On a weak day for the markets, AIM-listed Xchanging (LON:XCH) caught the eye again as a fourth suitor tried its luck with the much fancied outsourcer.
This latest approach, from US-based Computer Sciences Corporation (CSC), is sufficiently serious for Xchanging to switch its affections away from former FTSE100 stalwart Capita (LON:CPI).
CSC is offering 190p per share, valuing the company at £480mln, and has secured the backing from around 47% of Xchanging’s shareholders.
But that may still not be the end of chase according to the share price, which soared to 194p or above the new offer.
Fellow American software house Ebix is also rumoured to be lining up a bid, though the fourth suitor, private equity firm Apollo, ruled itself out of the running last month.
And there is Capita, which gained support from around 24% of the firm’s shareholders and a recommendation from the Xchanging board for its 160p per share offer.
With more potential offers for the firm, which has been subject to speculation since disappointing interim profits and revenues wiped around 20% off its share price, this story looks likely to run for a little while longer.
The FTSE100 was lower by lunch, as Capita lost around 1.6% or 19p to 1,195p.
The miners turned back into the red during the morning session sending the index 9 points lower to 6,126.
Alastair McCaig, at IG, said: “Worries that Anglo American’s (LON:AAL) actions yesterday might become the template for others in that sector have seen investors running for the exits.”
Anglo was the biggest loser on the index again on Wednesday, dropping 7.8% to 298p as broker Deutsche Bank said its plan was underwhelming.
“The dividend was cut (expected), capex was reduced (but only in line with consensus) and the divestment plan expanded (limited new details),” the broker said.
The broker was busy today, also downgrading former FT owner Pearson (LON:PSON), which was around 2% lower to749p.
The broker cuts its target price by 19% to 770p saying: “With risk of further weak trading in college, low adoption year in school books and the possibility of a significant round of restructuring in 2016, Pearson’s problems are structural, with cyclical pressures exacerbating them.”
On a more positive note, the broker edged up its price target for Rio Tinto (LON:RIO) to 3,544p due to the potential of its aluminium division, for which there was a market day yesterday.
“Their aluminium business is the best in class in our view, by far,” the broker said, sending shares 52p higher to 1,945p.
In the small cap space, specialist holiday group On the Beach (LON:OTB) said trading had been unaffected by the terrorist attacks in Tunisia, Egypt and Paris as it posted strong annual earnings. Shares rose 13% to 190p.
Elsewhere, Motive Television (LON:MTV) is teaming up with ABT Africa to provide broadband to children in South Africa.The deal is potentially worth more than US$2.5mln, and shares, which have been on the slide recently, jumped 8% to 0.019p.
Also higher was Solgold (LON:SOLG), which uncovered on-surface copper and gold mineralisation at its Trivino target on the Cascabel Project in Norther Ecuador. Shares nudged almost 4% higher to around 1.37p.
LONDON OPEN
London’s blue-chip stocks recovered some of yesterday’s losses, with the miners back on the risers list.
A better than anticipated Chinese inflation figure, at 1.5% against the 1.4% forecast, did the trick after disappointing import and export data from the country earlier this week.
Connor Campbell, at spread-betting firm Spreadex, said: “[The data] appears to have helped matters this morning following Tuesday’s unexpectedly weak trade data; at the very least, the slight improvement didn’t make things any worse.”
Tuesday’s heaviest fallers were among the top risers this morning, with BHP Billiton (LON:BLT) up 3.3% or 24p to 747p, Rio Tinto (LON:RIO) climbing 3% or 57p to 1,950p and Anglo American (LON:AAL) around 1.5% higher to 328p.
Copper was the main driver behind the share price movements, Spreadex’s Campbell said, as the metal rose more than 1%, leading the miners to “some kind of (relatively insufficient) recovery.”
The miners helped boost the FTSE100, which was around 25 points to the good at 6,159.
Ashtead (LON:AHT) was the big gainer on the index, however, as the equipment hire group reported a 25% leap in second quarter pre-tax profit to £176.5mln from £141.7mln.
Rental revenue for the quarter rose to £589mln from £477mln. Shares rocketed around 9%, or 94p, to 1,125p.
Away from the index, Entertainment One’s (LON:ETO) shares rebounded after plummeting on Tuesday.
The firm has changed its debt facility, and Peel Hunt downgraded its forecasts for the year.
But the company reminded investors that it is in line with expectations for the year, sending shares 8.4% higher to 152p.
Also higher in the mid-cap space was construction group Carillion (LON:CLLN), which unveiled new business worth about £1bn and said it was seeing signs of improvement in its markets. Shares gained 5.5%, or 16p, to 318p.
In the small cap arena, Motive Television (LON:MTV) is teaming up with ABT Africa to provide broadband to children in South Africa.
The deal is potentially worth more than US$2.5mln, and shares, which have been on the slide recently, jumped 28% to 0.02p.
Also higher was Westminster Group (LON:WSG), which won another airport security deal.
The group announced a memorandum of understanding for a new long term contract with what it describes as “a significant international airport”. Shares climbed 5% to 21p.
Conversely, Rose Petroleum (LON:ROSE) has scaled back its exploration efforts as it said drilling a single self-funded well in the current oil price environment is “ill advised”. Shares slipped around 18% to 0.09p.