Yesterday's trading: French fizz-up Britvic

By Geoff Foster for MailOnline
Updated: 02:40 EDT, 26 July 2006

MATTERS are coming to a head at Britvic. Shares of the struggling Tango and Robinsons soft drinks group fizzed 9½p higher to 215p as speculation intensified about an imminent £537m, or 250p-a-share cash bid from French private equity firm PAI Partners.

PAI's financial adviser Credit Suisse First Boston's remit is apparently to ensure that an offer is tabled before early August, when the customary French exodus to the beach and country gets under way.

Three profit warnings in three months left Britvic's management with a severe credibility problem and the loss-making group wide open to a bid.

Health-conscious consumers have abandoned carbonated soft drinks in favour of fruit juices and water.

Britvic is in dire need of developing new products to revive sales but will be swallowed before it gets the chance.

Drinks giant Pepsico holds 5% of Britvic. It has a change-of-control clause written into bottling contracts with the company. Whispers suggest it could trump any offer from PAI and Britvic's eventual take out price could be in the region of 280p a share.

There was a spring in the Footsie's step as it drew strength from Wall Street's overnight surge of 182 points.

Shrugging off mildly disappointing figures from BP (3½p off at 630p), it closed 17.3 points higher at 5851.2.

The Street of Dreams drifted 51 points lower in the early stages after profits from United Parcel Services fell way short of expectations, reigniting fears that economic growth may be slowing.

Former British Steel group Corus rose 14p to 419¾p amid revived Russian takeover talk.

British Airways jumped 11¼p more to 384¼p after broker Morgan Stanley upgraded to equal weight, saying investors should now focus on the operational performance of the airline rather than on labour and regulatory issues.

Drugs group Shire Pharmaceuticals gained 24½p to 852½p after the US Food & Drug Administration said it had approved Elaprase, its treatment for a rare and possibly fatal inherited disease called Hunter Syndrome. The group reports second-quarter figures on Friday.

Awaiting confirmation of its £400m purchase of Union Bank, Pakistan's sixth-largest lender, Standard Chartered, rose 26p to 1349p. Buying UB would make Standard the biggest foreign bank in Pakistan, with 100 branches in 24 cities.

Struggling broadcaster ITV traded above a quid again, closing 1½p better at 100½p.

Beleaguered boss Charles Allen kept schtum about his future. Shareholders want to see the back of him.

Heart 106.2 radio group Chrysalis played a happier tune at 109p, up 7p.

Dresdner Kleinwort advised clients to tune in, saying given the value of its music publishing catalogue, the recent fall has been overdone. Owner Chris Wright's wife Janice, also bought 10,000 shares at 108p.

Fantasy war games retailer Games Workshop mashed the bears with a 36¾p advance to 327¾p.

Investors took heart from a maintained final dividend of 14.025p and chief executive Tom Kirby's reassuring comments that the business is returning to growth.

Full-year profits had slumped 73% to £3.7m on revenues 16% lower at £115.2m.

Software and computer services minnow Pixology disappointed shareholders by stating the board has rejected all bid approaches and will continue as an independent company. Together with an uninspiring trading statement it left the close 5p cheaper at 28½p.

Biofuels Corporation, which operates the largest bio-diesel plant in the UK on Teesside, plummeted 17½p to 118½p after annual results to the end of March 2006 showed a widening loss of £72m.

Broker Ambrian is a seller, believing the only way Biofuels can survive in the long run is with a long-term refinancing, and JP Morgan Cazenove has been appointed for this task.

Further equity financing will leave the company saddled with massive interest payments for years to come.

Persian Gold sparkled at 19½p, up 3p, following a bullish update on the Chah-e-Zard gold project in Iran.

Europa Oil & Gas firmed 1¾p to 25½p after its Bilca-2 well in Romania showed commercial gas.

Punch Taverns rose 7p to 900½p after chief executive Giles Thorley bagged £10.5m from cashing in 1.5m share options with an exercise price of £1.98.

• RESPONDING to news of an exclusive trading agreement with Virgin Digital to design and supply digital music, video players and accessories, which will be marketed under the Virgin Digital brand, Designer Vision edged up ¼p to 8⅜p.

The launch of the new players is planned for later this year in both Virgin outlets and other major retailers. It follows a £10m Toys R Us contract announced in April.