Fevered hopes that there are more takeovers in the pipeline pushed the FTSE 100 to a seven-year high.
Back in 2000, dot.com mania triggered the dizzy rise of media and technology stocks. Yesterday it was the more prosaic but more cash-generative financial and property sectors that fired the FTSE up to 6,754.1 before a close of 6,716.7, up 19.0.
The Dutch Supreme Court boosted Barclays’s chances of success in its €64 billion (£43.4 billion) bid to buy ABN Amro after ruling yesterday that a controversial side sale of the Dutch bank’s coveted American arm, LaSalle, can go ahead without a shareholder vote.
Barclays rose 5¾p to 724½p. HSBC raised its rating on Britain’s third-bigget bank to “neutral” from “underweight” and kept a 700p target.
The ruling means that a rival consortium led by Royal Bank of Scotland, down 5½p to 640p, is widely expected to revise the terms of its offer.
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Bid speculation continues to swirl around Standard Chartered, the biggest riser in the FTSE 100, up 48p to £16.90. Temasek Holdings, Singapore’s state-owned investment vehicle, is thought to be on the prowl – with Lloyds TSB, up 6½p to 566½p, also on its menu.
Man Group, the UK’s largest hedge fund manager, rose 17p to 633½p, building on gains from Thursday’s trading update.
Marylebone Warwick Balfourconfirmed talks to sell its entire hotel business, as revealed in The Times, sending its shares up 15p to 278p.
Quintain Estates & Development, the property developer with rights to build more than 16,000 London homes, has been put into play after HBOS struck a deal to buy an 11.9 per cent holding. Investors who wonder whether HBOS will stop at this level of ownership should note that the bank’s stake is held via Uberior Investments, the bank’s property buying vehicle, which usually brings in rich entrepreneurs as joint-venture partners to launch takeover bids.
HBOS remained tight-lipped about its plans for Uberior’s stake in Quintain, which surged 40½p to 895½p giving it a market value of £1.16 billion.
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HBOS, up 2p to £10.05, earlier this year bought for £715 million Crest Nicholson, the housebuilder. The FTSE 100 bank used its Uberior vehicle to club up with West Coast Capital, the private equity group owned and funded by Sir Tom Hunter, the Scottish billionaire, and the corporate advisers Jim McMahon and Paul Davidson.
Last year HBOS, again using Uberior, paid £1.1 billion for McCarthy & Stone, the builder of retirement housing. HBOS clubbed together with Sir Tom’s West Coast fund and David and Simon Reuben, the billionaire property investor brothers.
The seller of the Quintain stake is Rock Investments, the property investment vehicle run by Paul Kemsley, the Tottenham Hotspur club director. Property sources have not ruled out Mr Kemsley reemerging as a joint-venture partner with HBOS to make a bid for Quintain. In 2005 Mr Kemsley fought the bank – and was ultimately defeated – in the bid battle to buy Countryside Properties.
Almost two thirds of property professionals believe that a further quarter-point rise in interest rates will lead to a general decline in the number of commercial property transactions taking place over the following 12 months, according to research conducted by Investec Private Bank’s structured property finance division. Derwent London will be slapping itself on the back, then, for selling three London properties for £175 million, more than twice the value it had thought they were worth at the start of the year. Derwent rose 28p to £17.92.
–– New York: Wall Street ended a record-setting week by surging higher again. The Dow Jones industrial average passed 13,900 for the first time, closing 45.60 up at 13,907.30. The S&P 500 index rose 4.80 to 1,552.50, also a record.