Market report: Thursday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

SHARES in London Stock Exchange extended this week's strong run with a rise of 12p to 405p, taking the gain during the past two days to 20¼p.

Whispers in the Square Mile say chief executive Clara Furse is back in talks with rival Deutsche Bourse, which may offer up to 450p a share. The two sides held merger talks a few years back but failed to agree who would be in the driving seat. 'Customers' of LSE say a deal is long overdue.

Share prices generally ticked up in thin trading with the FTSE 100 index rising 34 points to 4753.4. Wall Street was closed for Thanksgiving Day.

Tesco led the top 100 higher with a rise of 10¾p to a record 308¾p after an impressive third-quarter trading update.

The biggest faller was Barclays, down 15½p at 545p, depressed by a trading update that highlighted a poor performance from its retail banking and mortgage arms.

Shareholders in TBI, the operator of Luton, Cardiff and Belfast International airports, should take the money and run.

That is the advice from broker Credit Suisse First Boston, which reckons Spanish group Abertis Infraestructuras is paying top dollar. Abertis yesterday launched a bid worth 92½p a share, valuing TBI at £551m, excluding £200m debt. The offer was immediately accepted by shareholders accounting for 40% of the company. But today CSFB downgraded it from neutral to underperform with fair value of just 80p a share.

It says the terms put TBI, unchanged at 91¼p, on a PE of almost 15 times likely 2005 earnings, against 10 for its bigger rival BAA, 1½p better at 586p.

'A 40% takeover premium would put BAA on a multiple of 14, making a quality company seem comparatively cheap compared with the offer for TBI,' says CSFB. It describes the offer as a 'knockout' price and does not see another bidder stepping forward.

Ceres Power scored a useful premium in first-time dealings on Aim following a placing of 13.3m new shares by Numis Securities at 120p. A further 4.6m shares were placed by existing shareholders. The £16m raised will go towards funding the development and marketing of its fuel cell technology and products. The shares touched 137p before settling at 132p.

It was also the first day of dealings on Aim for residential property mezzanine financier Creon following a placing at 50p. It touched 60p before settling at 55½p.

Speciality chemicals and precious metals group Johnson Matthey jumped 21p to 1032½p following a rise in first-half pretax profits before exceptional items from £97.5m to £103.3m.

It also plans a share buyback. But broker Teather & Greenwood has cut its recommendation from buy to hold, worried by a 'weakening' in some of its markets and pressure from the ailing dollar. Fair value is pitched at 1000p.

Miners received a boost from US broker Morgan Stanley, which has repeated its overweight rating on BHP Billiton, up 13p at 620p, and Rio Tinto, 5p better at 1542p. The broker has raised its target on the former from 610p to 650p and on Rio from 1550p to 1600p.

Anglo American, 21p dearer at 1278p, is rated underweight but the target has been raised by MS from 1250p to 1300p, while Xstrata, 16p higher at 924p, is kept at equal weight with the target up from 900p to 1000p.

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