Premier Foods - the Hovis and Branston Pickle group - has had a rocky time with its share price recently. Last month it fell sharply on concerns about its debt, before reassuring investors it expected to meet its banking covenants.
Today the shares have jumped 44% to 41p, on reasonable volumes of 6m shares traded so far. Part of this appeared to be short-sellers covering their positions, but analysts also suggested there was a read across from results announcements today from Marks & Spencer and Associated British Foods.
M&S - although food sales fell 5.3% on a like-for-like basis - said it saw opportunities to grow market share over the long term. Around 10% of Premier's business is supplying own label products to M&S.
And ABF's grocery division - a similar operation to Premier - produced annual profits of £9m, ahead of expectations according to Investec's Martin Deboo.
Overall, with US futures seemingly showing the Obama effect and indicating a 267-point opening on Wall Street, the FTSE 100 is near its best level of the day, up 117.05 points at 4560.33.
News that Reed Elsevier, up 15.5p at 564.5p, has appointed Ian Smith, formerly of Taylor Wimpey, as its new chief executive has prompted renewed speculation the publisher might bid for European rival Wolters Kluwer.
Gareth Thomas at Collins Stewart said: "Smith was chief executive of housebuilder Taylor Woodrow for seven months last year, arranged the merger with George Wimpey, then left just before the credit crunch (excellent timing). Given his actions at Taylor Woodrow, and his lack of publishing background, his appointment might fuel the ever-present, Reed Elsevier bid rumours."
