FTSE in-depth: Travel firm deal may be exposed

By Geoff Foster for MailOnline
Updated: 03:42 EDT, 14 December 2010

Many of Travelzest's clients like it all to hang out. It owns Peng Travel, Britain's biggest nudist holiday operation.

Foster: The chances of the fabulous Footsie breaching the magic 6,000 before Christmas increased.

Not much fun in this weather I know but its shares yesterday enjoyed the warmth of a penny gain to 18p as rumours that struggling fund manager Gartmore had been approached to name a price for its 30pc stake attracted buyers.

Whispers suggested that TUI Travel (5.8p up at 238p) will do a deal with Gartmore before swallowing Travelzest with a knockout cash offer worth £50.75m or 35p a share. Travelzest, whose other brands include Canadian online travel agent itravel2000 and The Malaysia Experience, was saved from the brink of collapse in September 2009 when top management bet their shirts on its success.

It managed to raise £2m cash after placing 4m shares with investor Merchant Securities.

The board announced in April that trading for the half-year had shown a strong improvement.

It continues to cut costs and has moved its head office to Canada. After a torrid couple of years, recovery is well underway and that has not gone unnoticed by the industry's big boys.

The chances of the fabulous Footsie breaching the magic 6,000 before Christmas increased as magnificent miners responded strongly to impressive data from China. The elite index jumped 47.8 points to 5,860.75 after Chinese inflation hit a new 28-month high in November whilst industrial output rebounded from a dip in October to rise 13.3% year on year.

Investors were mightily relieved that the Chinese authorities refrained from raising interest rates and as optimism increased that the recovery is gathering pace, the price of copper for three months delivery rose to a record $9,138.50 a metric tone.

In reply, Fresnillo advanced 61p to 1594p. Kazakhmys, which revealed its copper production had risen 3.6% year-on-year, closed 63p higher at 1592p, while Antofagasta added 46p at 1543p.

Oil services group Petrofac surged 50p to 1493p, excited by GE's £800 bid for Wellstream, 43p up at 790p. Professional punters switched on to a late jackanory that a private equity player could be lining up a mega cash bid for energy group Scottish & Southern, 11p better at 1136p. Vague bid talk also prompted a 7.4p gain to 311p in can maker Rexam.

Ground engineer Keller jumped 19.5p to 615p after Goldman Sachs upgraded to buy from neutral. The broker believes rising growth in US gross domestic product provides a positive environment for Keller which derives 40% of its revenues from the US.

Shares of pubs group JD Wetherspoon were as flat as a pint of homemade scrumpy after Numis downgraded to hold from add. The close was 20p off at 435p.

Broadcaster ITV improved 1.2p to 74.2p after attracting a reported audience of almost 20m and £20m-plus in advertising revenue during Sunday's two-hour X Factor final which saw winner Matt Cardle singing all the way to the bank.

Strong interim results lifted smallcap broker and wealth manager Merchant Securities a penny to 23.5p. First-half pre-tax profits jumped 80pc to £524,000, helped by the growth in private client business and increased corporate activity. Arden's target price is 30p.

Speculators chased Amur Minerals 4.37p or 85% higher to 9.5p on hearing the company has received a green light from three of the four Russian agencies required to grant it a mining licence for the Kun-Monie nickel-copper project.

Kalahari Minerals eased 1.5p to 233.5p following a £41.76m fundraising at 232p a share. Cash raised will satisfy private placing commitments with Extract Resources, increasing its shareholding in Extract to 42.83%.

Petra Diamonds sparkled at 119p, up 5p, after taking its shareholding in the Koffiefontein mine in South Africa to 74% from 70%c. It bought the additional 4% from its black economic empowerment partners. Broker RBC raised its target price to 160p from 140p.

Westhouse Securities is a fan of Chaarat Gold, 7p up at 71.5p. It lifted its target price to 107p from 82p because the company has achieved a number of positive operational developments to fast track its gold projects towards near-term production and it remains undervalued.

After announcing an agreement with Eaga Heating Services for the nationwide supply of its VXI energy saving device, VPhase edged up 0.25p to 2.38p. The agreement runs for a minimum of three years and targets sales of more than 5,000 units per year.