Tullow Oil was in focus yesterday after the FTSE 100 energy group made a $1.5 billion (£920 million) counter-bid for Heritage Oil’s exploration fields in Uganda.
Heritage, up 38p at 552p, had agreed to sell the fields to Eni, the Italian state oil company, but Tullow, which already owns a half-share in the Uganda project, had the right to pre-empt any sale of Heritage’s half as long as it matched the rival bidder’s price. Eni, or another suitor, could still put in a higher offer and the final deal will have to be approved by the Ugandan Government.
The move comes as Tullow seeks a buyer for up to half of its own interests in the project — which it said had attracted significant interest from leading national and global oil companies — to help with finance and development. Royal Bank of Scotland (RBS) said that if Tullow owned the project outright. it could be a more attractive package to a buyer than the complex ownership structure that would prevail under a deal with another bidder. Tullow rose 30p to £13.69.
The FTSE 100 rose 39.02 points to 5,494.39 on a fairly subdued day of trading, with markets in the United States closed. International Power was arguably the biggest talking point, with the utilities group topping the leaderboard for most of the day amid speculation that it could be bought by GDF Suez, its French peer — until it said that talks had ended in mid-afternoon, sending the shares into a nosedive. It closed the day’s biggest faller, down 11p at 311p.
Eurasian Natural Resources (ENR) was the big blue-chip riser, climbing 38½p to £10.30 amid higher metal prices and comments from Kazakhmys, the miner that owns a 26 per cent stake in ENR, had no plans to sell its holding. Kazakhmys closed up 35p at £14.45. Anglo American put on 86½p to close at £28.09, Xstrata rose 28p to £12.16½ and BHP Billiton was up 30p at £20.74½.
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Retailers regained some of the ground lost last week, with Marks & Spencer rising 11p to 360½p, Home Retail Group climbing 6¾p to 267¾p and Kesa Electricals 3¾p up at 146p.
Banks were also among the top performers, with Lloyds Banking Group rising 1.8p to 58.58p and Royal Bank of Scotland ½p up at 37.24p.
BSkyB was a heavy faller, ending the day 6½p down at 567p after BT, up 2p at 147p, said that it planned to undercut the pay-TV broadcaster on the price of Sky Sports channels if a regulatory inquiry forced Sky to drop its wholesale charges.
BAE Systems fell 3¼p to 364¾p and Cobham slid 1¼p to 237¾p after Bank of America Merrill Lynch took a more cautious view on the aerospace sector, citing concerns about cancellations and postponements of defence programme, particularly in the UK.
Inmarsat was down 2p to 680p after Goldman Sachs cut its rating on the satellite group to “neutral” in a sector review.
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Cadbury rose 14p to 807½p amid hopes for a higher bid from Kraft, the American food group.
Interserve rose 1p to 220p after the support services group disclosed that Sageview Capital, an American investment group, had raised its stake to more than 6 per cent.
? New York: Stock exchanges in the United States were closed for Martin Luther King Day.