FTSE in-depth: Another bid for Tullett Prebon?

By Geoff Foster for MailOnline
Updated: 06:23 EDT, 12 March 2011

As it did almost exactly a year ago, Tullett Prebon is believed to be about to announce another bid approach.

Tullett Prebon: Believed to be about to announce another bid approach

The world's second-largest inter-dealer broker attracted predatory interest in 2010 immediately after its full-year results in early March, but talks with the unnamed party were terminated two months later.

Dealers now hear that a foreign bidder is sniffing around although that was not reflected in yesterday's close of 395.35p, down 3.6p, which values the group at around £850m.

Australian group Macquarie and Bank of China, the fifth largest bank in the world, were two names in the frame last year while talks were ongoing.

One or the other could yet be interested although CME Group, which owns and operates large derivatives and futures exchanges in Chicago and New York City, was last night being touted as a possible bidder.

It will have to be an offer near-£5 a share to persuade major shareholders to sell. They include abrasive pugilist Terry Smith who sits on a 4.48% stake, currently worth around £39m.

Tullett Prebon this week blamed broker defections in North America following a 'raid' by US rival BGC Partners for an 11pc fall in 2010 profits to £139.7m. It is currently seeking substantial damages from BGC in the courts.

Back in September 2008 takeover talks with GFI, the largest inter-dealer broker of credit derivatives trades, ended merger discussions, again over price.

Word is Terry Smith wants to sell his 10m-plus shares so that he can then pile some more of his own money into his new fund management 'baby', Fundsmith.

He launched it in November with £25m of his own cash and hopes to use his heavyweight profile to promote the firm and attract big name fund managers.

Insurance stocks bore the brunt of some early heavy selling after the world's fifth-biggest earthquake on record hit Japan, causing a devastating tsunami which has left hundreds dead and buildings and cars wrecked.

Fears that the natural disaster could cost the industry up to £30bn in claims dragged RSA Insurance down 3.5p to 133.05p, Prudential 14p to 721.75p, Legal & General 2.3p to 115.2p and Standard Life 3.7p to 223.35p.

Lloyds brokers Amlin lost 20.3p to 385.15p and Catlin 16.3p to 350.05p.

After Far Eastern markets fell sharply with the Nikkei ending 1.8% down, the Footsie was marked lower amid concerns nervy investors would run for the exit.

However, selling was fairly light. It recovered from 49 points down to finish only 16.62 points lower at 5,828.67.

It closed 2.8% lower on the week as risk appetites have been hurt by not only yesterday's events in Japan but sovereign debt crises and civil wars in the Middle East.

Wall Street also gave a muted response to the catastrophe in Japan. It traded 29 points lower in early trading following mixed economic data. US consumer sentiment fell to a five month low in early March, but business inventories rose.

World cruise line operator Carnival nosedived 72p to 2601p after reporting disappointing first-quarter figures.

It warned that since December's full-year figures, fuel prices have significantly increased. At current spot prices for fuel and currency exchange rates, 2011 earnings per share would be lower by approximately $0.40.

British Gas firm BG Group, which earlier this week denied it had any intention of buying Iraqi assets owned by Heritage Oil, jumped 41p to 1459p amid revived rumours of a bid from Royal Dutch Shell.

Meanwhile, Heritage, still being mentioned in the same breath as OMV, added 9.7p at 319.85p. Nautical Petroleum gushed 24p to 430.75p after providing a bullish update guidance on the oil in-place at Kraken, its UK North Sea pre-development stage heavy oil field.

Still friendless after boss Tim Steiner sold £5m worth of stock at 254.1p last month, online retailer Ocado dropped to 191.8p before closing 6p lower at 198.65p. They have now fallen over 30% in three weeks.

Tilbury Docks owner Forth Ports advanced 7p to 1614.5p as punters bet on Arcus, the former Babcock and Brown's European infrastructure business, having to soon increase its £746m, or 1630p a share, offer. Forth owns seven UK ports and 400 acres of land on Edinburgh's waterfront.

It will be releasing an external valuation of its development land bank at its results on March 22. Shareholders will then decide whether to accept Arcus's first offer but that is considered to be unlikely.

Doorstep lender Provident Financial cheapened 9p to 947.75p after chief executive Peter Crook sold 75,043 shares at 975.91p a pop.