Market report: Friday close
The FTSE 100 index smashed through the 6700 barrier today, for the first time in almost seven years.
The blue-chip index of leading shares was up 82.50 points at 6732.40 amid frenzied takeover talk and another stellar performance on Wall Street lit up the City.
The Footsie last closed above 6700 on 5 September 2000 when shares in London were on the retreat as the dot-com boom of the late 1990s turned to bust.
Global markets have rallied in recent sessions with a strong performance on Wall Street overnight backed up by gains of about 100 points by the Dow today. It was up 93.8 points at 13,647.5.
Sainsbury's was thrust back into the spotlight in London amid renewed interest from Delta Two, which took its stake to 25%. The supermarkets group was joined at the top of the leaderboard by plumbing supplies company Wolseley. Shares in Wolseley were up 55p to 1325p, having hit a high of 1382p earlier in the day, as investors gambled that it could become a takeover target.
The rumours followed strong interest in Hughes Supply, one of its biggest rivals in the US, where Wolseley does much of its business. Hughes Supply has been put up for sale by owner Home Depot and is now attracting interest at the very top end of expectations. Analysts said the prices being discussed made Wolseley shares look undervalued, leading to the surge.
While Sainsbury's - 25½p ahead at 590½p - enjoyed a rally on the back of interest from Delta Two, rival supermarkets group Wm Morrison gained 7¾p to 308½p after upgrades from Numis and Panmure Gordon. The shares have fallen 10% in just over a month, but there has since been a modest improvement in like-for-like sales. Numis analyst Steve Davies said: 'We believe the shares represent an attractive investment opportunity at these levels.'
Panmure was also bullish on Tesco, which gained 7½p to 460¼p. But there was no such luck for coal-fired power station Drax, which fell 10½p to 763½p after Goldman Sachs cut its rating from buy to neutral.
A site visit to Young's new brewery in Bedford put leisure analysts in good cheer, although it did little for the volume of stock traded. Young's shifted operations from its historic site in Wandsworth to the Charles Wells brewery in Bedford last year and treated key contacts in the City to a tour of the site and a pub lunch.
With so many movers and shakers sampling Young's beer rather than trading the company's shares, the stock was up 24p to 3374p on very light volumes. Elsewhere in the sector, Marston's was up 6½p to 456½p, Scottish & Newcastle gained 5p to 635½p, London Pride brewer Fuller lost 1p to 1891p and Greene King was up 31p to 1079p.
The race for Baggeridge Brick looked like drawing to a close today when Austrian rival Wienerberger, the world's largest brick maker, secured a controlling stake and upped its offer to 247p a share, valuing Baggeridge at £102m. Wienerberger first tabled an offer, worth £89.2m, last August but has raised its bid three times to fend off interest from Michelmersh-Brick, which had built a 17% stake and was considering a bid. Baggeridge shares were up 11½p at 244p.
Ladbrokes was in high demand yesterday as vague rumours of private equity interest swept the City. More than 21 million shares were traded, compared with the usual 10 million, pushing the bookie up more than 4% to 459¾p.
There was good news for Speedy Hire, which again found favour following its acquisition of Hewden Tools. UBS lifted the firm to buy from neutral, saying its deal with Hewden took out a significant competitor and will be good for growth of the UK tool-hire business.
'We believe this is a good deal for Speedy since it gets exposure to significant earnings upside at an attractive price,' UBS said, sending the shares up 44p to 1319p.
SHARES ADVICE & TOOLS
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TAKING STOCK
BANKING AND FINANCE
JPMorgan Chase is to build its new headquarters at the site of the World Trade Center complex that was destroyed in the terrorist attacks of 11 September, 2001. The bank is paying £158m for a 92-year lease on the offices. The move is seen as a major boost to lower Manhattan and the area around Wall Street.
