MARKET REPORT: Bid hopes boost Smith & Nephew
SMITH & Nephew hit a high yesterday on renewed bid speculation.
Shares in the artificial hip and knee specialist closed up 34p to 1064p as Berenberg suggested a bid of about £12-a-share from US rival Stryker would make “strategic and financial sense”.
But the broker reckons Stryker, which last week ruled out a bid following speculation it was preparing to make a move for S&N, is likely to wait until potential regulatory concerns over another healthcare mega-deal involving Biomet and Zimmer are resolved.
In the meantime, S&N will be looking to pick up market share resulting from any disruption caused by the merger of Zimmer and Biomet.
Cruise and financial services group Saga, off 5½p to 172½p, sank further below its 185p float price, but another recent new issue, discount retailer Poundland, was marked up 11p to 354p as JPMorgan Cazenove told clients to buy with a 377p target.
The broker believes Poundland could follow up its ambition to launch a trial in Spain by opening 90 stores there by 2020.
Packaging group Mondi delivered a 20p rise to 1095p after buy support from Jefferies, but National Grid and advertising giant WPP fell 47p to 830½p and 27p to 1261p as their shares traded without the right to the latest dividend.
Mid-cap ex-divi casualties included Russian steel producer Evraz, 3¾p softer at 96¼p, and department store Debenhams, down 2½p to 74½p.
The FTSE 100 Index closed 17.67 points lower at 6818.63.
Business space provider Workspace Group gained 24½p to 608½p after annual pre-tax profit soared by 230 per cent to £252.5million, but electronics parts supplier Electrocomponents dipped 7½p to 278¾p as Credit Suisse turned bearish citing a slowdown in organic growth and rising costs.
Investors were left underwhelmed by a new gas discovery in Tanzania by Ophir Energy, off 6½p to 253p, while interdealer broker Tullett Prebon reversed 16½p to 287½p as takeover speculation cooled.
Baby goods retailer Mothercare added 11¾p to 193p amid takeover speculation, while mobile banking technology firm Monitise rang up a 3¼p rise to 66½p as it hired former Visa executive Elizabeth Buse to co-run the business alongside founder Alastair Lukies.
On Wall Street, the Dow Jones was 15.19 points higher at 16,737.53 by close.