Forth Portswas the standout feature in a flat London market.
Shares in the port operator gained 5.4 per cent to a record high of £20.15 amid talk an infrastructure fund and property financier were plotting a £23-a-share bid.
Forth runs six commercial ports in the UK, including Tilbury, the closest dock to the planned Olympic village in East London. But its chief attraction is a property portfolio in Edinburgh’s waterside Leith area.
Arbuthnot Securities used the bid speculation as the cue to increase its target price on Forth from £20.98 to £26.44. Analyst Alastair Gunn said the upgrade reflected the “seeming inevitability that the last remaining ports infrastructure play will be swallowed up in due course.”
Even if a predator does not emerge, Mr Gunn is confident investors would make money as Forth demerges its property and port interests and returns a cash to shareholders.
In the wider market, leading shares faded after a bright start as investors refused to chase the market in advance of tomorrow’s public holiday in the US.
The FTSE 100 fell 1.9 points, or 0.03 per cent, to 6,202.6, while the FTSE 250 added 26.3 points, or 0.2 per cent, to 10,752.2.
Scottish & Southern Energy was among the top FTSE 100 performers. Its shares gained 3.7 per cent to a record high point of £15 on the view that if Scottish Power, up 0.7 per cent to 760p, falls to Spain’s Iberdrola, SSE would be the next utility to be snapped up by an overseas buyer.
As for Scottish Power, reports in the Spanish press claimed Iberdrola was poised to make a 800p-a-share cash and stock offer. But the offer’s scrip component could be as high as 40 or 50 per cent, traders said.
In the same sector, Kelda, parent company of Yorkshire Water, firmed 0.7 per cent to 944½p after Merrill Lynch said it was a likely leveraged buyout candidate.
BT Groupimproved 1.2 per cent to 283½p after Citigroup set a 315p-a-share target price, citing the potential for BT to load its Openreach division with debt and return proceeds to shareholders.
Corus Anglo-Dutch steelmaker, was another talking point. Its shares firmed 0.7 per cent to 505¾p on rumours Tata Steel would come back with an offer that knocks CSN’s indicative 475p-a-share bid out of the water. In a research note published last week, investment bank UBS said Tata could afford to pay 525p a share for Corus before destroying value.
In the mining sector, Lonmin jumped 3.6 per cent to £30.80 as the price of platinum touched a record high of $1,395 an ounce.
The rise was triggered by rumours a leading bank was working to form a new exchange traded fund (ETF) in the metal.
Analysts said a platinum ETF would make it easier for investors to get exposure to the metal. It would also increase demand as the ETF would need to acquire the underlying metal.
Aviva was marked 0.8 per cent higher at 808p after making progress on plans to return surplus assets to policyholders and shareholders. A successful distribution could add about 25-50p to the Aviva share price, analysts said. Prudential, the other life assurer that might be able to dispose of its orphan assets, was lifted by the news, up 1.2 per cent to 683½p.
Aviva and Prudential were also supported by rumours of a bid deal in the insurance sector.
Prudential’s UK life business is rumoured to be a merger target for Resolution, off 0.4 per cent to 657p. As for Aviva, traders reckon it could be a takeover target for Generali.Italian investors were said to be buying long-dated, out-of-the-money Aviva call options.
On the downside, broadcaster ITV fell 2.2 per cent to 112p after revealing it had rejected a 122p-a-share cash and stock offer from cable company NTL.
In the FTSE 250, JJB Sports climbed 3.3 per cent to 226½p, extending its gains since the start of September to 28 per cent. According to traders, the company has been on the road telling investors the business has turned the corner and rival discount retailers are finding it difficult to get hold of product from the big sportswear companies.
There was also talk a private equity group had approached majority shareholder David Whelan with a deal to take JJB private.
Whitbread gained 3.3 per cent to £15.43 as rumours of a £17.50-a-share bid from Starwood Capital refused to die down.