MARKET REPORT: Shares of takeover favourite BG Group rise amid talk of £47.7bn break-up bid from Exxon Mobil

• e-mail

If mutter from the gutter is anything to go by, the brouhaha over the controversial pay award granted to BG Group’s incoming chief executive Helge Lund could prove pointless.

Dealers once again heard that BG’s independence will be threatened before Lund can get his feet under the table early next year. Shares of the perennial takeover favourite and oil and gas giant touched 937p before closing 30.9p better at 935.5p, amid talk of a £47.7bn or £14 a share break-up bid from Exxon Mobil.

BG has been rudderless since Chris Finlayson’s abrupt departure in April. He resigned after only 15 months in the job, citing personal reasons. The group was left a prime takeover target and several major companies have since been mentioned in the same breath, including Royal Dutch Shell, Petrobras and BHP Billiton. The stock has plummeted from its January peak above £13 a share and touched a low of 862p earlier this week on the back of the depressed oil price.

Broker Beaufort advised clients to fill their boots on fundamentals alone. Its assets in Queensland and Brazil are all performing on target and the shares look heavily oversold.

As one fund manager put it: ‘BG is not an oil stock, it’s more a gas stock and so should not be dragged lower with the oil price.’

A rally in the oil price to $72 a barrel helped the Footsie retrieve the previous day’s 66-point fall and a bit more. It rallied 85.73 points to 6742.10 with Tullow Oil, 24.2p better at 424.7p, BP 19.35p higher at 433.85p and Royal Dutch Shell, 84p up at 2292p, leading the rally. There was vague talk in late dealings of a possible mega-merger between the two oil giants.

Wall Street gave London a late lift by rising fast at the outset with news of a couple of mega takeover deals.

Cypress Semiconductor Corporation has agreed to buy Spansion Inc in an all-share deal worth £4bn and Japan’s Otsuka Pharmaceutical is acquiring Avanir Pharmaceuticals for $3.5bn (£2.23bn).

Persimmon eased 15p to 1525p on profit-taking ahead of confirmation that rivals Barratt Developments, 9.4p easier at 451p, and Taylor Wimpey, 3.7p off at 130.3p, will be joining the elite housebuilding team in the Footsie later this month. They will be taking the places of engineer IMI, 7p dearer at 1164p, and beleaguered oil services group Petrofac, 4.5p better at 812.5p.

White van man rental group Northgate accelerated 45.1p to 532.5p on news of a 34 per cent interim dividend hike to 4.3p per share and 70 per cent leap in pre-tax profits to £46.7m. Chairman Bob Mackenzie said that since the half-year, trading has been ‘slightly ahead’ of expectations. Growing speculation about a possible 140p a share cash bid from Playtech, lifted online gaming group Bwin.Party Digital 6.3p to 109.5p.

The speculative Gulf Keystone gushed 9.75p to 74.75p after receiving £9.5m for the crude oil exported from its Shaikan oil field. Iraq’s finance minister Hoshiyar Zebari said the two sides had agreed to the export of 300,000 barrels per day of oil from Kirkuk and 250,000 barrels per day from the northern Kurdish region through Turkey.

Worries about its extensive exposure to Russia dragged JKX Oil & Gas down 5.5p or 24 per cent to 17p. For the same reason, ITE was sold down to 145p before rallying late to close 3p up on balance at 156.25p. The group reported record full-year profits of £60.3m, up from £59.4m which reflected a good trading performance in most of its markets.

Sellers left Forbidden Technologies 3.5p easier at 16p. Sales in the second-half were expected to be broadly in line with the first half which is below previous expectations.

Howden Joinery, the kitchen designer and manufacturer, cheapened 2p to 390p despite declaring that it has now achieved £1bn sales in its UK depots in the year to date. The board said that prospects today are as exciting and promising as 19 years ago. Broker N+1 Singer’s target price is 415p.

SolGold rose 0.5p to 4.25p after reporting the highest grade copper-gold intersection to date at Hole 9 of the Alpala prospect at the Cascabel project in Ecuador.

Profit-taking following interims left Plastics Capital 5.5p off at 114.5p. The company had already flagged in September that figures had been affected by weak sales in continental Europe and the timing of new customer accounts converting into sales impacting its industrials division.

Tyratech shed 0.75p to 4.6p after warning investors that although group revenues will be significantly higher than 2013, they are likely to be below market expectations and as a result losses will be higher. The shortfall is the result of a delay in the anticipated listing of its head lice treatment Vamousse by two major US retail outlets.

Christmas hampers business Park Group provided some early festive cheer with a gain of 1.88p to 58.38p after reporting increased consumer confidence had helped sales soar 21 per cent to £58.5m in the six months to the end of September. 

A billings measure – the amount of money loaded on to a card or voucher but not yet spent – also jumped by 28.1 per cent to £75.4m. Seasonal pre-tax losses narrowed to £2.4m from £2.8m.