Market report: Thursday latest
Far from petering out, the number of leveraged buyouts is set to grow by at least £18bn in 2007. So says US broking house Goldman Sachs, which has been giving its naps for 2007.
According to Goldman, companies likely to be swept up by the tidal wave of private-equity money sloshing around financial markets are British Airways, 7½p dearer at 531¼p, engineer GKN, uflat at 279¾p, Carphone Warehouse, 2¼p firmer at 314¾p, housebuilder Persimmon, 2p cheaper at 1509p, recruitment specialist Michael Page, 2¼p higher at 449, mobile phone repairer CSR, 16p better at 660p, and Vanco, 2¼p stronger at 435½p.
Meanwhile, another company being tipped as a likely bid target for private-equity money is InterContinental Hotels.
It helped lead blue-chips higher for the second day in a row as the price added 13p to 1265p, and has risen more than 10% during the past week, with Permira and a Dubai consortium tipped to offer in the region of 1500p a share, which would value it at more than £5bn.
Share prices in London were marked higher at the outset, boosted by record-breaking performances overnight in New York and this morning in Hong Kong. But again, turnover levels remained at a low ebb as investors extended their seasonal festivities and this meant share prices were unable to maintain their early lead.
The FTSE 100 index was down 6.90 to 6238.3 after briefly touching 6258.7.
ICI set some of the early pace, rising 6½p to 451¼p, as folk continued to wake up to the fact that the Dulux paint maker could soon be a takeover target. The recent sale of its Quest subsidiary for £1.2bn has left the company virtually debt free and allowed it to tackle its pension deficit.
Speculators say Holland's Akzo Nobel, of Crown paint fame, may be tempted to make a move early in the New Year but may have to pay a substantial premium. The global coatings market is undergoing consolidation and the race is on for market share.
Royal Dutch Shell dipped 10p to 1802p following reports that Russia's Gazprom may have to pay the Anglo-Dutch group 37% less than earlier estimates had indicated to gain control of the Sakhalin-2 oil and gas project. This follows write-offs on the project totalling $3.6bn (£1.8bn).
The speculators were again nibbling away at that old takeover chestnut Rank Group, 4p dearer at 236¼p. Earlier this month, the group sold its Hard Rock Cafe chain for $965m leaving it to concentrate on its Mecca Bingo and Grosvenor Casino operations.
But the speculators argue this clearing of the decks is likely to attract interest from the likes of Permira. Even a Dubai-based consortium has been mentioned.
Support services group Mitie jumped 9½p to 252½p, drawing strength from positive comments by broker UBS. It has repeated its buy rating and driven up its target from 245p to 280p, claiming there is still scope for improvement.
It was the first day of trading on Aim for Cosmedia, a company specialising in television and new media advertising in China. A total of 45.6m shares were placed at $2.85 by broker Collins Stewart, valuing the company at $130.2m. The shares touched $3.08 before settling at $2.95.
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