Newspaper article The Evening Standard (London, England)

Abbot Buoyed by Rumours of US Approach; MARKETROUND-UP

Newspaper article The Evening Standard (London, England)

Abbot Buoyed by Rumours of US Approach; MARKETROUND-UP

Article excerpt

MERGER and acquisition rumours continued to fuel interest in the oil sector today, with the hot money focusing on oil and gas services group Abbot.

Word on the ground is that huge US rigs operator Nabors is eyeing the UK-based outfit. Abbot was 81/ 2p higher at 2881/ 2p, a rise of over 3%.

With a market cap of [pounds sterling]650 million, it sounds like just the kind of sizeable morsel with decent rigs and new geographic markets that Nabors has said it is seeking. Keith Morris at Evo Securities reckons Abbot fits this bill very well.

He points out it has an excellent asset base and an international footprint offering little overlap with Nabors. He also likes Abbots underlying growth story.

Takeover talk peppered the City today although more sobering news from Marks & Spencer and the enduring negative reaction to GlaxoSmithKlines Avandia announcement set the predominantly downbeat tone for the FTSE 100. The index was off 7.2 points at 6629.6 with Marks & Spencer the biggest faller. Fears of slowing sales growth sliced more than 4% off the share price, down 291/ 2p at 709p. But dealers said that at this level they were seeing more buyers coming in.

Standard Chartered soared 83p to 1685p as old merger rumours were given a public airing

but share volumes of about eight million suggested there was nothing concrete going down. Alliance & Leicester, up 57p at 1204p, have been started by UBS as a buy. After some hard work with a calculator, UBS comes up with a target price of 1440p

reached by applying a 50% chance of a bid happening at a takeout price of [pounds sterling]17.

With a strong brand, extensive branch network and 3.55% market share, UBS reckons A&L is a strategically attractive asset.

EMI added a further 23/ 4p to 2733/ 4p as investors waited to see if a higher offer would knock Guy Hands [pounds sterling]2.4 billion bid off the table. Although the struggling music group last night agreed to a takeover at 265p from Hands private-equity outfit Terra Firma, many were still hoping that Warner Music, or another venture capitalist, would trump that offer. …

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