Takeover buzz lights up the LSE
sHARes of the London Stock Exchange were suddenly all the rage just before the close as rumours of a bid from the Far east swept dealing rooms.
punters chased them up to 1028p before they closed 21p higher at 1023p amid speculation that the singapore exchange (sGX) could be lining up a cash offer of £3.7bn or 1350p a share.
the jackanory comes after the Lse recently agreed a tie-up with sGX to allow cross trading of its largest securities. Under terms of the agreement, members of the sGX will be able to buy and sell Footsie shares. in return, Lse members will be able to trade 36 singapore securities.
More than 35pc of the Lse’s equity is owned by Arab investors who obviously will have a big say in the exchange’s future. Borse Dubai, which owns 20.6pc, and Qatari investment Authority, 15.1pc, have in the past said they would block any potential takeover bids. But word is they have become increasingly concerned about strategy at the Lse and its performance and would now be prepared to agree to a cash offer tabled at a significant premium to the current price.
the Lse this week hit analysts’ quarterly revenue growth forecasts largely due to the performance of its most recent acquisition, Ftse international.
seemingly against all the odds, the resilient Footsie closed 28.42 points higher at 5,714.19, while the FTSE 250 jumped 156.8 points to 11,242.5. Buyers at home have been buoyed by the better-than-expected quarterly earnings season in the Us which continued late on Wednesday with iBM raising its earnings forecast for the current year. Wall Street closed 34.66 higher at 12,943.36.
Royal Bank of Scotland, more than 80pc owned by the UK taxpayer, rose 8p to 212.3p on reports of a pending upbeat circular. Lloyds Banking Group, which finally tied up the sale of over 600 of its branches to the Coop, improved 0.46p to 30.24p.
Afren gushed 9.1p to 128p after announcing that the simrit-2 exploration well in the Kurdistan region of iraq has found more oil after further drilling. punters also believe it is a possible target for Royal Dutch Shell ‘A’, 3p easier at 2213p, which this week walked away from Cove energy.
tony O’Reilly Jr’s Providence Resources jumped 32.5p to a record 652.5p as punters piled in ahead of drilling update on its Barryroe well in ireland which is due before the end of the month. Dealers also heard yesterday that management have been banging the drum during a series of City presentations. in a recent note, broker Liberum Capital estimated that Barryroe could contain 1bn barrels of oil-in-place and more than 160m barrel of recoverable oil, treble current market expectations. its 1245p share price target assumes Barryroe contains only 100m barrels of recoverable oil. the broker says there could be very significant increases in City expectations following the update at the end of July.
Gulf Keystone Petroleum gushed 8.75p to 221p after the AGM reported another substantial upgrade of its gross oil-in-place volumes for the shaikan field in Kurdistan. it has increased its estimate to 12.4bn barrels from 8bn barrels previously.
Tethys Petroleum rose 4p to 45p after the oil explorer reported that an updated independent resource report for its tajikistan assets has led to an upgrade in the estimated recoverable resources to 27.5bn barrels of oil.
technology company Sepura eased 0.5p to 70.5p after four major shareholders sold a total of 10.8m shares to enhance liquidity in the stock. John Drinkwater, Jonathan Green, sion Kearsey and Michael sherwood all retain a total of 57.1m shares, or 41.76pc, of the equity after selling shares to a range of institutions including Cazenove. Buyers filled their boots with struggling media group Mecom, 10p better at 63p, on the perception that it could now be one of the best recovery plays in the market now that chief executive tom toumazis is on his bike. He will not be replaced and chairman steven Davidson will be taking over executive responsibilities.
Xcap’s guru tim Freeborn has a 12 month target price of 110p and says that Mecom’s future lies in persuading regulators to let it merge with, for instance telegraaf Media, so it can share overheads.
Fancy wallpaper group Walker Greenbank firmed a penny to 71p after announcing a major order from a hotel in texas for sanderson fabric. the firm also said that its manufacturing operations were performing strongly.
Mobile gambling specialist Probability closed flat at 75p despite its acquisition of playyoo, a private company based in Lugano, switzerland. playyoo develops and operates a business-to-business mobile gambling and sports betting technology for the recent regulated italian market. ÷ SPORTS animation company Sports Stars Media closed flat at 1.18p ahead of today’s maiden interims. The first Portuguese firm to list on AIM in February has exclusive rights to the image of Jose Mourinho, manager of Real Madrid. Dealers will be hoping to hear what plans management have to exploit the ‘special one’s’ image via interactive social media. The global market for entertainment and character merchandising is said to be worth about €20bn.