Yesterday's trading: BE gallops on sale talk

By Geoff Foster for MailOnline
Updated: 03:35 EDT, 13 March 2008

Deprived of a bet at Cheltenham by gale force winds, professional punters checked out the latest runners and riders in the City takeover stakes.

The Daily Mail's Geoff Foster

British Energy got everyone hot under the collar as it galloped ahead to 598p before closing 15½p better at 587½p on talk of a 725p a share cash offer from RWE, Germany's giant electric power and natural gas group based in Essen.

The nuclear operator has been subjected to considerable takeover speculation in recent weeks after analysts at Citigroup suggested it could be on the radar of British Gas-owner Centrica, 1p dearer at 311½p.

They said that Centrica was forced to buy extra fuel and power in the wholesale market, making it reliant on energy prices that can be volatile. An offer for British Energy, although risky, could therefore be on the cards.

British Energy's shares have also benefited from the rising oil price and reports that the government wants to accelerate the building of nuclear reactors.

Revived speculation that the insurance giant could soon become a Chinese takeaway helped Prudential jump 19½p to 659p. Ping An, the giant Chinese insurance group, recently got shareholders approval to raise fresh funds of up to £8.5bn. It wants to expand in the UK and the Pru is valued at £16bn.

Prudential revealed that Tidjane Thiam will join the board as finance director on March 25, replacing Philip Broadley who will leave the group at the end of the month, as announced previously.

Property asset manager Capital & Regional, which specialises in mall shopping centres and out-of-town retail parks, was all over the shop. It raced ahead to 594½p on talk of an imminent cash bid of up to 850p a share before pulling up lame on profit-taking to finish ½p cheaper at 552½p.

Martin Barber, a veteran of the commercial property industry and co-founder of C&R in 1979, was recently ousted in a boardroom coup. Apparently following a row with chairman Tom Chandos. Whispers now suggest he and some of his corporate 'friends' could return with a cash bid.

It should be before new chief executive Hugh Scott-Barrett, the former head of global corporate finance at ABN Amro, gets his feet under the table.

The Footsie's 86 point rise to 5,776.4 had nothing to do with the Budget. It reflected Tuesday's biggest one day points gain in five years on Wall Street and its further early rise of 201 early yesterday.

Buyers have piled back into the market following the Fed's desperate attempt to avert a full-scale collapse of credit markets by offering an unprecedented £100bn in securities to boost liquidity.

The gilt market came a cropper in the Budget after the Chancellor said the government would literally flood the market with short-dated stocks in seven auctions next year to help refinance part of the loans the Bank of England made to beleaguered Northern Rock. Shorts lost 75p at one stage on hearing that a massive £80bn worth of gilts will be issued, up from £58.5bn in 2007/8.

Another 11p on a packet of 20 oily rags dragged Imperial Tobacco 10p lower to 2373p. Punch Taverns, Britain's biggest pubs group, shrugged off the 4p increase on a pint of beer and closed 6½p better at 610½p. Smirnoff vodka and Johnnie Walker whisky group Diageo improved 4p to 1016p despite the 56p tax increase on a bottle of spirits.

Dealers yelled 'it's a LuLu' as leisure group Rank succumbed to heavy selling and lost 5½p at 91½p. Hoping for VAT on bingo to be abolished, the market was flabbergasted to hear Captain Darling's decision to instead increase the tax burden for bingo through higher rates of amusement machine licence duty.

Bearish noises from Credit Suisse left Experian 12¼p down at 400p. The broker says it has 'deteriorating fundamentals'.

Elsewhere, Commoditrade eased ¼p to 13¼p despite fund manager Bluecrest acquiring a 5.5% stake. Associated company Corvus Capital dipped ¼p to a heavily oversold 3¾p.

Tissue Science Laboratories soared 46½p to 101½p in response to an agreed 103½p per share cash offer from US healthcare company Covidien which was spun out of Tyco.

Technology group OMG rose 2p to 54½p after its 3D mapping division Yotta DCL signed two new contracts with the UK Highways Agency. Libertas says buy and has a target price of 106p.

• More than 5m Central China Goldfields shares were traded and they touched 7½p before closing 1p better at 6⅞p. Interest in the stock was revived by additional upbeat results from its Dong Mao Huo gold project in the Nei Menggu province of northern China. These confirms significant gold and silver results on the East Hill with follow up work planned in 2008.