Market report: Wednesday close

By Mickey Clark for MailOnline
Updated: 12:34 EDT, 11 April 2007

The joint founder and former chief executive has severed his connections with Borat's favourite company, Kazakhmys, by cashing in his remaining chips worth an estimated £252m.

Yong Keu Cha has sold his remaining 4.5% holding in the copper miner. Credit Suisse sold the 21.05m shares at a discounted 1160p via an accelerated bookbuilding operation. This was conducted under the watchful eye of James Leigh-Pemberton, whose father, now Lord Kingsdown, is a former Governor of the Bank of England.

Cha retired from the company at the end of 2006 and was replaced by Oleg Novachuk. Following the sale, Kazakhmys' biggest shareholder will be its other joint founder, Vladimir Kim, who will continue to own 208.1m shares, or 44.5% of the company. Kazakhmys responded to the news with a fall of 25p to 1195p.

Xstrata jumped 28p to 2785p after selling its aluminium business to private-equity investor Apollo Management for $1.15bn (£600m) - almost double previous estimates. Credit Suisse has jacked up its target for Xstrata from 3000p to 3500p and says: 'Xstrata is the most exposed to the current rally in nickel and copper prices and has the largest scope for earnings upgrades among the big four miners.'

The rest of the equity market ticked better despite being weighed down by several big companies going ex-dividend. The FTSE 100 index rose 4.5 to 6413.3 - just 16.1 points shy of its six-year closing high of 6444.4. Wall Street opened lower this afternoon with the Dow nursing a loss of 31.70 at 12,542.10.

The Prudential touched 761½p before paring back its lead to 5p at 754p. Once again there is talk HSBC, up ½p at 904½p, is poised to bid. It is not a new story, but the performance of the Pru share price suggests something is afoot.

Barclays, which slipped 3p to 732p, may be close to offering e38 a share for rival Dutch bank ABN Amro. That compares with the current share price of €34.27. But speculators refused to get carried away.

They say talks remain at an early stage and that the ABN share price has risen strongly in recent weeks. There is also talk Royal Bank of Scotland, up 10p off at 2018p, may team up with Spain's Central Hispano Banco Santander and launch a counterbid.

Marks & Spencer, up 19p at 714p, was the best-performing blue-chip. The collapse of the bid for J Sainsbury, down 13½p at 525p, means M&S may become the next private-equity target. But broker Seymour Pierce is sceptical. It says the management's success in reviving the firm's fortunes, and competitive conditions, make a private equity bid unlikely. M&S shares are among the sector's cheapest. Sentiment was also bolstered by a bigger-than-expected 3.5% March rise in retail sales.

Elsewhere in the sector, Tesco rose 1¾p to 457¼p after Numis Securities repeated its add rating and lifted its target from 400p to 540p. The broker has revalued Tesco to reflect the value of its assets. It reckons the properties alone are worth £23.4bn, as against a book valuation of £13.2bn for the freeholds and long leaseholds last year.

Publisher Reed Elsevier firmed 1p to 619½p, underpinned by news a £600m bidding war is likely to develop for Bureau van Dijk after Candover put its 60% stake up for sale. Bureau van Dijk owns an online database which provides information on six million companies.

Collins Stewart is quick to rule out Reed bidding and says there is more chance the company will itself become a target. On a stand alone basis, it believes the shares are good value at 615p, and could climb to 1147p if the capital structure was stretched to eight times net debt.

The European property sector has been downgraded from positive to neutral by Lehman Brothers. The broker has downgraded Land Securities, down 19p at 2179p, British Land, 13p off at 1569p, Hammerson, down 22p at 1690p, Slough Estates, 3p easier at 798p, and Brixton, 6p lower at 516p, from overweight to equalweight.