There was some Christmas cheer yesterday for investors in brewing group SABMiller
SAB's shares climbed 90p to £14.06, making it the biggest riser in the leading index, on news that it had signed a definitive agreement with US rival Molson Coors to place their US and Puerto Rico operations into a joint venture. The proposed deal was first announced in October, and should be completed by the middle of next year.
Overall the market was in a buoyant mood, with the FTSE 100 index closing 88.5 points higher at 6434.1. Miners were a strong feature on rising gold and copper prices, and a touch of corporate news. Antofagasta added 31p to 714.5p, while Vedanta Resources climbed 80p to £20.51. Anglo American rose 129p to £30.13 as it paid $620m for a 70% stake in Australian coal mine Foxleigh.
And Rio Tinto rose 148p to £52.78 after the Takeover Panel told potential bidder BHP Billiton to put up or shut up. It gave BHP, up 47p to £15.40, until February 6 to make up its mind whether to make an offer or not. BHP said it was considering its options and was still trying to get the agreement of the Rio board for its proposal.
Analysts at MF Global moved their recommendation on Rio from neutral to buy. "Having re-examined the case for the stock we have found that we were premature in downgrading it to neutral. Not only will higher iron ore and coal prices as well as the potential of a rebound in the aluminium price help the stock, industry consolidation should also kick in once more.
"We do not believe other miners will sit on the sidelines while BHP Billiton gets the better of this group. We would not be surprised if a third party such as Xstrata, CVRD, Rusal or Anglo American would interfere, if only to make a turn on the investment. That said, even without industry consolidation, the stock looks reasonable value here."
Elsewhere aero engine maker Rolls-Royce climbed 23p to 533p. It has just announced it will put £500m into its pension funds to sort out the deficit, and has won a £72m marine contract. Director Helen Alexander this week bought 1000 shares in the market at 506.27p.
Retailers were initially boosted by better than expected high street sales in November. The shine came off after poor figures from Footfall showing the number of shoppers visiting stores in the past few days. DSG International, owner of Currys and PC World, fell 2.3p to 100.5p, Next lost 19p to £16.01 and Marks & Spencer was 6p lower at 544p.
And Carpetright slumped 188p to 880p after Lord Harris' proposed £12.50 takeover offer fell apart.
Morrison Supermarkets added 10.5p to 321.5p as Lehman Brothers issued a positive note. "We reiterate our bullish views on the UK food retail sector and in particular on Morrisons, which recorded impressive double-digit growth into the crucial Christmas period," said the bank. It has a 360p target and an overweight rating on the company.
Cruise company Carnival sailed 7p higher to £22.20 as fourth-quarter profits met expectations, despite falling back 14% owing to higher fuel costs. Collins Stewart issued a buy note, saying: "Whilst its exposures to the oil price and consumer discretionary spend are likely to remain out of favour in the near term, there is no doubting that Carnival is fundamentally cheap."
Housebuilder Barratt Developments, on its last day as a FTSE 100 company, fell 9.75p to 431.25p. News that chief executive Mark Clare had bought 45,558 shares at 441p each had little impact.
Pubs group Mitchells & Butlers fell another 15p to 427.25p after this week's negative note from JP Morgan, which slashed its price target on the company from 850p to 460p.
Among the mid-caps, engineering group Morgan Crucible was 12p better at 201p as it revealed it planned more share buybacks, and paid £73m for two US ceramics businesses.
The company's shares were hit recently on concerns about the effect of the weak dollar on its profits, but yesterday Arbuthnot issued a strong buy note while Cazenove made positive noises about the deal.
"At first glance this appears to be a sensible acquisition at a reasonable price and in line with management's strategy and should be received positively," said Caz analyst Richard Paige. "While some concerns may be raised regarding the timing of the acquisition of a business in the aerospace sector, we believe the acquisition multiples do not appear overly demanding and strong aircraft new build order rates suggest the businesses should enjoy continued healthy demand over the next few years."
Car dealer Pendragon moved 1.75p ahead to 32.5p. The company said in a trading update that it had sold surplus properties for £10m, making a £6m profit on the deals. This was the company's second trading statement in less than a month and was better received than the first one, which was in effect a profits warning.
Satellite group Inmarsat added 33.75p to 518.5p as it signed an agreement with three rivals over the re-use of part of the North American radio spectrum for their customers.
Lower down the market, Aim-listed Chinese mobile phone group EBT Mobile China jumped 5.25p to 19p after it said it had received a takeover approach and was in talks about a possible offer.
The IT crowd
An agreed £593m bid for software and outsourcing firm Northgate Information Solutions sent analysts scurrying to find other possible targets in the sector. Numis said the 95p-a-share offer - from US private equity group KKR - looked high. "This announcement will be positive for other local government software companies (Civica, Anite, IBS), because this deal opens up the possibility of consolidation in this sector, led by private equity," said Numis. "It may also have broader implications for investor sentiment among other UK software companies that have previously been subject to takeover rumour or talks with private equity (eg Misys, Intec, Coda)." Northgate rose 28.25p to 92p, Civica 16.75p to 187p, Anite 2p to 50.5p while IBS was steady at 165.5p. Misys slipped 2p to 183p, Intec added 0.5p to 40p and Coda climbed 13.5p to 172p.