Market report: Thursday close
Are the Barclay brothers about to bid for InterContinental Hotels Group (ICG)?
The idea moved from idle speculation to a serious possibility today after Sir David and Sir Frederick revealed they now have a 10% stake in the Crowne Plaza and Holiday Inn hotels operator.
The Barclays' investment vehicle, Ellerman Corp, first took a 5% stake in ICG in January and has since been steadily adding to it. Today's revelation pushed the shares down 13p to 1305p as investors bet that the brothers, who also own the Ritz, are poised to strike.
It was a topsy-turvy day for the Footsie 100 after yesterday's fierce slump. At one stage, it was almost 50 points ahead, and investors seemed to take comfort from the announcement that interest rates are held at 5.5% for the time being. Later it fell back by 22.10 points to 6500.6.
GlaxoSmithKline, up 37p at 1299p, headed the Footsie leaderboard as analysts bet the drugmaker will escape unscathed from a US hearing into alleged links between its diabetes treatment and heart attacks in users. Citigroup rates Glaxo a buy while warning that the shares will 'tread water at best through the next few months'.
BAE Systems slumped 10¼p to 428¼p after a report that it had secretly paid £1bn into an account held by Prince Bandar bin Sultan, the former Saudi ambassador to the US. BAE denied the allegation but faces continued probes about how it secures weapons contracts.
The property sector was heavily under water after Vector Hospitality embarrassingly pulled its flotation yesterday. The number of high-profile investors who shunned the float unnerved the market, which fears a slide in property prices.
Housebuilder Persimmon tumbled 47p to 1240p, Grainger fell by 26½p to 580p and Warner Estates lost 35½p to 695½p. Student accommodation outfit Unite joined the misery, down 21½p at 440p.
Mike Ashley took a big step toward taking control of Newcastle United as the club confirmed chairman Freddy Shepherd is selling his 28% stake to the retail tycoon for £37m. Ashley now holds more than 70% of the stock, making his £133m takeover bid certain to succeed. News that the club has received £7m from West Ham for Scott Parker also helped the shares up 1½p to 98½p.
Sports Direct International, Ashley's recently floated clothing empire, could be threatened by the football deal if rival fans decide to shun the shops. Sunderland fans have already indicated they won't be lining Ashley's pockets in case he breaks with Newcastle tradition and spends the money on good footballers. Sports Direct shares, floated at 300p, dropped back 1p to 197p.
Consumer lending outfit Provident Financial announced a demerger of its international home credit arm, with shareholders offered stakes in a new company called International Personal Finance. The shares lost 16p to 764p on disappointment there is not more for investors in the move.
On AIM, Debt Advisory Group offered the best laugh of the day after it reported that talks with a bidder had failed, forcing the company to 'engage the services of an insolvency practitioner'. The shares were suspended at 8½p, leaving the company theoretically worth £7.3m.
The Dow Jones Average was this afternoon down34.7 points at 13,431.
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