Finance

MARKET REPORT: British Gas owner Centrica sees shares soar 2.9% as foreign takeover rumours swirl

The rocket boosters were put on shares in British Gas owner Centrica yesterday amid rumours of a foreign takeover bid.

The energy firm saw £324.2million added to its value after website Wall Street Wire said it had attracted the interest of infrastructure investors from Kuwait, Singapore and Canada and a strategic buyer.

Centrica’s shares rose by more than 4 per cent in early trading before finishing ahead by 2.9 per cent, or 5.8p, at 207.7p, despite analysts doubting the credibility of the rumours.

Barclays said a takeover of Centrica would be risky at the moment because of its weak earnings and profits, as well as the high chance of an energy price cap in the UK.

British Gas owner Centrica saw £324.2m added to its value after Wall Street Wire said it had attracted the interest of investors from Kuwait, Singapore and Canada and a strategic buyer

Likewise, broker Lazarus said it is unlikely Centrica would attract the interest of infrastructure investors because it has very little infrastructure across its mostly customer-facing business.

‘We think it highly unlikely that an infrastructure fund would go near it, especially given the publicity it would attract at a time when the sector is under the political microscope,’ said Lazarus.

But the firm was beaten to the top of the index by budget airline EasyJet, which took flight after being upgraded to ‘outperform’ from ‘neutral’ by analysts at Credit Suisse. Shares rose 5.4 per cent, or 72p, to 1419p.

Overall, the FTSE 100 rose 0.2 per cent, or 13.64 points, to 7350.92.

Martin Sorrell’s advertising giant WPP was one of the index’s biggest fallers after a downgrade from long-term fan Exane BNP Paribas.

The broker rated WPP as ‘underperform’, claiming it needs to evolve much faster than thought to keep up with ‘nimbler brands’. Shares fell 2.6 per cent, or 41p, to 1569p.

Tech firm LightwaveRF jumped 6 per cent after announcing a tie-up with tech giant Apple and its remote-control technology HomeKit.

An upgrade from Barclays sent computer services group Computacenter to a 17-year high and the top of the FTSE 250.

Barclays gave the firm an ‘overweight’ rating from ‘equal weight’ claiming strong demand from Germany will make up for a stagnating UK market over the next three years. Shares rose 5 per cent, or 41.5p, to 879.5p.

Meanwhile, Nostrum Oil & Gas fell to the bottom of the mid-cap index after the price of the black stuff fell by more than 3.5 per cent.

Shares were down 3.8 per cent, or 18p, to 460p.

Oil and gas firm Highlands Natural Resources fell to its lowest value in more than a year after raising £2million by putting around 16.6million shares on the market at 12p each.

The money will be used to drill a well at the company’s East Denver oil and gas project in Colorado.

Rather unusually, the placing was carried out via a service called Primary Bid, which allows investors to take part in private placings by AIM-listed companies usually reserved for institutional investors.

Highlands Natural Resources fell 15.7 per cent, or 2.38p, to 12.75p.

Shares in home emergency cover group Homeserve were off slightly after the boss of its Spanish arm cashed in on its strong performance of late.

Stephen Philips made £131,000 by selling 18,000 shares in Homeserve at 727.5p each, bringing his stake in the firm down to 0.03 per cent.

The company has been on the rise since early April, when it said full-year results were expected to be ahead of expectations as customers purchase more comprehensive cover.

Shares fell 0.7 per cent, or 5p, to 717p yesterday, but remain up 15.2 per cent for the year.

Troubled picture book publisher Quarto Group fell 2.6 per cent, or 4.5p, to 168p after the firm sold Books & Gifts Direct – its sales business in New Zealand – to retail group Etailer for £466,000.

The firm has struggled against a weak trading climate this year.

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