Newspaper article The Evening Standard (London, England)

Footsie's Power Play in Wake of BOC Bid

Newspaper article The Evening Standard (London, England)

Footsie's Power Play in Wake of BOC Bid

Article excerpt

Byline: MICKEY CLARK

MERGERS and acquisitions were back on the agenda today as shares bounced from several days of weakness.

News yesterday that industrial gases supplier BOC had rebuffed a cash offer of [pounds sterling]7.6 billion, or 1500p a share, from smaller German rival Linde has been greeted enthusiastically by speculators.

They were chasing BOC sharply higher again today, despite the Germans ruling out a hostile offer. The shares climbed 71p to a record 1465p, which compares with the 1207p they started at yesterday.

Speculators argue that Linde may be tempted to make a higher offer. If so, that could trigger similar approaches from the likes of France's Air Liquide.

Broker Credit Suisse tips Air Products and Praxair in the US as possible bidders.

US securities house Goldman Sachs said: "There is a possibility that Linde may increase its offer to around 1600p a share."

Another broker, UBS, has increased its target price for BOC to 1486p, but says a bidding war could drive up the price to almost 2000p.

Another company trading at a record high on hopes a bidder will soon show its hand was BG, up 20p at 642p.

Dealers say Russian oil exploration rival Lukoil may want to bid. There was even talk that cash-rich Lukoil would make an announcement around midmorning, but the deadline came and went without any word and some brokers remain sceptical.

Tony Alves at broker Peel Hunt wonders why the Russians would make such a move. "It makes little industrial sense and would be difficult to justify to shareholders," he said.

Lukoil has plenty of domestic opportunities to exploit, and a move into the liquid natural gas market must be some way down the line. The Russian group is on record as saying it would like to make acquisitions in Europe.

Share prices generally made headway, with the FTSE 100 index rising 37.9 to 5671.7.

Vodafone rallied 2p to 1193/4p in the wake of yesterday's trading update. It has been the subject of increasing criticism over its performance from institutional shareholders, who want the group to become more focused after experiencing a slowdown and contraction of margins. …

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