MARKET REPORT: Informa up on takeover talk

By GEOFF FOSTER FOR MAILONLINE

Updated: 17:24 EST, 15 August 2012

Trading easier without entitlement to the latest 6p dividend for most of the day, British business media group Informa took a sudden turn for the better before the close.

Shares of the publisher of shipping guide Lloyd’s List, which also organises exhibitions and events, rallied sharply from 386p to close 10.6p higher at 406p as rumours of a £3.6bn or £6-a-share bid approach did the rounds.

Turnover swelled to almost 14m as punters piled in on the back of growing speculation that Informa is being stalked by Germany’s Axel Springer, one of the largest multimedia companies in Europe, and private equity consortium including Apax and Carlyle. Informa is no stranger to takeover talk.

Sporadic bouts of profit-taking and ex-dividend considerations on several constituents dragged the Footsie 31.74 points lower to 5,833.04.

Back in June 2008 after intense media speculation, it revealed merger talks with UBM, 1.5p dearer at 686p.

The idea then was to create a £3bn Footsie business information empire that would bring together the owners of publications including Property Week and Lloyd’s List.

It never materialised as the Informa share price had moved sharply higher ahead of events. Talks were called off.

Should either Axel Springer or private equity giants Apax and Carlyle make a move for Informa, dealers reckon UBM could enter the fray again.

Sporadic bouts of profit-taking and ex-dividend considerations on several constituents dragged the Footsie 31.74 points lower to 5,833.04.

Meanwhile, Wall Street opened a touch higher on hearing that the US housebuilder sentiment index has risen to its highest level in more than five years. Industrial output also climbed 0.6 per cent in July, matching expectations.

Max King, influential strategist at Eden Financial, says that pessimism about the US economy is exaggerated but the increasing perkiness of equity markets indicates a simpler truth – that equity markets want to go up.

One of the oldest common wisdoms on Wall Street is ‘Don’t fight the Fed’.

In other words, buy equities when monetary policy is being eased, sell when it is being tightened.

Speculation is growing that Fed boss Ben Bernanke will announce more quantitative easing in his annual Jackson Hole speech, which takes place at a global central bankers’ conference in the mountain resort, on August 31.

International bank Standard Chartered rallied to 1478p before closing 56.5p higher at 1426.5p after agreeing to pay £216.8m to New York’s banking regulator over transactions linked to Iran.

A mere spit in the ocean for Standard but many City dealers would back comments made yesterday by Simon Denham, boss of Capital Spreads.

He said that Benjamin Lawsky, the New York prosecutor, is probably glowing with his success, but he has just made the US an even less attractive space to do business and has probably hastened the day when dollar clearing is performed outside the US’s jurisdiction.

Kazakh miner Eurasian Natural Resources collapsed 35.1p to 379.6p after slashing its interim dividend by 60 per cent and announcing a 40 per cent decline in profits.

Falling commodity prices and rising costs have impacted both its key divisions, Ferroalloys and Iron Ore.

News that its flagship AHL fund fell by 1.1 per cent over the last week and the fact its shares were trading without entitlement to the latest dividend left hedge fund giant Man Group 6.65p down at 79.4p.

Sellers dragged Imperial Tobacco 44p lower to 2489p and British American Tobacco 65.5p down to 3380p after Australia became the first nation to implement a law requiring all cigarette packets to have plain olive green-coloured packaging.

The ruling, hailed by the medical world as a massive victory for global health, is expected to encourage other governments to enforce plain-packaging laws after Australia rejected challenges by tobacco heavyweights across the world.

The surprise departure of finance director Glen Murray after a relative short term in office to ‘pursue other business opportunities’ left Immunodiagnostic Systems 20.5p lower at 254.5p.

Broker Nomura Code reckons the news is unhelpful to the group particularly given all the recent management changes.

Biotech company Vectura jumped 5.5p to 77.5p after announcing it has received a milestone £1.9m payment relating to continued US development progress on its lead asthma generic programme VR315 or Advair.

Peel Hunt’s target price is 140p. Hydro International, provider of sustainable and innovative water products, rose 4p to 123p after announcing distribution agreements with Ecoline in Russia, and C&V Water in Romania.

It has also signed a €2m contract in Russia for the redevelopment of St Petersburg International Airport.

Buyers chased cancer vaccines developer Scancell up 7.25p, or 40 per cent, to a 52-week peak of 25.38p after it announced a major discovery that could have a profound effect on the way cancer vaccines are developed.

It has filed a patent application for a new platform technology, Moditope, which has produced exceptional results in animal studies. The vaccine has apparently shown strong stimulation of CD4 killer T cells in the immune system and an effect on tumor size.