Market report: Friday close

By JIM ARMITAGE
Updated:

 

POOR old Arun Sarin. The lightning-rod Vodafone chief executive raises €2bn (£1.4bn) selling a stake in a little-known Belgian mobiles firm, and still the share price barely budges.

Deutsche Bank and Goldman Sachs analysts gave the thumbs-up to the deal to sell Vodafone's quarter share of Proximus to Belgacom but the rest of the market gave a Gallic - or should that be Walloon? - shrug. The shares edged up just 1½p to 112¼p.

Sarin's troubles just seem to get worse. Earlier this month, Citigroup became the latest broker to downgrade it amid concerns about its European growth potential, T-Mobile is about to start a price war and, to cap it all, China Mobile overtook it as the world's biggest mobile company.

Sarin will be using the Proximus proceeds to pay down debt rather than make a return to shareholders. The deal is part of his plan to sell off assets around the world that were built up by his predecessor, deal-addicted Sir Chris Gent. Watch this space for a sale of Voda's quarterstake in Swisscom.

The market was spending a pre-bank holiday day on the drift, the Footsie 100 index was ahead 9.5 points firmer at 5878.6.

Steelmaker Corus tried to drag the index upward with a 6¼p gain to 403½p. Dealers cited renewed bid speculation coming from Russia.

Moscow gossip has it that Severstal is to carry out a rights issue to fund a Corus takeover. Whether or not the group would have the appetite for a high-cost, western Europe-heavy investment remains to be seen.

Chip Goodyear, chief executive of miner BHP Billiton, needs to spin harder. Investors were buying stock heavily again today after this week's plan to add a further $3bn (£1.6bn) to its previous $2bn share buyback.

Goodyear wants to dampen expectations of yet more cash returns, and today stressed that his strategy was to prioritise spending his spare cash on investing in the business rather than returning it to shareholders. But his comments today were little heeded.

BHP jumped 11p to 1000p amid hopes of more cash handouts to come.

Asset manager Henderson went the other way with its share buybacks policy. Confirming the return of £200m today, it also pledged to hand back another chunky sum next year. Investors were delighted and chased the shares up 9¼p to 91¾p.

Boss Roger Yates was canny enough not to be tempted to overpay for Gartmore earlier this year, dropping out of the auction, but the lack of decent-sized merger deal leaves it looking somewhat vulnerable.

Yates does not seem that bothered, remaining defiantly sceptical of investment bankers' overtures. Well may he: in the first half of the year, Henderson sucked £400m of new money into its hedge fund investments. UBS upped full-year profit forecasts by 10%.

The Icelandic bid last night for House of Fraser confirmed what we all knew weeks ago. The Vikings are offering 148p a share and the deal is fully financed by a range of Icelandic and UK investors. But after four months of talks, the fact that the deal was now being confirmed brought some relief. The shares gained 2½p to 146¼p.

Fibernet shares jumped 4¾p to 75¾p after a subsidiary of Global Crossing pitched up a bid for £50.6m, or 78p a share.

The telecoms group's shareholders have accepted the offer and, given that they own nearly 10% of the stock, it looks like a done deal. Broker Bridgwell Securities tells punters to accept the offer and sees merit in combining the two operations.

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