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Could Aggreko be attracting admiring glances?
The temporary power supplier took pole position on the FTSE 100 winners list today after broking heavyweight HSBC started coverage on the group with a buy rating.
But Aggreko's shares were also boosted by a mutter from the gutter that the company may have caught a suitor's eye.
However, traders struggled to come up with the name of a possible predator.
Everyone from Caterpillar to ABB, the Swiss giant which missed out on Chloride, was mooted, although one dealer admitted it was hard to see for whom Aggreko was a good fit.
But another added: “It's a quality company, so I wouldn't be too surprised if someone was taking a look.”
Investors certainly seem impressed: its shares jumped 64p to 1525.8p.
Equities in London extended their rally into a third day after a strong showing from Wall Street last night after asset manager State Street said it would smash profit forecasts and on the back of strong US retail numbers.
The FTSE 100 index advanced 62.38 points to 5077.2, shrugging off the International Monetary Fund's decision to trim growth forecasts for the UK.
Traders said it was another deathly quiet day in the City, however.
“We're so quiet that we're doing nothing,” said one. “People are scared to put pen to paper. You need a crystal ball to know where the markets are going, even just over the course of a day.”
Every rumour of the past 12 months seems to have been trotted out this week, with one dealer cynically suggesting that many might be desperate bids to drum up business.
But something new was being talked about today, that HSBC is mulling a bid for Old Mutual's stake in South Africa's NedBank.
The Canary Wharf bank has reportedly appointed Lazard to advise on a possible deal, although there are said to be no current talks between Old Mut and potential buyers of the 54% holding. Old Mutual added 2.2p to 111½p, while HSBC put on 3p to 617.7p
On the FTSE 250 meanwhile, water and sewerage group Northumbrian Water climbed 3.4p to 321.7p amid bid chatter.
Whispers that it was the Abu Dhabi Investment Authority taking a look, however, were met with some scorn. The speculation instead was of an opportunistic bid, perhaps from a European player planning to expand.
Northumbrian's biggest shareholder, the Ontario Teachers' Pension Fund, is said to be considering selling its 26.8% stake.
Even the old yarn that Mexican billionaire Carlos Slim wanted to buy Fresnillo, described by one trader as “ridiculous” because of the 77% stake held by Alberto Baillères, who says he does not want to sell, was being bandied about again. Fresnillo added 24p to 1056p.
Banks were better amid growing optimism about the stress tests on European lenders. Credit Suisse helped sentiment by upgrading its rating on the sector to benchmark from underweight. The Swiss broker said: “The very fact that a stress test is taking place is positive... We doubt that stress tests would be announced if they were going to disappoint the market.”
Credit Suisse is a fan of Lloyds Banking Group, naming the black horse bank among the stocks to snap up. Lloyds shot up 2p to 60.2p while fellow taxpayer-controlled lender Royal Bank of Scotland put on 1.4p to 44p and Barclays was 6¾p dearer at 298.4p.
Better Capital ticked up 1¼p to 110.7p as the investment vehicle of private-equity maverick Jon Moulton started trading on the main market after promotion from Aim. Better floated last December.
Trader Talk
BlackRock star fund manager Mark Lyttleton, who runs the £2 billion BlackRock UK Absolute Alpha fund, has bought 3.89 million shares in efficient energy specialist Pursuit Dynamics (PDX) which is a 5.5% stake in the company worth about £8.2 million. PDX is focused on providing energy savings to four specialist fields, including fire suppression, decontamination, brewing/food and bio-fuels. Over the past 12 months, the PDX share price has doubled and last week the company announced a formal launch of a range of products for the bio-fuel industry. PDX's new chief executive Roel Pieper, said of the company's two star products: “The PDX Atomiser and Reactor products are genuinely exciting and unique technologies that, when fully commercialised, will drive significant shareholder value.”
Tomorrow's Agenda
Michael Page International, the recruitment giant, will follow rival Robert Walters and post its second-quarter trading update. The group has fared reasonably well during the recession. UBS has upgraded the firm from hold to buy while Numis analysts expect Page to report earning £103 million of net fees during the period.
The market is not likely to be impressed by the trading update from Interserve, the buildings, services and maintenance group, reckons KBC Peel Hunt. It says uncertainty across the sector will hit Interserve in the near term despite its attractive dividend yields of 9.4%.
