FTSE in-depth: Ashtead buoyed by bid rumours
Around ten years ago following a strategic review, Ashtead put itself up for sale but failed to find a buyer. Two years later a consortium of US venture capitalists is believed to have made a cash offer worth around £900m, but it was rejected.
The industrial equipment rental group has somehow remained independent but punters still live in hope that a bidder might one day pounce. Revived rumours of private equity interest yesterday sparked buying of the stock and the close was 13.1p up at a year's peak of 144.6p.
Helping the stock's cause too was an Oriel Securities' 'buy' recommendation ahead of next Thursday's interim figures. Analyst Hector Forsythe forecasts a 40pc jump in first-half profits to £28.1m. But he expects a £15m loss in the seasonally weaker secondhalf, which will drag the full-year outcome back to £12.9m.
Ashtead was recently buoyed by forecastbeating results from US peer United Rentals. and Forsyth sees further growth in its US fleet division.
There's no business like snow business. Emergency services group Homeserve climbed 16.5p to 455.8p after fielding a record 7,527 calls on Wednesday. That's 40pc higher than on the same day in 2008 and 2009 as an unprecedented number of boilers and frozen water pipes cracked or buckled in the Arctic weather conditions.
The current dog of the support services sector is Mouchel. Shares of the ailing outsourcing and consulting group collapsed to 58.25p before finishing 11.5p off at 66p. Investors sprinted for the exit on hearing confirmation its lenders have appointed Deloitte to conduct a review of the business as part of its refinancing discussions.
There was no stopping the Footsie as it raced a further 125.06 points ahead to 5,767.56. After November's 2.6% decline on worries about eurozone debt, the index has got December off to a flying start, leaping 239 points in two days. Confidence has returned and bulls are adamant that the traditional pre-Christmas rally has started.
London was helped by Spain Prime Minister Jose Luis-Rodriguez Zapatero repeating yet again that the country's banking system is healthy. That helped ease dealers' disappointment that Jean-Claude Trichet opted against increasing the European Central Bank's bond purchase programme for now.
Rupert Watson, head of asset allocation at Skandia Investment Group, said: 'Our view for 2011 is currently very much half full rather than half empty. Interest rates will remain exceptionally low and equities remain cheap, especially versus bonds and cash.'
Wall Street's early gain of 76 points followed a totally unexpected 10.4% surge in October pending existing home sales. Slightly worsethan-expected US initial jobless claims were ignored and hopes are skyscraper high that today's key US employment data will show another jump in the number of jobs created.
GlaxoSmithKline, the drugs giant, was sold down to 1219.5p after US regulators ruled against the wider use of Avodart, saying the treatment for an enlarged prostate should not be used to prevent prostate cancer developing as it might increase the chances of patients suffering from more aggressive forms of the disease. A late rally left the close 10.5p dearer at 1241.5p.
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Shares of car and aerospace parts manufacturer GKN accelerated 15p to a two-and-ahalf-year high of 210.4. Buyers stepped on the gas after US auto sales showed a 17pc rise in November from a year ago.
Chairman Jacques Nasser's purchase of 40,000 shares at 2,259.77p and firmer metal prices helped mining giant BHP Billiton end the day 87p higher at 2450p. Vedanta Resources advanced 127p to 2172p. Hoping to enjoy a bumper festive trading season, luxury goods group Burberry cut a dash at 1099p, up 67p.
As rival sports retailer JJB Sports (1.04p down at 4.75p) struggles to survive, trendier high street group JD Sports apparently continues to thrive. Its shares rose 69p to 861p.
Premier Foods added 2.02p at 18.53p following reports that the world's biggest food group Nestle is in talks to buy the meat-free food range Quorn from the debt-laden group for around £230m.
The snow's severe disruption to horseracing and fears the cold snap will continue well into next week left bookmaker Ladbrokes friendless at 125.2p, down 0.4p.
A Morgan Stanley recommendation and an increase in target price to 920p from 840p attracted buyers to Synergy Health, 19p to the good at 819.5p. Medavinci, a gold play in Serbia, eased 0.02p to 0.465p on talk of an imminent fund-raising.
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