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Shares of Sibir Energy remained suspended at 176¾p, where they have been since February.
Meanwhile, a battle for control of the company between two Russian blue-chip companies and our own BP carried on behind the scenes.
The world's biggest natural gas supplier Gazprom Neft is looking to build up a sizable stake in Sibir by offering 500p a share. Its offer tops a previous bid of 430p a share made by TNK-BP, a joint venture company, part of a bookbuilding exercise which valued Sibir at $2.4 billion (£1.65 billion).
This afternoon TNK-BP's financial adviser Credit Suisse announced that the Anglo-Russian company had cancelled its bookbuilding exercise, leaving the way clear for Gazprom Neft, a company which in the past has been tipped to bid for the British Gas distributor Centrica.
Sibir continues to pursue its biggest shareholder, co-founder Shalva Chigirinsky, for debts totalling $325 million, which is why its shares were suspended in the first place. Sibir bought property assets from Chigirinsky to help him avoid margin calls on debts and now wants the money.
Shares of Intertek Group surged back above the 1000p level for the first time in nine months on talk of a bid. The business support group, which provides quality and safety solutions, led blue-chips higher with a jump of 79p to 1005p, where it is capitalised at £1.7 billion. Word is rival Geneva-based SGS is poised to make an offer, which could signal further consolidation within the industry.
In the past, Intertek has been linked with Antwerp-based Bureau Veritas. But stockbroker Noble is surprised by the move and suggests mergers between blue-chip companies would have emerged later in the day. It reckons there are a number of mid-caps in the sector which would have made better bid targets, offering lower capital risk.
Meanwhile, further examination of the small print of Chancellor Alistair Darling's extraordinary Budget failed to provide City investors with any fresh impetus.
Instead they turned their attention to New York, where the futures market was indicating a positive start to trading this afternoon. As a result, leading shares in London moved to consolidate their position above the 4000 support level. The FTSE 100 index sported a rise of 41.85 at 4072.51.
But it was a different story in the gilt market where longer-dated issues, such as Treasury 4% 2016, lost a further £¾. The Government shocked the market yesterday by saying it will need to raise an eye-watering £220 billion in the gilt market this year. But dealers say it could prove to be expensive for the Treasury, which will probably have to offer returns in excess of 5%.
Elsewhere, the focus of attention switched to the retailers where brokers, such as Citigroup, are talking about a re-rating of the sector. It is one of a number of brokers who feel the sector has been oversold after showing signs of turning the corner. Unfortunately, stock shortages are tending to exaggerate price movements.
Debenhams stood out with a rise of 13¾p, or almost 22%, to 77¼p after weighing in with half-year pre-tax profits 10% higher at £104 million, way above City expectations. Shares in the department store operator have now almost trebled since the start of the year. Other retailers moving better on the back of Debenhams and broker's bullish comments included Kesa Electricals, up 7½p at 130p, Next, 94p at 1529p, and Marks & Spencer 16½p at 345¾p. WH Smith also rose 2¾p to 412¾p after hiking the dividend 17%.
Royal Bank of Scotland has raised its rating on BP, up 12½p at 463½p, from hold to buy, making it the third broker to claim this week that the shares are looking cheap. It has also raised its target from 550p to 565p and says the maintained quarterly dividend is solidly underpinned, suggesting 2009 is attractive at 8.7%. Other attractions of the oil giant include the prospect of modest growth in production this year.
