FTSE in-depth: Activist brings spark to Kesa
Responding to a combination of stakebuilding and 150p-plus a share break-up bid speculation, Kesa Electricals sparked 8p, or 6.7% higher, to 128p.
Foster: A disappointing trading update from Barclays and a fall at Associated British Foods dragged the Footsie lower.
The third largest UK electrical retailer has been a target of activist investor Knight Vinke - once the scourge of HSBC and Royal Dutch Shell - for almost a year.
It holds 18% of the Comet owner's equity and was yesterday strongly rumoured to be adding to its shareholding with the sole purpose of instigating widespread changes at the struggling group.
At the same time, revived talk of a possible break-up of the group again did the rounds. Analysts at RBS pointed out that volume from Comet and Darty in France combined generates some buying synergies, but the argument for keeping both businesses within the group for this reason becomes less significant as Comet's losses continue to escalate.
Remember, in 2006 a 325p-a-share offer was unanimously rejected by the Kesa board for being too low.
Kesa last updated the market in mid-January when it said it had already seen signs of softening sales only two weeks into the VAT increase to 20%. Trading is said to have since deteriorated further as rival Dixons Retail's (0.1p dearer at 14.08p) recent profits warning would testify.
Kesa's next trading update is due on May 11 and analysts reckon its only saviour could be its market-leading French business, Darty, which apparently has continued to make steady progress.
Manchester-based car dealer Lookers accelerated 6p to 61p after confirming the board had rejected a speculative bid approach.
Punters are now confident that the company, which sells everything from bog standard Fords to prestige Aston Martins and Ferraris at its 90-plus dealerships which turn over more than £1bn annually, will attract other suitors.
Octogenarian property entrepreneur Jack Petchey owns 17.3% and car dealer Tony Bramall 22.3% of Lookers' equity, so they will have a major say in any takeover deal. The group's extensive property portfolio is believed to be worth at least 55p a share, so any offer will have to be in the region of £1 a share to stand any chance of success.
Private equity firm Apax and rival car dealer Inchcape (1.9p up at 360.8p) were mentioned as possible bidders.
A disappointing trading update from Barclays (14.35p down at 287.5p) and a 6% fall in the Associated British Foods share price to 984p following evidence of a slowdown in growth at its mega-successful discount retailer Primark, dragged the Footsie lower. It fell 25 points before rallying to finish only 1.2 points off at 6068.16.
After touching an overnight three-year high, Wall Street gained 95.59 points to 12,691 after the inaugural press conference fronted by Fed chairman Ben Bernanke, with the Federal Open Market Committee decision on rates due today.
Reports of a pending bullish circular helped insurer Resolution rise 11p to 305p. Buoyed by Ford's better-than-expected quarterly earnings performance, motor components group GKN added 4.9p to 221.2p.
European acquisition news whetted investors' appetites for Domino's Pizza, 49.4p, or 13% higher, at 443.3p. The company has swallowed 75% of Intergrowth Enterprises Ltd, the master franchisee for Domino's in Germany, for 2.2m shares at 1.5625p each.
The other 25% will be retained by the vendor Briskas, an affiliate of Grand City Hotels Group. Domino's said the move into a new territory gives the group access to the potential opportunity of 2,000 stores servicing around 150m people in two of the world's leading economies.
Dealers raised their glasses to pubs group Greene King, 14.4p better at 487p, following an upbeat trading statement. Like-for-like sales for the 51 weeks to April 24 in retail were up a better than expected 4.7%, benefiting from good weather and strong performance in food.
The 52nd week of 2011 will include the Royal Wedding bank holiday which should give a further fillip to trading. The British Beer & Pub Association has said that Easter and the Royal Wedding will benefit pubs' revenues by up to £600m. Analysts also gave the thumbs up to its £53.1m purchase of the Realpubs estate made up of 14 London pubs.
London & Stamford Property edged up 0.1p to 132.3p after exchanging contracts with UBS Triton Property Fund to acquire One Carter Lane and Two Old Change Court in the City of London for £75m excluding costs.
Software company Anite added 1.25p at 64p after signing a multi-year contract with TUI Travel to implement its @comRes reservation system in the travel group's UK and Ireland division.
Globeop, a global leader in hedge fund administration, eased 4p to 430p on profit-taking following an upbeat first quarter trading report. Assets under Administration (AuA) jumped 12% over the period to £102bn.
Broker Espirito Santo forecasts AuA will reach £105bn by the half-year and £111bn by the year end in December. The stock has rallied well since January's blip when a private equity player sold a 12% stake in the company at 355p a share.
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