Yesterday's trading: Bid talk revs up Halfords

By Geoff Foster for MailOnline
Updated: 03:49 EDT, 30 October 2007

The story may have done the rounds a few times before but it nevertheless continues to set pulses racing. Shares of car parts and bike retailer Halfords accelerated to 370p and closed 17¼p higher at 362p as rumours of a £1bn or 460p-a-share cash offer from 7% Japanese shareholder and commercial partner Autobacs Seven sparked heavy buying.

Ever since Autobacs acquired a 5% stake from CVC Capital Partners in December 2005, dealers have waited for Japan's largest car accessories retailer to try to gain total control. Halfords share price touched a year's peak of 414p in July after Autobacs set up a new credit facility of up to £410m with merger and acquisitions very much in mind.

The shares have since reversed sharply on the lack of any developments but were certainly back in top gear yesterday when punters stepped back on the gas on hearing that Autobacs issued a convertible bond issue on Friday to raise a further £220m for acquisitions. Halfords interim figures are due next month, so it is unlikely that if it is interested, Autobacs makes a move before then.

Green lights flashed for the rest of the market as the Footsie cruised back above 6,700 following gains by Far Eastern markets over night. Following Wall Street's 134-point surge on Friday on hopes that the Federal Reserve will cut US interest rates tomorrow, Hong Kong's Hang Seng blasted through 31,000 for the first time ever with a spectacular gain of 1,181 points, or 3.9%. Property shares led the romp.

The UK's premier index touched 6,726.9 before boiling over to close 44.7 points better at 6,706 and only 26.4 points below June's seven-year high. The soaring pound traded near a 26-year high, hitting $2.06.

As the price of gold flirted with the magic $800 an ounce level on dollar weakness and Xstrata (48p up at 3576p) forked out £1.4bn on Australian nickel company Jubilee Mines, the mining sector rejoiced. Vedanta Resources added 74p at 2230p, Kazakhmys 50p at 1514p, Anglo American 107p at 3352p, Lonmin 46p at 3396p and Rio Tinto 60p at 4477p.

Among FTSE 250 resources stocks, Aquarius Platinum rose 126p to 1912p and Talvivaara Mining 17¼p to 297¼p.

Nervous selling ahead of tomorrow's trading statement left housebuilder Taylor Wimpey 8½p lower at 230½p. Broker Kaupthing advises clients to avoid the stock and believes TW will make sizeable write-downs to Wimpey's US asset base (possibly £100m plus) and may even flag that further reassessment of TW's US assets is necessary. Barratt Developments lost 20p to 631p in sympathy.

A Citigroup recommendation and increase in target price to £24 from 2275p helped Homeserve advance 86p to 1764p. Vague rumours of a bid approach accompanied a speculative gain of 11¾p to 314¼p in Kesa Electricals.

Continuing talk of a 140p-a-share bid approach from Goals Soccer Centres (1p easier at 430p) kicked five-a-side football centre group Powerleague 1½p higher to 103½p.

Offered for sale at 220p by broker Deutsche Bank, shares in the data centres operator Telecity touched 295p, before closing at 277p.

Dealings were resumed in oil and gas explorer Max Petroleum after a seven-week freeze and many investors quickly pulled the plug. The shares immediately crashed to 59p as contracts for difference (CFD) holders sold to meet margin calls. They later bounced to finish only 14¼p cheaper at 96p on meaty turnover of 50m shares.

Trading was halted after the company suspended chief executive Steve Kappelle and chief operating officer Ole Udsen while it investigated the undisclosed receipt of share options. Since then it announced full-year losses of about £12m and plugged and abandoned the East Alibek oil well in Kazakhstan.

Vyke Communications, the leading mobile voice-over internet protocol service provider, jumped 14p to 195p following a successful institutional placing to raise £12m. The cash will apparently be used to accelerate its marketing initiatives and maximise the potential of its new distribution agreement with Nokia.

Investment company Volvere, where former Dixons boss Lord Kalms is chairman, jumped 15p to 167½p. It has tripled its investment in Vectra by selling the business to a Dutch group for £6m. The sale will boost its coffers and Volvere will now have cash resources alone worth more than its share price.

Awaiting further news regarding the bid approach, Imprint put on 12p at 105p.

Hospital infection control firm Tristel rose 8p to 54½p on good annual results. Pre-tax profit is up 49% to £1.25mon a 37% sales rise to £5.15m.

• Software group ANT marched 4½p forward to 25p in celebration of being chosen by Scientific Atlanta - which is part of the giant Cisco empire in the United States - to be the provider of television service applications. Under this agreement, which extends beyond the previous licensing deals, the company will provide all the reference television service applications for Cisco IPTV.