Market report: Monday close
Even the prospect of a clutch of mouthwatering takeovers being lined up by bargain-hunters failed to keep stock market investors for long today.
ITV, which last month slumped to a record low of 68.2p, rallied 2.1p to 78.6p following reports it is being circled by private-equity companies Apax, Provident and Kohlberg Kravis Roberts. They are reputed to be close to offering about 100p a share, valuing the independent broadcaster at £3.8bn.
The Office of Fair Trading last week ordered satellite broadcaster BSkyB, 5p lower at 551½p, to reduce its 17.9% stake in ITV to below 7.5%. Bear Stearns has raised ITV from underperform to peer perform.
Private-equity money was also seen behind Friends Provident's rally of 4.7p to 140.7p. The shares slumped to a three-and-a-half-year low of 136p last week on news of job cuts and about £1bn of disposals. It followed last year's failed merger with Resolution.
Punch Taverns, down 46p at 667½p, today confirmed it has made an approach for rival pubs chain Mitchells & Butlers, 16¼p better at 466½p. M&B put itself up for sale last week after its shares slumped to a two-and-a-half year low of 386p following a failed property venture that cost it £274m.
FKI shaded 1p to 66p after receiving a 70p-a-share offer from turnaround specialist Melrose, valuing the business at £352m. The terms may not go down well with shareholders of the engineering outfit, which last year turned down an offer of 130p from private-equity outfit Blackstone.
The rest of the market ran out of steam after an early mark-up. Investors are waiting to see if the Bank of England can muster another cut in interest rates later this week. The FTSE 100 index fell 3 points to 6026.2 by close after shedding over 19 points in the early afternoon, following a Wall Street loss of 77.2 points to 12,666.
Royal Bank of Scotland rose 16¾p to 405½p after reassuring shareholders that it had no plans for a rights issue, and would sooner sell off assets.
Cairn Energy rose 10p to 2555p after Morgan Stanley moved from equalweight to overweight and lifted its target price from 2785p to 3150p. Cairn is on track to deliver its first oil from Mangala in Rajasthan by the second half of next year. Of the 360p-a-share increase in its net asset value target, 60p is due to confirmation Cairn has filed with the Indian government plans to increase plateau production from the Mangala field from 96,000 to 125,000 barrels a day.
Indago Petroleum rattled down 48½p to 28p after striking salt water at its Al Jariya-1 well in Oman.
Media agency Aegis was at first dipped slightly to remain unchanged at 115¼p after Credit Suisse placed 8.4m shares at 113p.
A two-way split has developed in Kingfisher, up 2.8p at 153.6p. Deutsche Bank has upgraded the B&Q DIY retailer from hold to buy and upped its target from 155p to 185p, saying it will recover in the next three years.
But Nick Bubb at Pali International, has begun coverage with a sell rating and 120p target, saying: 'With the £3bn freehold property portfolio weakening in value, the price-earnings ratio of nearly 14 times could yet fall further, and we remain cautious.'
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TOMORROW'S AGENDA
• BP unveils full-year figures. Despite a catalogue of operational problems last year, analysts forecast the oil company will deliver a near-15% jump in fourth-quarter profits. However, earnings in the first nine months of 2007 were down 22%.
• Mining giant BHP Billiton reports first-half results. The company, which has until Wednesday to bid for Rio Tinto, last month unveiled record iron ore, aluminium and petrol production.
• Walkabout and Jongleurs owner Regent Inns delivers half-year results. The pubs group admits trading has deteriorated as consumers cut spending, but news of bid approaches has brought comfort to investors.
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