Market Report: Decision day dawns for bids by CWW's suitors

Today's the day for Cable & Wireless Worldwide (CWW). More than six weeks after Vodafone first revealed it could make an offer for the telecoms group, the mobile phone giant and its rival, Tata Communications, have until 5pm this evening to decide whether to make a bid.

Last night, CWW finished in the red for the fourth-consecutive session, sliding 1p to 34p ahead of the "put up or shut up" deadline. With its share price having risen more than 70 per cent since the takeover battle kicked off, traders said a number of investors were being tempted into profit taking before the saga comes to an end.

Bernstein Research's Robin Bienenstock was rather cautious, reiterating her view that "it is by no means certain, nor necessary" that Vodafone – which crept back 0.35p to 173.7p – will make an offer, although she added that the "financial synergies could be substantial".

She did say, however, that with India's Tata reportedly trying to raise as much as £1.6bn in funding, if "this were the magnitude of offer that [it] is prepared to offer then we think that Vodafone could easily justify a higher bid".

In addition, the analyst argued a deal may "have wider ramifications for the rest of the UK telecom sector", saying that BT (unmoved at 227.6p) "has no doubt benefited from... weak competition" from CWW, which "would undoubtedly pose a bigger threat... in the hands of Vodafone".

Of course, there is always the possibility of the deadline being extended, with recent reports claiming both potential bidders are keen to get more time to decide whether to make a move.

The session did not start well for the FTSE 100 after latest figures showed GDP had fallen faster over the last three months of 2011 than previously thought. However, a late slide following poor durable goods data from the US did the real damage as the blue-chip index finished 60.56 points worse off at 5,808.99.

A number of defensive stocks were in favour, with investors continuing to check into Whitbread. The Premier Inn-owner jumped 39p to 1,849p, meaning that it has now added nearly 12 per cent in a mere three weeks.

Shire was another defensive name in favour as it climbed 17p to 2,140p. The pharmaceuticals group, often the subject of speculation that it could attract a suitor, was supported by reports claiming US drugs group Bristol-Myers Squibb last month had a $3.5bn (£2.2bn) approach rejected for Amylin – which itself has been linked in the past as a possible target for AstraZeneca (down 24.5p to 2,806p).

RSA took the wooden spoon, sliding 8.7p to 107.7p as it traded ex-dividend, with Lloyd's of London's announcement that last year was its worst-ever for catastrophe claims hardly helping the mood around the insurance sector.

Meanwhile, the rest of the loserboard was dominated by commodity stocks amid further fears over demand from China. Miner Vedanta Resources fell 72p to 1,232p while the Roman Abramovich-backed steel maker Evraz was knocked back 21p to 359.8p after announcing a full-year net profit nearly a third lower than what the City was expecting.

Down on the FTSE 250, Centamin slumped 9.26 per cent to 71.05p on its admission that Egypt's financial problems means the gold digger is only currently receiving an industry subsidy on half of its fuel. The group – which was hit by a strike three weeks ago – has now shed close to 30 per cent in less than two months, as dealers warned it was "more negative news that people are eager to jump on the back of".

Ophir Energy continued its fantastic week, pushing up 5.9p to 494p on news it had completed a placing of 30.5 million shares at 495p a pop. The Africa-focused explorer, which unveiled its largest-ever gas discovery on Monday, said it would put the cash towards an expansion of its drilling plans.

Elsewhere, as politicians rushed to show what big fans they were of baked goods amid the furore over the "pasty tax", high street baker Greggs could only edge back 4p to 514p.

Mulberry was strutting its stuff down on AIM, advancing 82p to 1,982p. The luxury-handbag maker was given a "buy" rating by Goldman Sachs analysts who, taking their first look at the firm, claimed it could more than treble in size by 2016.

A warning that its full-year numbers will "substantially" miss market expectations wiped more than a fifth off ATH Resources' share price, with the coal producer – which said the mild winter was partly to blame – dropping 4.88p to 16.5p.

Among the small-cap stocks, Chime ticked up 6.75p to 218.5p on the announcement that Sir Martin Sorrell's media empire WPP (which was 5p weaker at 862.5p on the Footsie) has raised its stake in the public relations group to 19.14 per cent.

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

The 50 Best beachwear

The 50 Best beachwear

The hottest summer gear for men and women
Still standing: George Galloway reveals why his staunchly Leftist outlook is still invariably right

Still standing: George Galloway

Written off, ridiculed, wrongly accused of taking bribes the honourable member for Bradford West, has never bowed to the critics.
How will Daniel Radcliffe's fans react to his latest turn - as a damaged, drug-taking Beatnik poet?

Daniel Radcliffe as drug-taking Beatnik poet

His decade as the boy wizard may be over, but that hasn't hexed Daniel Radcliffe's enchanted life.
For whom the bell tolls: £20m 'Memo' project takes shape on Dorset's Jurassic coast

'Memo' project takes shape on Dorset coast

It started as a stonemason's visionary idea – to commemorate all the species that have ever existed and are now extinct.
Just add sunshine: Bill Granger's Turkish delights

Just add sunshine: Bill Granger's Turkish delights

Turkish cuisine is perfect for those long, sociable weekend meals with friends. It's just a shame that money can't buy the key ingredient.
Objets czar: David Usborne’s collection of myriad objects is quite the mystery

Objets czar: David Usborne’s collection of myriad objects

To others, they're junk. To David Usborne, they are his life: useful gizmos, mysterious thingamajigs and anonymous articles that dominate his home.
The iron ore lady: Why the world's richest woman is mired in controversy

World's richest woman: Gina Rinehart

Family feuds, attempts to control the Australian media and bitter public disputes are keeping the mining magnate in the headlines.
We just click: How Lego keeps building on its success

How Lego keeps building on its success

This year, Lego announced record profits. Gerard Gilbert visits its Denmark HQ.
The other bits: Mark Hix creates delicious and economical meals with cheaper cuts of meat

Mark Hix cooks with cheaper cuts of meat

Our chef creates delicious and economical meals on a budget
Strokes of genius: How to create summer's bold make-up look

Strokes of genius: Summer's bold make-up

From coral lips to fly-away fringes, make-up artist Kim Brown and hair stylist Richard Scorer reveal how to create the look
Marking his territory: Kilian Hennessy creates fragrances designed to provoke the senses

Marking his territory: Kilian Hennessy

The perfumer creates fragrances designed to provoke the senses
Photo essay: Britain's 1948 Olympians today

Britain's 1948 Olympians today

Photo essay
The top five E3 2012 triumphs: From Ubisoft's suite of titles to Dishonored and The Last of Us

The top five E3 2012 triumphs

The games and moments that left us grinning like the Cheshire Cat
The green movement at 50: Can the world be saved?

Can the world be saved?

Population growth and climate change are the big problems facing the earth in the next 50 years. But are there any solutions?
France: Will xenophobia go mainstream?

France: Will xenophobia go mainstream?

In the beautiful Rhone delta, John Lichfield visits a village where a dangerous new political landscape is taking shape