Market report: Tuesday close
No one can quite decide which High Street chain those troublemakers at Baugur are going to bid for - but everyone assumes they are going to do something serious soon.
The picture got cloudier, and more intriguing, today when it emerged that a consortium it leads has taken a near-5% stake in Debenhams.
Unity Investment, a vehicle that groups Baugur with fellow Icelanders FL Group and retail entrepreneur Kevin Stanford, revealed to the stock market that it has been a hefty buyer of the shares in the past few days.
It crossed the 3% threshold on 7 June and the 4% level a day later, which partly explains why shares in the department stores chain have performed so strongly of late.
Debenhams added another 2½p to 143¾p on the news, as long-standing talk that the company could be taken private resurfaced. It has struggled to readjust to life back on the stock market and could do with another period out of the glare of public markets, say critics.
Baugur owns a host of High Street names including House of Fraser and Hamleys toyshops. It also has stakes in numerous other famed UK names, such as Woolworths.
South African IT company Dimension, a rumoured takeover target for BT, closed down ½p at 52p after a strong day. The shares quickly fell back to 52p after the initial excitement died. 'BT would have to be desperate,' said one market observer.
The early trends today were negative, with HBOS leading the fallers, down 40p to 1030p. The FTSE lost 47.1 points to 6520.4 as the first trades of the day went through.
EMI put on 1½p to 272½p as investors readied for a bid from America's Warner Music. It has already agreed a sale to Guy Hands' Terra Firma but rival approaches are expected.
Over on Plus Markets, the unofficial stock market that used to be Ofex, shares in Manchester City were stagnant at 40p. Doubts over the likelihood of the football club being taken over by former Thai prime minister Thaksin Shinawatra grew after the Thai government froze his assets. Advisers to City are seeking assurances today that the £90m deal is not in jeopardy.
Wall Street had a rare quiet day yesterday - a welcome respite from recent volatile sessions. Such excitement as there was emerged from health insurance giant WellPoint, which recently lost finance chief David Colby.
It turns out Colby was ousted due to affairs with numerous women, including two sisters, both of whom say the 53-year old had offered to marry them. WellPoint said Colby had violated the 'company code of conduct'.
The shares slipped 25 cents to $81.31 on the New York stock exchange in lacklustre trading that saw the Dow Jones end up a mere 0.57 points at 13,424.96. The broader S&P 500 put on 1.45 to finish at 1509.12, just 30 points below its all-time high.
Tokyo's Nikkei Average closed down 73.57 at 17,760.91, while Hong Kong's Hang Seng index was off 62.96 at 20,552.53 at the lunchtime break.
TAKING STOCK
BANKING AND FINANCE
Buy-to-let and self-certified mortgage lenders will be especially vulnerable to rising interest rates if house prices fall, says Standard & Poor's. It sees Bradford & Bingley and Britannia Building Society as possibly two of the worst-affected.
BUILDING AND PROPERTY
Cazenove added to Workspace's woes after yesterday's dismal trading update at the serviced offices company. Workspace warned about the difficulties posed by rising interest rates so Caz dropped its call from 'in line' to 'underperform.'
CONSUMER
Sports Direct, the retail chain majority-owned by tycoon Mike Ashley, has again upped its stake in Wilson tennis rackets maker Amer Sports, a further share purchase taking his stake up to 5.4% from 4.9%.
ECONOMICS
Bank of England Governor Mervyn King's decision to state last night that the market should expect higher interest rates was seen as evidence he was spelling out more clearly the Bank's thinking. He listed several inflationary elements that were worrying it.
ENGINEERING
Venture Production, the engineer to the oil services industry, has revealed that its finance director, Marie-Louise Clayton, sold 216,268 shares at 716.42p each. The deal nets her more than £1.5m.
HEALTH
GlaxoSmithKline shares are a buy all the way up to 2300p, says broker Collins Stewart, partly because its Promacta drug could be a breakthrough in treating liver disease. The drugs giant is in talks with US regulators about Promacta.
LEISURE
Analysts welcomed cruise operator Carnival's decision to buy a new 2100-passenger ship for €425m (£288m). The vessel will be for Carnival's Holland America cruise line, which is growing rapidly, along with the overall global cruise industry.
NATURAL RESOURCES
Shell engineers have started to repair a pipeline leak in Nigeria that has since last month been holding back 77,000 barrels of crude a day. But a Shell spokesman would not comment on how long it will take to resume full production.
RETAILING
Jewellery group Signet, owner of Ernest Jones and H Samuel, has been downgraded to hold from buy by Deutsche Bank after last week's trading update. The UK is faring well, but Signet warned of slowing sales in the US, its biggest market.
SUPPORT SERVICES
Infrastructure group Jarvis has been hit by a slowdown in new contract wins at its rail division during the second half of its financial year. Analysts at Brewin Dolphin cut their annual profit forecasts by £3.5m to £1.5m as a result.
UTILITIES
Shares in Biffa dived 19p to 303p as the waste-collection company admitted it is facing stiff competition in the private sector clearing bins from offices and shops. It was cautious about the current year after reporting a 7% rise in operating profits to £90m for the year to March.
TRANSPORT
Citigroup today revised its call on the US transport sector, cutting its advice on the cars and components sector to underweight from market weight but raising the overall transportation sector to 'overweight' from market weight.
TELECOMS
Nordic telecoms group TeliaSonera's chief executive Andres Igel is leaving. He took over when Sweden's Telia merged with Finland's Sonera Corp, and was highly regarded for the way he integrated the companies.
INDUSTRIALS
Fund managers welcomed Marwan Lahoud's appointment as chief operating officer at Airbus maker Eads. He takes over from Jean-Paul Gut, who is leaving after a dispute over marketing and sales organisation.
MEDIA
Investors have high hopes Warner Music will follow through on an executive's reported pledge that it was 'more likely than not' to make a new bid for EMI, which has agreed a £2.4bn takeover from Guy Hands' Terra Firma.
TECHNOLOGY
IT group Civica, whose recent contract wins have included management systems for public libraries in the South-East, has received a takeover bid from a private-equity fund. The company is valued at £150m.
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