The Guardian (UK): Suitors queue for Somerfield:  “Shell gained 12p to 496p on talk it may launch itself into a $13bn (£7bn) acquisition of Australia's Woodside to bolster reserves…” (ShellNews.net) 8 April 05

Richard Wray

Friday April 8, 2005

Talk that Somerfield will receive a new and improved takeover offer from Icelandic predator Baugur within days helped spur shares in the convenience store operator yesterday.

Traders were whispering about Baugur, whose 190p per share offer was spurned a month ago, tabling an offer at around 205p which is likely to spark a bidding war. Some of the more optimistic players in the market were suggesting that the price could go as high as 240p.

Rumours abounded that the other interested bidders - London & Regional Properties, controlled by Richard and Ian Livingstone, and a consortium led by Robert Tchenguiz - have already met Somerfield's management.

In fact neither party has yet had a meeting with Somerfield, and nor have they been granted access to its books. The most recent rumoured bidder, the property group Topland, run by multimillionaire Sol Zakay, has also failed to show its hand to the Somerfield board so the speculation is likely to run and run.

Back in the main market, the FTSE 100 closed up 29.6 points at 4977 with BG racing 10.75p higher to 430.25p on continued speculation of a possible takeover of the gas company. Talk about a bid for BG gained even more momentum when a block trade of 50m shares went through the system at 430.25p at the close of the session. BG was the third most heavily traded stock on the exchange, although that one trade amounted to less than 1.5% of the company's stock.

Shell gained 12p to 496p on talk it may launch itself into a $13bn (£7bn) acquisition of Australia's Woodside to bolster reserves but another stock at the centre of bid speculation, Exel, went into reverse. The stock eased 9.5p to 888p on talk that rumoured predator Deutsche Post only wants to bid for part of the logistics group.

Barclays added 2p to reach 553p as Merrill Lynch put the stock on its Europe One list, while WPP gained 12p to 618.5p after CSFB told clients it is time to buy the stock and upped its target price to 690p from 615p. The broker was also positive about Diageo, up 4p at 790.5p, after a meeting with the company's management.

Vodafone closed 1.5p higher at 142.25p as analysts saw some small reason to be cheerful in an otherwise poor set of results from the group's Japanese business, which lost subscribers for the third consecutive month. Some analysts had hoped that Vodafone might show growth but instead it lost 7,400 customers in March. But that is still well down on the 53,200 lost in February and 58,700 who defected in January, which analysts said at least points in the right direction.

Tate & Lyle was going in the opposite direction, down 15p at 512.5p, on speculation that the sugar and sweeteners group is heading for a profit warning after US rival Corn Products International warned its first quarter results will be down 40% because of high raw material costs. Like Tate, Corn Products is a major producer of high-fructose corn syrup used in fizzy drinks.

Away from the blue chips, the FTSE 250 closed up 22 points at 7239.5 with the small cap index up 11.7 at 2918.7. Shares in JJB Sports gained 7p to 219.5p as Harris Associates, one of the hedge funds that derailed Deutsche Börse's bid for the London Stock Exchange, appeared on the retailer's shareholder register with just over 3% of the company, fuelling bid speculation. The company's annual results, due next Wednesday, are also expected to be good.

Ark Therapeutics added 2p to 119p as CSFB raised its target price on the stock to 163p from 144p, while shares in Rathbone Brothers gained 7p to 815p as the fund manager withdrew its offer for rival Rensburg, down 3.5p at 592.5p, after three months of arguing, during which Rensburg's board refused to back the offer.

Speedy Hire added 14.5p to 649.5p following a trading update in which the construction equipment rental firm said it is confident it will meet analysts' forecasts.

Down on Aim, there were fresh blows in the punch-up between biotech group Medical Marketing International and Gary Waanders, a free-thinking analyst at brokers KBC Peel Hunt.

A couple of weeks ago Mr Waanders published his view that the company was worth nothing like the £150m market value at the time. On Tuesday this week Medical Marketing's management gave the sceptic their views in person, but clearly failed to change his mind. Mr Waanders emerged to publish a five-page "sell" note supporting his "not more than £20m" stance. The shares, having climbed from 40p at the start of last year to 300p last month, dived 9% to 211p.

Elsewhere, Concateno had a successful first day of dealings. Having been placed at 100p, raising £5m, the stock closed at 142.5p. Concateno is a cash shell, headed by Keith Tozzi, the former head of Mid Kent Water, which is looking to buy and manage water businesses in the UK and overseas. With East Surrey Holdings, up 48p at 523p, admitting it has received a bid approach, the water sector is obviously back on the boil.

Also enjoying a good start to life as a listed company on Aim was FDM Group. Shares in the IT services firm closed at 83.5p after being placed at 78p.

Finally, dealers reckons trading will also be brisk in Gulfsands Petroleum when the oil exploration group floats on Aim this morning. Gulfsands, which raised £30m through a placing by Seymour Pierce, is based in Texas but is looking to clinch a major oil deal in Iraq.

March makeover

Expect fireworks when March Networks comes to Aim this month. The Ottawa digital surveillance firm, which is seeking a dual listing on the Toronto exchange, is the latest brainchild of Welsh billionaire Sir Terry Matthews.

He owns 53% of the business, and is seeking to raise £30m to £35m to fund its expansion into Europe and the far east.

March Networks provides everything from cameras on bank cash machines to CCTV in retail outlets and on trains. It is likely to be valued at up to £110m.

Almost a year ago Sir Terry brought Newport Networks, the internet company, to Aim, at a time when tech stocks were still very much out of fashion. Since floating at 71p, the shares have more than doubled, ending up 1p at 159.5p yesterday.

Unlike Newport, which never made a commercial product let alone a profit when it came to market, March Networks made a profit of £1.5m in the nine months to the end of January on sales of £13m.

http://www.guardian.co.uk/business/story/0,,1454632,00.html

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