Market report: Friday close

 

The battle for control of Corus, 1p cheaper at 505p, looks like hotting up. Word coming out of Mumbai today was that India's biggest steel producer, Tata Steel, may be prepared to dig deep and offer as much as 550p a share.

Tata directors met yesterday and are already talking to bankers such as ABN Amro, Credit Suisse and Deutsche Bank about ways to raise the necessary funds.

Tata's current offer of 455p a share for the Anglo-Dutch steelmaker has been trumped by Brazil's Companhia Siderurgica Nacional's indicative offer of 475p, valuing the business at £4.3bn. Brokers say if CSN does bid at that level, Tata will have to raise an extra £157m just to match it.

CSN is racing to complete due diligence and hopes to make a firm offer by 4 December. Tata remains tight-lipped about what was discussed at yesterday's board meeting and willwait until CSN makes a firm proposal before making its next move.

The company has poured cold water on speculation that it plans to issue preference shares to its parent company to pay for any deal.

Share prices generally were on the slide in light turnover as the market struggled to digest the tailendof several large programme trades and a two-cent drop in the value of the dollar against sterling. That left the FTSE 100 index nursing a loss of 17.9 at 6122.10.

New York continued to feel the effect of yesterday's Thanksgiving as investors took the opportunity to extend their weekend break.

Credit rating agency Experian, recently demerged from GUS, fell 12.5p to 600.50p as brokers disagreed about prospects for the company. Citigroup has begun coverage with a sell and a 580p target.

It is unimpressed with the 8% return on capital employed. By contrast, Credit Suisse has an outperform rating with a 700p target. It says Experian offers the opportunity to buy into a well-established, core consumer business with market-leading positions.

WS Atkins continued to reel from yesterday's news of losses at its London Underground maintenance subsidiary Metronet with the price losing 5p at 836p.

Barclays shed 7½pp to 691p after Morgan Stanley lowered its price target from 860p to 840p but repeated its overweight stance. MS has also cut Lloyds TSB, 7p off at 554½p, from overweight to equalweight and reduced its target from 611p to 575p.

A profits warning left Clean Air Power nursing a loss of 5½p at 77½p. The group, which converts trucks to run on a combination of diesel and natural gas, says profits for the full year will fall below expectations. It blames a drop in sales.

Property outfit Development Securities, down 3p at 640p, is to tap investors for £23.1m via a placing of 3.7m new shares at 625p brokered by Collins Stewart. The group needs the cash to fund its share of a £33.5m purchase of the 10-acre Curzon Park site in Birmingham which it and partner Grainger Trust, 6p down at 647p, hope will be worth £350m.

Aim-listed FuturaGene, unchanged on 61p, is buying US outfit CBD Technologies for £3.02m, satisfied with the issue of 6.67m new shares to broaden itspresence in the forestry and paper industries. FuturaGene is in the business of genetically modified crops.

FTSE INFORMATION

Check out the latest data and updates from the stock market.

AT A GLANCE GUIDE TO TODAY'S MARKET...

BANKING AND FINANCE

Morgan Stanley has gone sour on Lloyds TSB and Barclays. Analyst David Williams downgraded Lloyds to equal-weight from overweight with a target of 575p. The US broker cut the target at Barclays from 860p to 840p.

BUILDING AND PROPERTY

Construction group MJ Gleeson continues to trade less than 20p above its low for the year. Nonexecutive chairman Dermot Gleeson has bought 10,000 shares at 360p, taking his holding to 950,159, or almost 2% of the company .

CONSUMER

Citigroup has repeated its buy rating on Enterprise Inns and jacked up its target from 1000p to 1340p. It is confident the pub chain can deliver double-digit earnings growth through lower interest rates and more pub disposals.

ECONOMICS

The Bank of England's monetary policy committee, which sets interest rates, is to be investigated by the powerful Treasury Select Committee of MPs a decade after it was created by Chancellor Gordon Brown. The committee will look at its past ten years.

ENGINEERING

Defence specialist Chemring says full-year profits should match City expectations and is upbeat about prospects for 2007. The company's broker, Investec, has repeated its buy rating and says both divisions are enjoying improved margins.

HEALTH

The threat of competition for its best-selling heart drug Toprol XL dragged AstraZeneca. CMC Markets says Novartis has launched its generic version of the treatment in the US, and Par Pharmaceutical has launched an authorised generic.

INDUSTRIALS

Games Workshop chairman and chief executive Tom Kirby has topped up his holding in the company, buying 142,000 shares, worth almost £500,000, at 350p each. It stretches his holding in the company to 2.04 million, or 6.6%.

LEISURE

Credit Suisse has begun coverage of bookie William Hill with an underperform rating and a 580p target. It says the company will struggle to grow next year and the management may be tempted to bid for Rank, which would destroy 130p-a-share of value.

MEDIA

Goldman Sachs is worried about BSkyB's need to invest to cope with competition and about the returns that can be achieved from its broadband venture. It has slashed its target price from 640p to 540p and remains neutral on the shares.

NATURAL RESOURCES

Shell Canada plans to spend C$4bn (£1.8bn) on capital projects next year as it ramps up a major expansion of its oil sands projects. Itmay also build a refinery in Ontario. A final decision will be made in two to three years.

RETAILING

Rose Foster, who quit fashion group Monsoon last week, is to be chief executive at underwear chain La Senza, bought by Lion Capital in July. Speculation is that Monsoon founder Peter Simon wants to buy out the group's international stores.

SUPPORT SERVICES

VT Group, best-known as a warship builder, has signed a £25m deal to oversee the £290 million regeneration of 13 secondary schools in the borough of Greenwich. VT is also chasing contracts in Lewisham under the Better Schools for the Future programme.

TECHNOLOGY

The contract to fit video surveillance on the next generation of Underground trains has been awarded to Canadian technology company March Networks by Metronet's 20% shareholder Bombardier, also of Canada.

TELECOMS

Vodafone is due to update investors and analysts on its emerging markets businesses on 6 December. Sales growth outside Western Europe is 20 times faster than inside. Citigroup has upped its price target to 143p-147p.

LEISURE

Qantas chief executive Geoff Dixon today said he has not spoken to the Macquarie Bank-led consortium considering a £4.2bn bid for the airline, and that people should 'take a cold shower and settle down'.

UTILITIES

The Government's sale of its shadow stake in British Energy will not happen until at least 2008, says Collins Stewart. The broker believes the Treasury will not be able to test the market for its 64% holding until the state of the group's troubled reactors is better known.