Investors snap up AMEC amid gossip of takeover
HOT gossip that hedge fund manager Martin Hughes’ Toscafund investment vehicle has been approached by Acciona for its 8.6pc stake in AMEC sparked heavy buying of the engineering services group.
It touched 3671⁄ before closing 161⁄ higher at 3581⁄ amid growing speculation that the Spanish construction giant – worth around £4bn – will soon launch a £1.5bn or 440p per share cash offer.
Acciona said in August that it was still on the lookout for a foreign acquisition in the energy field after failing in a bid for Pacific Hydro, the Australian group. AMEC would fit the bill perfectly. It wants to build a world- class nuclear business in Britain, and earlier this year purchased the Nuclear Services Consultancy. It is expected to bid for British Nuclear Group’s £ 2bn a year contracts to run the UK’s nuclear site until at least 2008.
The Spanish are on a corporate roll. Group Santander swallowed Abbey National for £ 8.5bn, while Ferrovial, which operates toll roads in Europe and the US, acquired ailing facilities management company Amey for a song. But topping the lot is Telefonica’s recent spectacular £18bn cash offer for mobile phone group O2, dearer at 1963⁄
Lloyds TSB, strongly rumoured to be on Spanish bank BBVA’s shopping list, gained 21⁄ more to 471p.
The Footsie only just kept its head above water, closing 0.1 points higher at 5460.9. It lost an initial 20.9- point gain after Wall Street opened 61 down. A profits warning from luxury housebuilder Toll Bros prompted fears that consumer appetite for quality homes may wane because of rising US interest rates.
Whitbread lost
91⁄ to 9361⁄ but there were a few nosy buyers willing to flex their muscles and back an industry hunch that a major disposal is on the menu. Despite constant denials from the leisure giant that it is up for grabs, sources suggest its David Lloyd Leisure chain of fitness clubs will soon be sold for around £600m.
Two buyers are believed to be in the frame. Virgin Active, the health club chain which Sir Richard Branson bought back from private equity group Bridgepoint for £134.5m, and Next Generation, a leading fitness clubs group which includes Scottish & Newcastle and multi- millionaire racehorse owners JP McManus and John Magnier as its backers. Hedge fund Man Group jumped 37p to 1616p after Dresdner Kleinwort Wasserstein lifted its target price to 1890p from 1750p ahead of the interim figures on November 17th.
News of the purchase by Batiss Investments of a further 300,000 shares at 1287.9p to take its shareholding to 4.6pc lifted miner Xstrata 30p to 1325p. Up 42p initially following an upbeat analysts’ presentation overnight in Sydney, Australia, Rio Tinto succumbed to late profit-taking and closed only 5p dearer at 2259p.
Concern that it will get involved in an expensive corporate deal with ScottishPower, Scottish and Southern Energy blew a fuse at 971p, down 30p. Dana Petroleum gushed 27p to 899p after expanding its international business via a transaction with Gaz de France. It has also increased its North Sea Gas production and secured free carry in Mauritania.
Stockbroking firms are obviously enjoying the market’s resurgence as shown by sparkling half-year figures from Charles Stanley, 7p better at 292p. The private client broker’s interim profits jumped 32pc to £5.4m, and funds under management rose 13pc to £8.7bn. Chairman Sir David Howard is cautiously optimistic about the second-half.
Social housing group Connaught firmed 71⁄ to 8121⁄ on slightly betterthanexpected annual results. Broker Investec says the rating already reflects the profits improvement and advises clients to sell. It prefers rival Mears at 277p.