Daily Mail, London, market report column [Daily Mail, London]
(Daily Mail (London, England) Via Acquire Media NewsEdge) April 13--You should never look a gift horse in the mouth. Shareholders of oil and gas minnow Wessex Exploration, including founder Frederick Dekker, Standard Life, CQS Asset Management and broker Killik, could rue the day they rejected a pounds sterling 75m or 10p a share cash bid from Total, saying it undervalued the company.
They obviously believed the French oil giant would return with a higher offer, but they were left high and dry when Total said it is no longer contemplating a bid.
Wessex shares, which had never traded higher than 10p since the company floated on AIM at the end of March 2011, touched a peak of 10.5p following Total's surprise approach. But they were on a slippery slope yesterday after Total said au revoir and fell 1.25p, or 14pc, to 7.75p. It could now be some time before they are changing hands at 10p again..
Wessex said bravely it welcomed Total's withdrawal of interest and noted that, having raised pounds sterling 12m of additional funding in November, is fully funded for all current exploration requirements.
Its key asset is its 1.25pc stake in the Zaedyus prospect offshore French Guiana. Total has a 25pc interest in the prospect, where drilling last year revealed more than a billion barrels of oil.
Shareholders of aerospace and defence group Umeco, on the other hand, were on cloud nine after the shares rocketed 183.5p, or 49pc, to 559.5p on news of an agreed pounds sterling 274m or 550p a share cash offer from Cytec Industries. Cytec has already received irrevocable acceptances from Umeco's management, Blackrock, Hermes and Aberforth totalling 30.2pc of the equity.
The trend among the big boys was thankfully to higher levels amid growing speculation that today's first-quarter Chinese gross domestic product growth figure could come in at 9pc, higher than consensus forecasts of around 8.3pc. If true, it would calm fears of a sharp slowdown in global growth.
The Footsie advanced 75.72 points more to 5,710.46p, while the FTSE 250 leapt a further 180.5 points to 11,414.53.
An early 80 point gain on Wall Street also helped London's cause. The Street of Dreams was encouraged by the Fed's 'Beige Book', which provided dealers in New York with a reassuring assessment of the US economy. Meanwhile, eagerly awaited first-quarter figures today from JP Morgan and Wells Fargo will give the market an insight into the current health and growth of the US banking sector.
Car components group GKN found itself in pole position in the Footsie, accelerating 11.8p to 203.3p on a Credit Suisse upgrade to outperform from neutral. The broker says the stock has reversed 11pc over the past month but has failed to take into account the group's reported move to acquire Volvo Aero Engines.
Ignoring the continuing furore over boss Bob Diamond's pay and tax affairs, Barclays jumped 11.35p to 223.45p. Lloyds Banking Group, 41pc owned by the UK taxpayer, jumped 1.33p to 31.92p on hearing that new banking venture NBNK has tabled a fresh bid for 632 Lloyds Bank branches, locking horns with shops-to-banking group The Co-Op.
Still reflecting a JP Morgan Cazenove target price upgrade to 2750p from 2200p, chemicals and precious metals group Johnson Matthey climbed 91p to 2359p. Dealers also reckon the market has yet to fully recognise JM's technology that ensures a long and healthy post-harvest life for fresh produce.
It has been working on a product called the e+ Ethylene Remover, which it has been developing with Anglo Platinum to help keep fruit and veg in tip-top condition from harvesting right through the journey to our homes. A revival of bid speculation and hopes that the Queen's Diamond Jubilee, Euro 2012 and London Olympics will give a huge boost to advertising revenues over the second and third quarter helped broadcaster ITV feature a gain of 3p at 86.1p.
Cable & Wireless Worldwide buzzed 2.57p higher to 35.46p on talk that Vodafone (0.2p dearer at 169.9p) will table a 45p a share cash offer before next Thursday's 'put up or shut up' deadline. India's Tata lurks in the background.
A bullish trading update lifted Immunodiagnostic Sytems 39.25p to 349.25p. Broker FinnCap says concerns over competition in its markets has been overdone and the shares have been oversold.
Scapa, the global manufacturer of bonding materials and solutions for the industrial, healthcare and electronics markets, gained 4.5p to a five year high of 68.5p following a positive trading update. Pre-tax profits will be significantly ahead of last year and ahead of market consensus expectations.
RIALTO Energy, the latest newcomer to the junior AIM market, made a steady debut. It closed unchanged at 27p, valuing the company at pounds sterling 175m. It is focused on the exploration, appraisal and development of oil and gas interests in Cote d'Ivoire, Australia and Ghana. Analysts say it offers investors a low cost entry into what is a undoubtedly a highly prospective West Africa oil and gas region.
(c)2012 the Daily Mail (London, )
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