MARKET REPORT: CADBURY SOURS ON 'MISSED MERGER' FEAR
Cadbury could miss out in the next round of chocolate-merger activity
By David Shand
SELLERS took a bite out of Cadbury’s shares yesterday amid fears the company could miss out in the next round of chocolate-merger activity.
Cadbury’s shares had hit a sweet spot with investors since the recent demerger of the company’s US soft drinks business as speculation mounted it could be on the receiving end of a bid.
But they retreated 24p to 680dp yesterday on talk that a deal between rivals Hershey and Nestlé could be in the melting pot.
Hershey was also seen as a possible target for food giant Kraft, which has itself been touted as a possible bidder for Cadbury.
Sainsbury’s rebounded from recent weakness, rising 10dp to 352p, as gossips pointed out that its big Qatari investor would soon be free to bid again following last year’s failed takeover.
But investors stubbed out Lambert & Butler cigarette maker Imperial Tobacco, down 38dp to 530p, due to uncertainty over its near-£5billion rights issue.
Fashion retailers Marks & Spencer and Next lost 14fp to 381p and 17p to 1168p respectively as their shares traded ex-dividend but Argos owner Home Retail Group, up 6p to 236p, attracted bargain-hunters as broker Panmure Gordon told clients to buy.
Lloyds TSB fell 8fp into the red at 384fp as Credit Suisse reined back the black horse bank from neutral to underperform.
Aero-engine maker Rolls-Royce climbed 11bp to 411bp as it revealed a joint venture with GKN Aerospace to work on lightweight and low-cost fan blades for aircraft engines.
Admiral, up 35p to 884dp, topped the blue-chip gainers on a good day for heavyweight insurers. RSA Insurance and Prudential advanced 3p to 134fp and 13dp to 657dp, while Aviva added 12dp to 620p.
The FTSE 100 index closed 11.1 points ahead at 6069.6.
Aberdeen Asset Management was 3fp richer at 136p as hedge fund Toscafund increased its stake from just over 16 per cent to 18.2 per cent.
But disappointment at its half-year figures undermined property firm Shaftesbury 21bp to 468fp and further dented confidence across the real estate sector. Helical Bar fell 20dp to 291dp and Grainger was down 20fp to 300p.
Bradford & Bingley was 5p overdrawn at a record low of 97bp amid mounting concerns about the bank’s plans to tap investors for £300million.
Online fashion retailer ASOS was marked up 11dp to 305p as traders suggested the company might be benefiting from rising fuel prices prompting more shoppers to do their buying over the Internet.
Software firm Innovation Group gained fp to 21dp on vague bid talk, while online payment group Neteller was lifted 2fp to 62p on renewed hopes of predatory interest.
Commercial vehicle hire firm Northgate reversed 18dp to 570p as broker Citigroup cut its rating from buy to hold on fears of slowing growth in its UK and Spanish markets.
Oil and gas company Rheochem flowed fp north to 12dp as an independent report confirmed substantially increased oil reserves in a UK North Sea block.
Oil explorer Minmet added 1.13p to 3.63p as dealers said a large seller had been cleared, while Empyrean Energy was boosted 10dp to 66dp following a bullish update from its Sugarloaf gas prospect in Texas.
Emerald Energy dipped 23dp to 335p, despite talk that a positive drilling report from South America was due.
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