Mike Ashley's Sports Direct International was in demand yesterday.
It jumped 15.5p to 156.5p with nearly 30m shares traded. Speculation that Icelandic group Baugur - which recently amassed a 1% stake in the retailer - was buying more shares proved wide of the mark. Instead, it turned out that Sports Direct was stepping up its own share buyback programme, purchasing another 10.4m for cancellation to add to the 16.5m already bought. The company received permission at its annual meeting to buy a total of 72m.
The move, by default, increases Ashley's own stake, prompting many analysts to suggest he plans to take the company private again at some point. Sports Direct has had an eventful time since it floated at 300p at the end of February, including a boardroom upheaval, a spending spree on acquisitions and on buying stakes in other businesses, and poor trading figures.
Still with retail, childrenswear specialist Mothercare added 11.75p to 409.75p as investors bet today's trading statement would not disappoint.
Elsewhere Barclays edged up 4.5p to 619.5p despite suggestions that the bank had been cautious on its outlook at a lunchtime meeting at brokers Cazenove. "The talk is things were not quite as rosy as Bob Diamond [the bank's president] has been saying in recent statements," said one trader. "They were not negative, but they were far more guarded."
The other main talking point was Scottish & Newcastle
After months of speculation, Danish brewer Carlsberg and Dutch rival Heineken announced a possible cash offer for S&N with a view to splitting the company up between them. "Vague initial whispers are of an 800p per share cash offer, which would value the company at around £7.5bn," said Martin Slaney of GFT Global Markets.
Various Carlsberg executives had given mixed signals recently over whether it was interested in S&N or not, but yesterday's announcement settled that once and for all. Before the news S&N shares were about 5% higher on rumours of a bid. On the confirmation they soared 119.5p to 756p, a 19% increase. Dealers said other players such as SABMiller could enter the fray, especially since S&N was not exactly welcoming in its response to the offer.
Overall, bid speculation seems to be back with a vengeance after a period of calm during the credit crunch.
But the supposed takeover targets from earlier this week slipped back on profit taking. Specialist chemicals group Johnson Matthey edged down 1p to £17.52 after Monday's excitement when it was rumoured to be in the sights of US group Praxair. BG, the gas and oil group, slipped 3p to 911p following Tuesday's talk of a £12 a share bid, as Dresdner Kleinwort downgraded BG from buy to hold. The company was also hit by volatility in the oil price. BP was 7.5p lower at 619.5p and Royal Dutch Shell down 2p at £20.84.
Miners had a mixed day, falling initially after disappointing third quarter figures from Rio Tinto, but mostly recovering lost ground during the day. All except for Rio, that is, which closed down 65p to £43.54.
Among the risers ICAP, the world's biggest interbroker dealer, added 29p to 548p on talk that it was benefiting from an increase in derivatives trading by the banks.
Housebuilder Barratt Developments - savaged by analysts at Dresdner Kleinwort last week as the "worst in class" - rose 18p to 694p. Three directors, including chief executive Mark Clare and finance director Mark Pain, have between them spent more than £400,000 on buying shares.
Insurance group Aviva gave a strategy presentation saying it planned an extra £350m of annual cost savings, and said it wanted to boost its Asian presence. But the market was unimpressed and its shares lost 16.5p to 719.5p.
On the economic front, Bank of England minutes from its interest rate setting meeting this month showed one of the nine members voting for a cut, though the rest wanted rates kept at 5.75%.
Overall, the positives outweighed the negatives and the FTSE 100 closed 63.4 points higher at 6677.7. It was helped by an opening rise on Wall Street despite a drop in new US housing starts.
Packaging group DS Smith climbed 15.75p to 216.p after it said first half profits would rise from £29m to more than £50m, while telecoms testing group Spirent Communications recovered 2.5p to 63.75p after yesterday's falls in the wake of poor figures from Ericsson.
Support services group VT climbed 35p to 616p as the EU approved the merger of its shipbuilding operations with those of BAE Systems. There was also vague bid chat surrounding VT.
Technology group Qonnectis jumped 0.7p to 1.725p after it won an order from Thames Water. But voice over internet group Citel slumped 23.5p to 14.5p after it warned its full-year profits would not meet market expectations, and it was in the middle of a cost-cutting programme. Panmure Gordon cut its price target from 56p to 40p.
A little sweeter
Struggling sugar group Tate & Lyle regained some ground yesterday. It was 32.25p better at 455p as Panmure Gordon issued an update on the company, which last month made its third profit warning in less than a year. Panmure said Tate should benefit if, as has been reported, the EU approves the import of four genetically modified crops at a meeting on 24 October. "One reason for Tate's more cautionary outlook was weak corn gluten feed prices in the US which we believe was a direct consequence of the European import ban," said Panmure. "While this is a potential positive for Tate, the company still needs to better explain itself, and senior management positions remain in question." With these caveats in mind, the broker maintained its hold recommendation.
