Yesterday's trading: Premier gushes on bid talk

By Geoff Foster for MailOnline
Updated: 03:48 EDT, 1 November 2007

It must be that time of year. Last November Premier Oil revealed it had received a bid approach which eventually came to nothing.

Yesterday, shares of the £1bn oil and gas group gushed to 1281p and closed 72p higher at 1240p amid growing speculation that a foreign predator is about to table a £1.23bn, or £15 a share cash bid.

Dubai Energy, ONGC-Mittal and Royal Dutch Shell (2p off at 2105p) have in the past all been mentioned as potential bidders.

Punters this time heard that Santos, Australia's third-largest oil and gas group, and valued at £4bn, could be looking to pull off a major acquisition to fend off a possible bid for itself.

Santos has become one of Australia's hottest takeover targets after the state government of South Australia said it would remove an ownership limit that restricts individual shareholdings to 15%. The cap will be removed after a 12 month transition period and so Santos has that time to build up its defences.

Last year it raised proven and probable reserves by 5.8% to 819m barrels of oil. It has been positioning itself to become a leading energy company in South East Asia, an area where Premier has substantial interests.

Apart from the soaring oil price, it's been consolidation hopes that have lifted the sector. Burren Energy, which strongly rejected a near-£1.5bn or 1050p a share cash offer from Italy's energy group ENI, rose 35p to a record 1210p on hopes for a sharply higher offer.

Burren floated at 130p in December 2003. Other old speculative favourite Tullow and Soco rose 14p to 638p and 118p at 2226p respectively.

Always convinced the Federal Reserve would shave US interest rates by a further quarter point to 4½% and hopes it might persuade mopey Mervyn King and his Bank of England chums to do the same with UK rates next week, the Footsie shot 62.6 points higher to 6,721.6 to close within 10.8 points of June's seven year peak. Wall Street initially traded 74 points higher.

Financials were relieved to see Deutsche Bank beat analysts' predictions with a €1.4bn third-quarter profit, although it did report the first loss at its flagship investment banking division for five years. The German bank said the fourth quarter had started 'very positively'.

Barclays rose 9p to 604p and HBOS 21½p to 873p. Renewed Bank of China bid talk lifted Standard Chartered 61p to 1866p.

Excited by Tuesday's late disclosure that horse-racing tycoons JP McManus and John Magnier have acquired a 3.4% stake for £84m, Mitchells & Butlers soared 40½p to 665½p. Iranian property magnate Robert Tchenguiz holds 14% of the pubs group via shares and contracts for differences (CFDs).

His planned £4.5bn property joint venture with M&B had to be shelved because of the credit crunch and dealers now reckon it is possible that McManus and Magnier could team up with Tchenguiz to revive the deal.

Office landlord Workspace, in which property entrepreneur Jack Petchey owns 21% via CFDs, advanced 21½p to 338½p on hopes he will eventually bid or flush out another predator.

Speculation that disposal news and a return of cash to shareholders could be announced next week helped Spirent Communications touch 72p and close 3½p better at 69¾p. The group bought back 709,937 of its owns shares at an average price of 69¼p.

Sports Direct rose 8¾p to 144¼p on hefty turnover of 13m-plus. Mike Ashley's controversial retail chain on Wednesday doubled its stake in England kitmaker Umbro (2¾p cheaper at 190¾p) to 29.9%, putting Nike's agreed £275m takeover bid in jeopardy.

Vague bid talk helped Moneysupermarket.com rise 10¾p to 215p on heavy turnover of 16m.

Rumours of a pending bullish circular lifted Tomkins 10½p to 221¾p.

Publicity given to ReGen Therapeutics' miracle sleeping pill Zolpidem ahead of last night's BBC 1 documentary, ONE life - The Waking Pill, attracted penny share punters to the shares which closed 0.14p better at 0.775p.

US life sciences company Entelos rose 2½p to 25p after Pfizer Ireland Pharmaceuticals invested £750,000 acquiring a further 2.5m shares, increasing its stake to 5.2m or 6.9%.

Goldplat soared 4p to 15½p on hearing that its gold recovery plant in the free port of Tema in Ghana is ahead of schedule and targeted to be fully operational in January

• International film content and distribution business Entertainment One gained 6½p to 108p after a large line of stock was cleared. Dealers expect outperformance in the short-term and believe that the group's strong cashflow will help fund earnings enhancing acquisitions going forward. Whispers from the director's chair suggest one could be just around the corner.