Yesterday's Trading: Icap's takeover feeling

 

Everything may be up for grabs in this takeover-crazed market but punters who chased Tory boy Michael Spencer's Icap sharply higher on takeover hopes are barking up the wrong tree.

There was plenty of blue on dealers screens as rumours of a £7-a-share bid approach for the world's largest interdealer broker helped the shares climb 14½p to 493p on a meaty turnover of 8.6m. Spencer founded the group in 1986 and his 21.7% stake is worth well in excess of £700m.

An Icap spokesman said: 'We never comment on market rumours.' His tone suggested it was probably a big hedge-fund ramp. He was also dismissive of recent speculation that Spencer, the new Conservative Party treasurer and one of its biggest donors, is looking to devote more of his time and efforts to politics and could therefore be willing to sell Icap at the right (generous) price.

Sure, he is close to leader David Cameron and his shadow chancellor George Osborne, but he is only a willing supporter and is just only too happy to look after party funds.

Meanwhile, Icap has been a major beneficiary of the recent rollercoaster performance of Forex Markets. Daily electronic broking volume exceeded £500bn for the first time on two successive trading days this month.

Another firm to have cleaned up during the recent general market shenanigans is spread-better IG Group, 10¼p better at 295p.

Dealers have been dreaming about consolidation in the heavyweight banking sector for years so the weekend 'leak' that Barclays (5½p off at 677p) is in merger talks with Dutch giant ABN Amro had them licking their lips in anticipation. Could this be the start of a banking takeover boom? That mouthwatering prospect lifted the Footsie 58.8 points to 6,189.4.

Wall Street soared 124 points in early dealings as multi-billion-dollar deals helped dealers forget about the sub-prime lending crisis and whether or not the Fed will raise US interest rates tomorrow.

Private equity group Clayton Dubilier Rice agreed to pay £2.5bn for support services group ServiceMaster. Rumours were also rife of a possible counter to the mammoth £23bn private equity offer for energy group TXU.

Lloyds TSB, the cheapest and weakest major bank with the tasty dividend yield, rose 14p to 548p. A report suggested it could sell its share registration and stock management business to LINK for about £600m. Diehards are still convinced Scottish Widows will be sold in the summer. International bank Standard Chartered rose 33p to 1428p.

Stock market information

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Financial data - newspaper and pen

Buying ahead of today's results left Friends Provident 8p better at 202p. FP recently reported strong full-year new business figures but also revealed that 52%-owned F&C would be cutting its dividend in 2007.

Hopes that activist hedge funds led by ToscaFund will force the insurer to break itself up left Prudential 26½p up at 708p.

Still awaiting bid terms from the CVC-led private equity consortium, Sainsbury edged up 1p to 557p. Meanwhile, Iranian entrepreneur Robert Tchenguiz continues to nibble away, increasing his shareholding to 4.04% from 3.95p. His presence on Mitchells & Butlers' shareholder register prompted more speculation that he could be about to bid and the close was 26½p higher at 759p.

Private equity takeover speculation and talk that tomorrow's annual results will please helped Kesa spark 18p higher to 356p. Evolution advised clients to buy because it believes its French electricals business Darty had a 'knock-out' January and because Kesa has underperformed the other property plays in the retail sector. It was eyes down for a full house at Rank as the shares rose 10½p to 239¾p on speculation that Chancellor Gordon Brown will exempt bingo from VAT when he wheels out his final Budget tomorrow.

Stratex International firmed 5/8p to 105/8p after announcing its highest grades to date from the ongoing resource drilling programme at its Inlice gold project in Turkey.

Video surveillance company Coe Group jumped 8p to 47½p. It will partner top security firm ADT to conduct a trial of its X-Net V1 analytics and scene analysis software for detecting graffiti. The trial will take place at London's Clapham Junction railway station.

Anzon Energy zoomed 11p higher to 87½p after its Australian subsidiary signed a 15-year gas sales agreement with Alinta Ltd.

Confirmation of a bid approach let drinks company Nichols sparkle at 304½p, up 21p.

Staffline Recruitment added 4p at 139½p following excellent annual results.