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FTSE in-depth: New M&S online boss welcomed

By Geoff Foster for MailOnline
Updated: 04:02 EDT, 9 February 2011

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She's obviously good, but is she that good? Laura Wade-Gery's appointment to the board of Marks & Spencer to head its dotcom operation put a further £206m on the retailing giant's market capitalisation.

Foster: The resilient Footsie shrugged off Chancellor George Osborne's decision to increase the levy on banks.

The shares advanced 13.5p more to 373.5p, taking its value to nearer £6bn.

Sector analysts sang the former Tesco (6.1p easier at 396.15p) executive committee member's praises. Clive Black at Shore Capital said: 'It's a potentially tremendous appointment as she has enormous mass-market experience in e-commerce with one of the world's most effective operators.'

But it wasn't just Wade-Gery's transfer from one retailing icon to another which got the stock moving sharply north. Revived takeover gossip also saw professional punters swell turnover in the stock to almost 28m.

Rumours of an £8.7bn or 550p-a-share bid from the Qataris or from a cash rich private equity player certainly got dealers excited.

Marks & Spencer has underperformed for months. It still trades below £4 a share, the level at which billionaire entrepreneur Sir Philip Green bid in 2004 before walking away after gaining the support of 34% of M&S shareholders.

But an industry ace said: 'The one big stumbling block for anyone interested in swallowing Marks & Sparks is its burgeoning pension deficit. No pension fund trustee is likely to give any leverage to a bidder.'

M&S in May of last year agreed to pay £800m to plug its gaping pension deficit. It said it would pay £36m for the next three years and that will rise to £60m a year until 2018.

On the other side of the street, rival Next rose 41p to 2038p on hearing that UK retail sales bounced back in January, with like-for-like sales up 2.3%.

The resilient Footsie advanced 40.30 points more to 6,091.33, shrugging off Chancellor George Osborne's decision to increase the levy on banks and China's move in increasing interest rates for the third-time since mid-October to curb spiralling inflation.

Wall Street drifted lower initially despite news of another big corporate deal. Kindred Healthcare Inc is to purchase RehabCare to create a major post acute healthcare services company.

Satellite communications group Inmarsat jumped 25p to 712.5p after Harbinger Capital Partners is reported to have sold its remaining 14pc stake at 670p a share. In October, Harbinger raised £410m from the sale of 65m shares at 630p each.

The sale lifts uncertainty and overhang fears on the Inmarsat share price but also begs the question of why Harbinger is selling out completely. Is it in need of the cash?

Buying ahead of the annual results due later this month and revived bid talk helped components group GKN accelerate 11.1p to 210.3p. Honeywell bid talk accompanied a gain of 29p to 1404p in industrial group Smiths.

Mining stocks came on offer amid fears the Chinese interest rate hike of 25 basis points could dent demand for precious metals. Eurasian Natural Resources lost 15p to 1029p.

Premier Oil crashed to 1961p before closing 146p lower at 1993p after saying it would abandon a well at its Catcher field in the Central North Sea, after finding lower-thanexpected amounts of hydrocarbons at the site.

As a result it lowered its reserve estimate for the entire Catcher field to a range of 40m to 80m barrels of oil from 60m to 100m.

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Nautical Petroleum, which has a 15pc stake in the Catcher field, plummeted 87p to 454.5p and Encore Oil, which also has a 15% stake and is the operator of the licence, shed 23.5p to 127.75p. Analyst Ashley Kelty at Cenkos advised clients that the fall in Encore is overdone.

There is significant upside across the rest of the Catcher block in numerous prospects that have been identified. Encore should have significant news flow and corresponding value drivers over the coming months as the exploration programme progresses.

Insurer Beazley climbed 7.9p to 128p after reporting better-than-expected annual results. It remains on the look-out for takeovers after failing to acquire Lloyds of London rival Hardy last year.

Car dealer Pendragon, in which Crispin Odey's hedge fund sits on 8.8% and Schroders 10%, purred 2.5p higher to 23.25p amid whispers of a bid from Lookers, 2.25p dearer at 63.75p.

Speculative buying fuelled by talk of an imminent announcement helped InternetQ add 11p at 163p.

Industry minnow Sefton Resources firmed 0.325p to 2p as punters piled in, believing it to be the cheapest oil and gas producer in the market.

Sareum Holdings added 1.165p more to 1.65p in hefty trading after the specialist cancer drug discovery firm on Monday reported positive results for its compounds targeting acute myloid leukaemia, the most common form of adult leukaemia.

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