FTSE in-depth: Kloppers eyes Woodside bid

By Geoff Foster for MailOnline
Updated: 03:10 EDT, 29 March 2011

Come on down BHP Billiton boss Marius Kloppers. Mining industry sources say he is ready to splash the cash.

Foster: The Footsie shrugged off the turmoil in the Arab world and revived worries about eurozone.

After a miserable two years which saw BHP Billiton, the world's largest miner, embarrassingly have to fork out a staggering £545m in advisers' fees following a batch of failed multi-billion pound corporate deals, he is said to be on the verge of acquiring Royal Dutch Shell's (20p off at 2238p) remaining unwanted 24% stake in Woodside Petroleum valued at around £5bn.

Dealers reckon the move could be a precursor to BHP launching a full-scale cash bid for the Australian petroleum and exploration group.

Woodside Petroleum has said it is working 'constructively and professionally' with Shell on finding a home for the 24% shareholding after being caught off guard in November by Shell's decision to sell 10% of the group.

Woodside's shares have been on fire downunder amid intense BHP speculation, with local analysts suggesting that the liquefied natural gas assets of Woodside would fit like a glove into BHP's burgeoning empire.

Kloppers has been champing at the bit to become a bigger player in the LNG market given that Woodside is sitting on three of the world's major LNG projects. Those being Browse in Western Australia, Sunrise in the Timor Sea and Pluto in the north west of Karratha, Western Australia.

BHP Billitons shares advanced 15.5p to 2363.25p on hopes that Kloppers will this time pull off a big deal. He failed in 2009 with a £93bn proposed takeover of global rival Rio Tinto and then had a joint offer for Woodside Petroleum with Royal Dutch Shell abandoned.

Plans to create the world's largest iron ore exporter in a joint venture with Rio Tinto were also scuppered and a £24bn offer for Canada's Potash Corporation ruined by opposition from the Canadian government.

Cairn Energy gushed 7.6p to 455.1p after UBS upgraded to buy and lifted its target price to 510p from 440p ahead of May's update on its operations in Greenland.

Shrugging off the turmoil in the Arab world and revived worries about eurozone debt, the Footsie marched up to 5922 before closing 3.73 points better at 5,904.49. Wall Street helped London's cause, rising 30 points at the outset on hearing that pending US homes sales unexpectedly gained 2.1% in February, while US consumer spending rose for the 8th straight month.

Amid reports of pending upbeat circular and revived gossip that an earnings enhancing acquisition could be on the cards, insurer Resolution rose 8.1p to 289.9p.

Fashion group Burberry strutted its stuff with a gain of 31p at 1147p. Buyers appeared after the firm announced a joint venture deal with Saudi-based retailer Fawaz Abdulaziz Alhokair to market Burberry's wares throughout the region. The stock is also on Exane BNP Paribas's bid hit-list.

Sporadic bouts of selling ahead of today's trading update left hedge fund Man Group 5.5p easier at 244.5p.

Worries about occupancy rates dragged InterContinental Hotels 48p lower to 1229p. The hotel giant said it expects to open a new brand of hotels specially developed for the Chinese markets in 2012 or 2013.

Sellers were all over Aquarius Platinum like a rash and the close was 25.7p down at 344.3p. It followed news late on Friday that the government of Zimbabwe has said miners have six months to carry out its Economic Empowerment Act, under which Zimbabweans must hold 51% of shares in foreign mining companies.

More than 10% of Berkeley Mineral Resources' share capital changed hands and the close was 0.38p better at 7.33p. Punters responded to the company's acquisition of the remaining lead and zinc stockpiles at the Kabwe Mine in Zambia.

Aberdeen Asset Management edged up 1.1p to 209.5p following an upbeat pre-close trading statement. It has continued to see net inflows into its Global Emerging Markets and Asia Pacific Funds in recent months.

Assets under management now stand at £176.2bn. Singer Capital Markets says buy because the current rating continues to undervalue the business.

After announcing it intends to make use of shareholder authority to buy-back up to 20.5m, or 10%, of its own shares, Micro Focus added 6.1p at 314.7p. The purchases will be funded from cash balances and debt facilities.

Senior Engineering eased a fraction to 148p following the £15.3m acquisition of Damar Machine Company of the US. Damar manufactures precision machined components for the aircraft industry. Shore Capital says the deal is very sensible and Senior's shares remain cheap.

Corac, the compressor technology specialist, rose 0.38p to 15.5p after entering into a Memorandum of Understanding with a global market leader in the compressed air industry.