Market report: Monday Close
TURNOVER in Vodafone accounted for almost 20% of total stock market turnover today, the shares ticking ½p better to 126¼p as more than 370m changed hands.
US investment bank JPMorgan has raised its target for the mobile phone giant from 108p to 123p, saying pressure is mounting for it to dispose of its 45% stake in US rival Verizon. JPM's comments excited City speculators and may have stimulated a report that rival telcos and a private-equity firm were lining up a 160p-a-share takeover bid.
Verizon, which partners Vodafone in the US, Telefonica, the Spanish group that paid £18bn for O2 last year, and Blackstone, the US private-equity group best-known for its purchase of the Savoy hotels group, were said to be trying to raise funds for a £96bn offer.
JPMorgan Cazenove was claimed to be the driving force behind the move to break up Vodafone with Verizon taking the US and UK assets, Telefonica the prime European businesses and Blackstone the rest, including holdings in China and South Africa. Blackstone later poured cold water on the story.
Share prices generally were squeezed higher in thin trading, with investors reluctant to open fresh positions ahead of the Easter break. The FTSE 100 index rose 40 to 6066.1.
Contract caterer Compass led bluechips higher with a rise of 9¼p to 238¾p. It plans to return £500m to shareholders via buybacks over the next 18 months after agreeing to sell its Moto service stations arm for £1.82bn. It will also use £275m to make good its pension fund shortfall.
A consortium led by Australia's Macquarie will acquire the UK motorway restaurants while the airport and railway catering concessions will be bought by EQT Partners, the privateequity vehicle of Sweden's richest family, the Wallenbergs.
Alliance & Leicester put on 13p to 1155p despite reports Spain's Banco Santander Central Hispano has ruled out making a bid for the mortgage lender. Santander already owns Abbey and is keen to expand further across Europe. A&L shares have this year been driven sharply higher by bid talk.
Oil and gas explorer Burren Energy dipped 5p to 952½p after broker Merrill Lynch downgraded the shares from buy to neutral. It pointed out the shares have risen 18% since the autumn, and it has become more cautious about prospects and their ability to make further headway.
Keep an eye on Fantasy War games retailer Games Workshop, whose shares have collapsed from a peak of 872½p. The group warned in January that full-year profits would fail to match expectations after a softening of sales in its Lord of the Rings range.
Buyers were trying to pick up the shares in an illiquid market on Friday amid claims there was a bidder in the wings. They rose 5p to 303p today, with the spread between bid and offer stretched to 4p.
Wolfson Microelectronics tumbled 31p to 443p after US broker Goldman Sachs downgraded from outperform to in-line following a strong performance by the shares of late. Goldman remains bullish of prospects in the longer term.
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