The Guardian: Bid talk sends ITnet soaring: “Desire Petroleum continued its rampant rise. The stock gained 4p to 61.5p - it started the year at 10p - on hopes the oil exploration firm, which has sites off the Falkland Islands, is poised to link-up with an oil major. Whispers around the City have hinted at Shell as a possible partner.” (ShellNews.net) 13 Nov 04
Saturday November 13, 2004
With the main index capping off a good week with yet another rise, traders spent yesterday chasing bid rumours among the second liners with IT consulting and services group ITnet thrust into the spotlight.
Shares in the company raced 21p higher to close at 235p as traders whispered of a bid for the business at around 300p. The company has had its ups and downs this year. The shares dropped 30% in June as ITnet lost a key government contract.
There was plenty more bid action yesterday - both real and speculated. The day's most spectacular rise was put on by the UK version of eBay, QXL Ricardo, up 212.5p at 540p after the online auction site announced that it is in talks that could lead to an offer. The dot.com survivor - which floated a few weeks after Freeserve - was keeping quiet about its possible suitor but traders immediately jumped to the conclusion that eBay has decided to buy out the business. QXL was worth £280m when it joined the market in October 1999 at 195p. Since then the loss-making business has joined the 1% club - companies whose value fell to just 1% of its peak valuation - and been forced to carry out a one for 1,000 share consolidation. Even with yesterday's incredible rise the business was valued at just £7.7m.
Fellow dot.com business, ebookers jumped 10.5p to 292p on talk that half-year figures from the online travel agent on Monday will include a long-awaited bid for the company, which first admitted it was in talks in September.
Countryside Properties rose 0.5p to 271.5p during the trading session on talk of a possible approach. After the market had closed the property group admitted it had received and agreed an offer at 275p per share from a buyout vehicle run by chairman Alan Cherry and his family. The bid values the business, which admitted it was in MBO talks in September, at £218m and is backed by HBOS.
Elsewhere, advisers to both Novar and Melrose were active yesterday as shares in both the industrials group and its cash shell suitor rose following Thursday's rejected £625m offer. Melrose, up 4p at 134.5p, portrayed the rise as a signal of the market's acceptance that its hostile bid makes sense. On the other hand Novar, up 4.5p at 155.5p, preferred to see the rise as the market realised how fundamentally undervalued the industrial group has been until now. There was continued bid speculation in MFI, up 3p at 115p and the London Stock Exchange, up 9p at 396p.
Away from all this talk of bids the FTSE 100 ended up 17 points at 4793.9 with volume of 3.1bn shares boosted by almost 150m Abbey National shares.
The blue chip index ended the session at its best level for 29 months, extending a three day winning streak by another session. The rising markets buoyed investment stocks Amvescap, up 14.5p at 327.75p, and Man Group, up 39p at 1342p.
BSkyB closed up 22p at 554p after the group's stronger than expected subscriber figures, while Corus closed up 1.5p at 55.5p ahead of its inclusion in the index on Monday when Abbey is removed.
Away from the blue chips, the FTSE 250 closed up 46.6 points at 6582.3 and the smallcap at 2678.5 up 15.9 points. Marconi ended 1.5p up at 565.5p as UBS initiated coverage on the telecoms equipment company with a buy and 726p share price target. However, LogicaCMG eased 7.25p to 196.5p as Deutsche Bank cut its stance on the IT services firm to hold from buy.
Down among the minnows, Nettec lurched 0.25p higher to 7.5p as Acquisitor Holdings - the investment company that took over Baltimore Technologies - revealed it has bought a further 2.1m shares in the cash shell taking its stake to 27.4% from 25.7%.
Down on Aim, media group Ten Alps Communications added 2.5p to 44.5p as it announced a number of new events contracts, including running a festive lighting show along London's shopping thoroughfare Oxford Street.
Aerobox added 0.5p to 14.75p after the maker of air cargo containers announced plans to raise £4.8m through a share placing but the funding situation at Ringprop does not look so rosy.
The Aim-listed propeller designer, embroiled in a row with its former chief executive, yesterday revealed widening full-year losses and admitted that it will need to raise more cash to roll out its product next year. The stock dropped 32.5p to 285p.
Elsewhere among the minnows, Desire Petroleum continued its rampant rise. The stock gained 4p to 61.5p - it started the year at 10p - on hopes the oil exploration firm, which has sites off the Falkland Islands, is poised to link-up with an oil major. Whispers around the City have hinted at Shell as a possible partner.
Hardman Resources dipped 1.75p to 79p as chief executive Ted Ellyard sold over 3.5m shares. While he retains about 2m shares, such a mammoth share sale just a few days after the firm revealed one of its exploratory wells offshore Mauritania was dry, worried investors.
But a spokesman for the firm said Mr Ellyard is moving into a non-executive role for personal health reasons.
Elsewhere among extraction firms, European Goldfields added 12.5p to 154p as the gold miner with assets in Romania and Greece, announced good third quarter figures. The stock was also buoyed by better than expected drilling results in Romania.
Christmas traditionally provides a fillip to the retailing sector - which makes the stance taken by stockbroker and fund manager Walker, Crips, Weddle, Beck (WCWB), to have practically no exposure to the sector, all the more brave.
WCWB, which reported a near-30% rise in half-year profits yesterday, is dreaming of a damp Christmas. It thinks consumers, battered by interest rate rises and made uneasy by the faltering housing market, will rein in their festive spending.
"We do not think this Christmas is going to be particularly buoyant," said investment director Stephen Bailey. "The feelgood factor has gone."
While it has small holdings in Somerfield and Tesco, WCWB prefers transport stocks, such as Forth Ports, and mining plays, especially in coal, such as Anglo Pacific and Cambian Mining.
WCWB's own shares rose 10p to 146p yesterday after it reported profits of £639,000 for the six months to the end of September, against the previous £493,000. Its strong performance has continued into the second half of the year, WCWB said.