Yesterday's trading: Erinaceous mauled

By Geoff Foster for MailOnline
Updated: 09:13 EDT, 4 October 2007

Hungry bears mauled property services group Erinaceous amid growing speculation that the highly indebted group will soon announce a sizeable share placing at a significant discount to the market price to help fund yet another acquisition.

It made no less than six acquisitions in 2006. The shares were sold down to 306p before closing 9¼p lower at 314p and have now fallen from 380p in January.

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News of the fraud investigation at support services group Alfred McAlpine (136½p down at 477p) also dragged Erinaceous lower. This time last year it was about to be hit by a police and Serious Fraud Office investigation into an alleged £10m mortgage fraud at Dunlop Haywards, one of its subsidiaries. The mud always sticks.

It was particularly embarrassing because Erinaceous's board houses several senior figures from the business and political worlds.

Lord Razzall, the Liberal Democrat spokesman on trade and industry, and Lord Poole, previously chief executive of Lloyd's insurer Ockham Holdings and one time member of former prime minister John Major's policy unit at Number 10, are both directors.

Chief executive, founder and 8.6% shareholder Neil Bellis, desperately needs to reassure shareholders. The pressure is on him to pen a bullish statement to accompany the results in a fortnight. Numis was appointed joint broker in January and must have persuaded clients to get involved. Some obviously did and have watched the stock move sharply south.

Confirmation of KKR and Texas Pacific's £22bn leveraged buyout of TXU Corporation, the largest power producer in Texas, and continuing speculation about imminent private equity bids for such household names as Sainsbury (2p better at 526½p) and EMI (4¾p up at 246¾p) kept the UK equity market in fine fettle.

Impressive trading results from constituents AB Foods (37½p up at 845p), Persimmon (49p higher at 1473p) and Old Mutual (6p dearer at 187½p) also helped the Footsie gain 33.2 points more to 6,434.7. The FTSE 250 improved 12.4 points to 11,612.4 and the FTSE 350 15.3 points to 3,387.5.

Utilities sparkled on the TXU news with Scottish & Southern Energy closing 30p up at 1518p and International Power 5¼p at 84½p.

Almost 142m BP shares changed hands and the close was 10p better at 545p. Buyers appeared as the oil price rose to near $62 a barrel on the growing tension in Iran and cold weather in the Northeast of America. There was also a vague story doing the rounds that Chevron is casting an eye over the UK oil giant.

Buying ahead of the full-year results on March 2 helped UK Coal climb 28½p more to a record 517p. The owner of what remains of the English coalfields is expected to accompany the results with news it has received planning permission for its disused Prince of Wales colliery site in Pontefract, West Yorkshire.

The firm's 50,000 acres of land, one of the biggest brownfield portfolios in the country, is in the books at £274m, but could be worth in excess of £800m with planning permission.

SVG Capital added 17p at 897p after UBS upgraded to buy from neutral. The broker expects further value growth from the private equity sector in the year ahead, with realisations at good prices and earnings growth being key drivers of net asset values.

PartyGaming touched 43p but closed unaltered at 39¾p after broker Morgan Stanley placed 123m shares ahead of Thursday's results. Rival online gaming group Sportingbet firmed 2¼p to 43p in anticipation of tomorrow's interim results.

Property group Northacre soared 12¼p to 47¼p on a bid approach. Goals Soccer Centres, the operator of 22 five-a-side football centres, scored a 12p gain at 357½p following excellent annual results. Pretax profits leapt 78% to £4.7m on a 43% rise in sales to £16m. The dividend is kicked 90% higher to 0.95p.

The KBC Peel Hunt sales desk forecasts 54% growth to pretax £7.3m and earnings per share of 11.2p in 2007. It advises clients to buy and hoisted its price target to 390p.

Following a placing by Arbuthnot Securities of 30m shares at 100p a share, Aurum Mining rose 7p to 124½p. Cash raised will help fund the construction and commissioning of the open-cast mine at the Andash Zone 1 gold and copper project in the Kyrgyz Republic.