A billion pound bid, a deal between two major brewers, a host of takeover speculation and a U-turn over Northern Rock kept traders busy today ahead of the pre-budget report.
First the bid. Oil group Burren Energy jumped 258p to £11.80 after Italian group Eni made a £1.48bn, £10.50 a share, offer for the group. Burren immediately rejected this and said it had received several offers at up to £11 a share, but that they all undervalued the company.
Rivals were lifted by the news, with Tullow Oil 15p better at 601p and Premier Oil 85p higher at £11.20.
Meanwhile, water group Severn Trent rose 33p to £14.66. Analysts said it could be the next bid target after a group of infrastructure funds led by JP Morgan Chase paid £4.2bn (including debt) to buy Southern Water from Royal Bank of Scotland.
Speaking of RBS, its shares fell 2.5p to 558p in the wake of its victory in the bid battle for ABN Amro. Analysts who had previously been unable to issue research on RBS and failed rival bidder Barclays because of possible conflicts of interest have now started issuing notes. Barclays added 3.5p to 665.5p as Deutsche Bank resumed coverage with a buy recommendation and a 740p target.
It said: "Given Barclays' valuation, and earnings opportunities within the group, we would expect future deals to be primarily cash-funded, and therefore of modest size and earnings accretive."
West LB also upgraded the bank, from reduce to hold, and raised its price target from 680p to 730p.
Still with financials, Northern Rock was the biggest riser in the FTSE 100, up 34.25p to 206.75p as the government said it would guarantee all retail deposits, giving the bank breathing space to sort out its future. Two weeks ago the government suggested it would be unfair to offer protection to savers who opened accounts after the orginal guarantee was made. The number of bidders circling the stricken bank is believed to have increased to at least five.
Brewing group SABMiller was also wanted, up 21p to £14.87 after it announced a joint venture with US group Molson Coors. The two will combine their US operations, which could generate around $500m of annual cost savings within three years.
Elsewhere property group British Land added 55p to £11.47 on vague talk of Saudi stakebuilding.
Overall the leading index closed up 74.5 points at 6615.4, while the FTSE 250 added 99.1 points to 11,427.8.
Alistair Darling's first pre-budget report had little impact - the FTSE 100 was around 55 points higher when he stood up, and 69 points ahead when he sat down.
IT group LogicaCMG added 15.5p to 166.75p as the City welcomed news that Andy Green, head of strategy and operations at BT, was joining the company as chief executive.
Landsbanki said: "We applaud this appointment for two reasons. Firstly, it is not internal, which was a serious concern weighting on investors until today. Secondly, we have long stated that LogicaCMG needs someone with successful outsourcing experience at the helm, to unlock the hidden value in the shares. We classify this as a strong appointment and believe that the shares will now begin progress to our price target of 186p."
Meanwhile, retailer Carpetright added 54p to £12.15 after founder and chief executive Lord Harris unveiled his £850m, £12.50 cash bid.
Panmure Gordon analyst Christian Koefoed-Nielsen said the offer was relatively generous but added: "Rightly or wrongly, the first offers in a buyout are rarely accepted; shareholders may, therefore, hold out for more. We retain our buy recommendation and £13.50 target price."
Among the fallers, building materials group Wolseley lost 18.5p to 855p as traders reported that Citigroup was placing nine million shares at 837p each.
Housebuilders were hit by a downgrade by UBS. The bank said: "We have had an overweight stance for seven years [on European construction]. Given the outlook for 2008, we think this period of outperformance has ended. We move from overweight to neutral [on the sector]."
It reduced its recommendations on several of the leading players. It cut its price target for Barratt Developments from £11.35 to £10.60, for Persimmon from £14 to £13.80, and moved from neutral to sell on Redrow.
So, Barratt fell 15.5p to 740p, Persimmon lost 25p to £10.15 and Redrow dropped 9.5p to 397.5p.
UBS also hit mining group Kazakhmys, after yesterday's news that flooding at its south mine in central Kazakhstan would disrupt copper cathode production. The company's shares were 39p lower at £14.63 as UBS issued a sell note with a £15 target.
Manufacturing business Chemring dropped 90p to £18.74 after an explosion at a factory it owns in Rome killed one person and injured twelve. The company said it had launched an immediate investigation into the incident.
Elsewhere, pubs group Regent Inns lost 3.75p to 71.25p after it announced a 2.8% fall in like-for-like sales for the year to June.
Results from Debts.co.uk also disappointed and the company's shares fell 7.5p to 53.5p. There has been much concern about the continuing profitability of individual voluntary arrangements (IVAs), which is a key part of the company's business.
Shore Capital said: "We feel Debts.co.uk is likely to come out of the market turmoil as a winner rather than a loser. The key reason for this is the company has a profitable and diversified business model that has no gearing but has cash on the balance sheet."
But even so, it retained its sell recommendation. "There remains significant negative sentiment towards the IVA sector with no discrimination between companies," said the broker. "We also believe there is likely to be further negative news to come from other companies in the sector which could negatively impact the shares again."
Car valeting and vehicle preparation business Autoclenz went into reverse, down 24.5p to 75.5p after it warned a contract with a major auction house would see revenues cut from £4m a year to £1.5m. It said this year's profits would be hit to the tune of £300,000 while the 2008 number would be reduced by £700,000.
But Clinton Cards climbed 3.5p to 63.75p as full year profits came in ahead of market expectations.
Finally struggling property group Erinaceous added 4.75p to 42p as entrepreneur James Caan raised his stake to 5.7% after buying 3m shares yesterday. Investors are hoping either Caan or property tycoon Vincent Tchenguiz could take over or break up the business.