What an afternoon this is turning into. Brazilian steelmaker CSN has just said it made a proposal to Corus, just as it seemed Tata Steel of India had it in the bag. CSN has even managed to pick up about 4 per cent of Corus stock in the market. CSN is offering 475p a share, beating Tata’s 455p. Few people think it will stop here, though. Corus shares have leaped to 496¾p. Having got a first take up on the website, we are now tearing up page plans as I write to clear space for this.
Much smaller – but great fun in its own way – is a second attempt by Aga to bid for Enodis. He’s double checking the maths but Neil Hume on our markets desk reckons that, because the proposal is in paper and Aga shares fell after it was announced, that the offer would be worth less than where Enodis was worth earlier in the day. Aga’s first attempt at buying Enodis wasn’t very convincing and nor, by the looks of it, is its second.
And, as if to confirm that Friday is the new Monday where takeovers are concerned, Blackwell Publishing is being sold to John Wiley & Sons, the US publisher, for £572m. Previous attempts to sell the business have failed because of feuding among members of the Blackwell family which owns it. To be clear, though: this bit of the family business does not include the Blackwell’s bookshop chain.
Earlier, Homestyle Group, which owns Harveys, confirmed it had received a takeover approach and, having initially not said where it came from, changed its mind. It said the approach came, as our sources had been telling us, from Steinhoff, the South African furniture group which already owns 61 per cent of Homestyle. It also said Steinhoff is offering 100p a share in cash with a share alternative.
BlueBay priced its initial public offering at the top of the price range, valuing the London-based alternative asset manager at some £571m ($1.1bn). The 300p a share issue price values BlueBay at 26 times earnings in the 12 months to June 30 this year. This looks very steep: Man Group, the world’s largest listed hedge fund manager, trades on 15 times earnings in the 12 months to March 30. BlueBay’s forecasts for funds under management are “extremely challenging” writes Saurabh Mukherjea, an analyst at Clear Capital, who also says the firm has “inferior operating margins relative to peers and greater dependence on performance fees”.
British Energy’s chief nuclear officer, Roy Anderson, is leaving after problems at six of its seven ageing advanced gas-cooled reactors (AGRs) in recent months. These issues have hit the share price hard and delayed government plans to sell of part of its remaining 65 per cent stake in the company. I tried this morning to find Anderson on the company website but he’d already been erased from the executive team. British Energy also says it plans to pay a dividend next year, the first one since it was restructured, and it is talking about a special distribution as well. It aims to return four of its damaged reactors to service by the end of January at reduced loads.
The total size of outstanding contracts in the global derivatives market jumped in the first half of this year, new data from the Bank for International Settlements show. At the end of June 2006, the total notional value of all outstanding derivatives contracts in the over-the-counter market was about $370,000bn. If that number means something to you, then good luck. All I know is that it is 24 cent more than in the previous six months. The pace and scale of innovation in this market is breathtaking, as we’ll explain tomorrow.
Rumour of the Day: Cadbury Schweppes is the subject of rumours in the equity and credit default swaps markets again. Talk is of a private equity break-up bid, with the under-sized soft drinks business being sold off to finance the bid. Join the discussion on FT Alphaville., where you can also read about a very entertaining piece of research by Andrew Wood at Bernstein, who really lays into Cadbury’s management.