at 516p while First Choice was 9¼p better at 216¾p.

BAE Systems dropped 3¾p to 345p. Brokers say the amount it receives for the sale of its stake in Airbus Industrie may be affected by the production delays of up to seven months incurred on the Airbus's A380 super-jumbo. These are expected to cost Eads about £342m a year between 2007 and 2010.

Bid target House of Fraser closed unchanged at 135p after its latest trading update showed a 2.4% decline in like-for-like sales in the 19 weeks to 10 June. That compares with a 1.3% fall in the first seven weeks of the period.

The department stores group, which also owns Jenners and James Beattie, was last week on the receiving end of a £351m bid from Icelandic raider Baugur.

DCD Media firmed 0.03p to 1.18p after the Aim-listed company won the contract to make a featurelength television film of the children's classic Wind in the Willows for BBC1.

It will star Bob Hoskins as Badger alongside Matt Lucas as Toad. The project will add £3m to DCD's turnover, and filming has already begun in Bucharest.