The bid speculation surrounding British Energy is hotting up. The nuclear firm has seen its shares jump 37p to 738.5p on talk that it has received a couple of offers.
Germany's RWE is said to have made an indicative cash offer worth 700p a share, while Britain's Centrica has reportedly pitched an all-share bid at a similar level. France's EDF is another group said to be interested.
British Energy is the biggest riser in the FTSE 100, helping to offset a weak performance from the miners. BHP Billiton, Vedanta Resources and Rio Tinto are all down around 3% or so. The moves follow a fourth quarter production report from Vedanta. This showed both aluminium and iron ore production reached record levels, although Zambian copper production fell due to a January 2007 power grid failure.
Ahead of the key interest rate decision at midday, the leading index is 40.9 points lower at 5943.0.
Retailers have been hit by another profit warning from DSG International - the former Dixons. DSG is down 5.5p at 59.5p, rival Kesa is 5.75p lower at 202p while B&Q owner Kingfisher has lost 3.7p to 126.8p after downbeat comments from chief executive Ian Cheshire at a retail conference in Barcelona.
On DSG, Landsbanki analyst Paul Deacon said: "The dividend is almost certain to be cut. We retain our reduce rating on the shares and expect more bad news ahead. The company faces significant challenges on several fronts; a) the web is drawing in new competition while the rapid shift to this channel will continue to pressure gross margins, b) the Computing market seems to be in a phase of serious dislocation and the PC World/City format is looking vulnerable, c) the pan-European footprint contains serious organisational complexity without much obvious payback, d) the OFT is likely to re-address a perceived monopoly in service contracts, hence this significant profits stream is under threat."
Panmure Gordon was no more positive. "While [DSG's share price] is around a 20% discount to the sector on calendarised 2008 estimates and is undervalued, with perhaps some speculative upside from a potential acquisition, we see the stock as "dead money" at best over the medium term."
Finally, analysts at Daniel Stewart famously said business airline Silverjet was worth nothing. Someone disagrees, since the company has just said it is in takeover talks and its shares have climbed 5.5p to 20.75p.
Today Daniel Stewart, commenting on the bid news, said: "We would use this as an opportunity to sell. The high degree of interest in the company from private investors may lead to a big spike in the price today - some are already trying to talk it up to 50-75p.
"If any prospective bidder does proper due diligence on Silverjet we see a strong probability that they will decide not to bid."