BUILDING AND PROPERTY
Epsom-based private developer Oracle has unveiled plans for its Canary Quarter scheme in east London. The 30-storey, £350m project on the former Indescon Court site on Millharbour will comprise 950 homes, a hotel, shops and offices. It forms a major part of Oracle's £2.5bn development pipeline.
CONSUMER
Renault is thinking about making a low-cost car to sell in emerging markets such as India. The French car group is looking at building a car that would sell for only £1500, making it one of the cheapest in the world. The annual car sales total is expected to double in India over the next three years.
ENGINEERING
Ferrexpo today became the first Ukrainian company to list on the London Stock Exchange. The ion-ore miner and steel processor is valued at £848m after its shares made their debut at 140p. Ferrexpo is raising £213m, half of which will be going to its parent shareholder Fevamotinico.
HEALTH
Allergy Therapeutics says it is on track to launch its hay-fever vaccine by 2009. There had been concerns the company would not be able to recruit enough people for tests before the start of this year's hay-fever season to keep the launch on schedule. The vaccine will be given in four injections over a three-week period.
INDUSTRIALS
Rolls-Royce has signed a 10-year service agreement with Thai Airways, covering the engines on its 10 Airbus A340s. The British engine-maker said the deal with the 13th-biggest Asian airline is on an undisclosed fee per engine flying hour. Rolls-Royce has strong business interests in Thailand, where it is a leading supplier to the oil and gas sector.
LEISURE
Club MÈditerranÈe's biggest shareholder, French wealth manager Richelieu Finance, has sold a 10% stake in the company to two funds, including London-based hedge fund GLG, home of top rainmaker Noam Gottesman. Holiday firm Club Med said GLG bought a 5% stake, taking its total holding to 8.5%.
MEDIA
News Corporation, Rupert Murdoch's company, is selling off nine of its Fox-affiliated TV stations in America. It did not give a reason for the decision, but analysts speculated that it is looking to raise some cash to fund a $5bn (£2.5bn) deal to buy Dow Jones, which owns the Wall Street Journal.
NATURAL RESOURCES
Latest buy note out on Premier Oil suggests there is a 13% upside on the current share price after the recent sell-off following disappointing drilling reports and the launch of a $250m (£130m) convertible bond. Credit Suisse reckons Premier's shares are worth 1160p as its Asian reserves are undervalued.
RETAILING
Focus DIY, the UK's third-largest home improvement retailer with 250 stores, is close to securing a takeover by United States hedge fund Cerberus. Focus, which is owned by Duke Street Capital, Apax Partners and founder and chairman Bill Archer, is in talks with Cerberus, and a deal could be finalised next week.
TELECOMS
Cable & Wireless could face a revolt by shareholders at next month's annual meeting over a new bonus scheme for chairman Richard Lapthorne. The Association of British Insurers, which represents many of the country's largest investors, is questioning plans to pay Lapthorne a bonus of 5.5 million shares worth £11m.
SUPPORT SERVICES
Barclays Wealth sees 'appealing long-term prospects' for waste management group Biffa despite disappointing results and a tough trading environment. The shares fell more than 9% earlier this week after it predicted slower earnings from its landfill business, but Barclays today said the company was still well-positioned.
TECHNOLOGY
Google and chipmaker Intel have launched an initiative to increase energy efficiency in computers. The pair, who are spearheading a drive that includes Microsoft, Dell, Hewlett-Packard and IBM, say more-efficient energy use from PCs could cut greenhouse emissions by more than 50 million tonnes a year.
TRANSPORT
The prospect of Land Rover and Jaguar falling into the hands of private equity could be bad news for car dealership Pendragon, according to Panmure Gordon. Analyst Mike Allen said the two brands were 'good profit earners' for Pendragon, and the uncertainty over their future could unsettle trading.
UTILITIES
London's main electricity supplier EDF is to split off its distribution activities into a separate subsidiary by New Year's Day. It said it has taken 'all necessary measures' to ensure fair and transparent access to the distribution network after 1 July this year when France's consumer energy market is liberalised.
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