Buyers trek to Enterprise

By Geoff Foster for MailOnline
Updated: 02:55 EDT, 13 July 2006

WHEN you are a small fish in a big support services pond, there is always a danger that a hungry competitor will come along and eat you. Dealers heard whispers that this will soon happen to Enterprise.

Shares of the provider of maintenance services to utilities and local authorities responded with a leap to 452p before they closed 24¾p better at 445p.

Turnover swelled to £8.1m as rumours of a £422m or 525p per share bid approach did the rounds. Alfred McAlpine and Balfour Beatty were both mentioned as possible bidders.

Enterprise was a founder member of Aim in 1995 and has grown through acquisitions. It was spun out from Lancashire County Council and started corporate life with good contacts among local authorities. Its order book now stands at £2bn and it has a strong bid pipeline.

Chairman and 9% shareholder Owen McLaughlin was appointed chief executive in April, replacing Jack McGrory.

Industry sources suggest he was forced out of retirement and would probably now be keen to broker a deal. Apart from the takeover speculation, sentiment was helped by news that fund manager Aegon Asset Management had bought a further 810,969 shares, increasing its shareholding to 4.6%.

Estate agents were sold after yesterday's Mail front page highlighted the increasing challenge to the introduction of Home Information Packs, due in June 2007. Apparently, more than 125 MPs have signed a crossparty Commons motion in an attempt to stop HIPs.

Broker Numis said that any delay to HIPs is bound to affect Countrywide, 17½p down at 469½p, and Rightmove, 14¼p lower at 367¼p. Meanwhile, mortgage lender Paragon shed 20p to 615½p.

The Footsie lost most of an early 42-point gain to finish only 3.3 points up at 5860.6. Caution became the watch word as rumours of an imminent £900m fundraising by insurer Aviva (10½p down at 713p) to help finance a £1.25bn bid for AmerUS did the rounds.

Wall Street did not help, falling 41 points at the outset, following news of a US trade gap widening to $63.8bn.

Mining stocks hit a rich seam as precious metal prices gained ground and Numis said that valuations appear undemanding. Global demand looks robust with few signs of a slowdown in China.

Xstrata soared 111p to 2132p after the broker lifted its target price to 2899p from 2777p.

Morgan Stanley raised its target price for Lonmin to a staggering £42 from £23, believing the platinum price will continue to rise. The miner jumped 126p to 2905p.

Tomkins rose 6¾p to 279p after US broking giant Goldman Sachs upgraded from sell to buy and set a target price of 350p. It says it sees scope for positive surprises on growth, while new contracts could overcome the expected weakness in US auto.

Almost 11m Medisys shares changed hands and the close was ½p dearer at 3¾p. Buyers were excited by news of £4.4m fundraising and its plan to transform into a active and strategic investor in healthcare opportunities.

Charles Spicer has been appointed chief executive and investor 3i will hold 23% of the enlarged capital.

Aim-listed marketing support services company Delling edged up ¾p to 10½p following an upbeat trading statement.

During the first six months of the current year it has won outsourcing contracts with McDonanld's and Northface in Norway, and the Bristol-Myers Squibb group across the Nordic region.

Still reflecting recent impressive results and a successful City roadshow undertaken by management last week, Rockhopper Explorations advanced 2½p more to 42½p.

Following publication of the new Energy Review and the Government's all clear for a wave of new nuclear power stations in the UK, Geiger Counter jumped 53/8p to 57½p. GC is the only fund dedicated to investing in companies involved in the uranium and nuclear power markets.

Data authentication company GB Group firmed ½p to 36½p on the bullish tenor of chairman John Walker-Haworth's agm address. Group revenues increased 14% in the first quarter and there is £6.6m cash in the bank.

SDL gained 10½p to 186p after announcing contracts to sell its Global Information Management systems technology into Dell and FedEx.

• SHAREHOLDERS of cash shell Readybuy (unchanged at 3½p) should have their patience rewarded tomorrow. Word is it will reverse into Avacta, a biophysics company, which is developing technologies for the rapid detection of toxins and viruses using laser and nano technology.

A deal could soon be on the cards with the Ministry of Defence who will trial a biological and chemical detection device this autumn.