Market report: Friday close
LLoyd's List publisher Informa plummeted 28¾p to 385¾p today as investors reacted with dismay to the board's rejection of a £1.9bn bid from a consortium of private-equity companies.
Movers: Latest from the stock exchange
The 450p-a-share offer is 10% lower than the 506p indicative offer made in July by the venture capitalists. Informa said the reduced offer significantly undervalues the company.
Chairman Derek Mapp said Informa was 'continuing to deliver growth across the business even in the face of a weaker economic environment'.
Numis analyst Lorna Tilbian reckons 506p would have secured the deal and believes a compromise price between 470p and 480p could also win the day.
Shares in London fell after the last US jobless figures showed unemployment rising to a five year high, illuminating the teetering state of the American economy. The FTSE 100 closed down 121.4 points at 5240.7, following steep falls on Wall street on Thursday and a sell-off in Asia.
Oil majors performed robustly in earlier trading, but also fell after the US jobless numbers. BP dropped 6¼p to 499¼p.
Still, broker Cazenove is urging clients to take another look at oil following the recent plunge in prices. Analyst Fred Lucas says the simple sector-to-oil price ratio has 'collapsed.' He calculates the current share prices reflect a long-term oil price of just $50. Lucas reckons $80 a barrel is a more appropriate level.
Caz also believes investors will start returning to 'relatively low-risk quality names' in the next few weeks. Its top five picks include BP, and BG, 22p down at 1033p. It is reiterating its outperform rating on both stocks.
It also likes Dana Petroleum, down 52p at 1287p and Russian explorer Sibir Energy, down 24¼p at 490¼p.
Shell fell 52p at 1736p after confirming it will not start pumping oil again on the giant Mars platform until next week while it repairs the damage inflicted by hurricane Gustav.
Housebuilders gave up most of the gains they enjoyed earlier in the week in response to the Government's measures to bolster the housing market. Barratt gained 50p to 147p while Bovis rose 7¾p to 446¾p.
British Energy dipped 10p to 728p, throwing doubt on renewed reports that French utility group EDF is preparing a final assault to secure the UK nuclear power company following a series of meetings with some previously unenthusiastic investors.
Invesco and M&G led the campaign against EDF's cash offer of 765p and a number of sweeteners have since been suggested.
Meanwhile M&G had a meeting yesterday with Centrica. It has been agitating for the British Gas owner to make a takeover offer. At the moment, Centrica is likely to take a significant stake alongside a winning French bid. The UK Government favours the French but concern has been expressed on the other side of the Channel that British Energy's aging nuclear power stations will end up being an enormous drain on the French taxpayer.
Following those US jobless numbers, New York shares also fell, The Dow Jones down 85.3 at 11,102.9 as hopes about a recovery in the US economy were thrown back into the melting pot.
There is also growing concern about the US banking system, which needs a further injection of cash.
Tokyo shares shed almost 3% in the last session, to hit a five-and-a-half month low as investors dumped a wide range of shares on growing gloom about the global economy.
Mizuho Financial Group and other banks led the market lower. Sony slid to its lowest in nearly three years after a recall of its Vaio laptops. Sumco was the biggest percentage loser after a brokerage downgrade. The Nikkei finished 334.61 points lower at 12,223.05, having earlier dipped to 12,163.33, its lowest since 19 March.
A sell-off in Hong Kong left the Hang seng index down 636.83 at 19,752.65.
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Monday's agenda
Associated British Foods' trading statement will give investors the latest view on the health of the budget clothing market with a snapshot of sales at its Primark chain. The rest of the High Street has been struggling badly in the current economic climate, but if the price is right, will shoppers keep shopping? AB's food businesses such as Kingsmill bread have been hurting from the rising prices of raw foodstuffs. official data on factory gate prices, also out on Monday, will offer yet more evidence of rising overheads for UK Plc.
The Trades Union Congress annual conference will open with the likely endorsement of the Unite union's call for a windfall tax on energy companies. The Government is in yet another quandary over the issue as the companies argue that they need to make profits to invest for future energy supplies
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