THE RUSSIANS are coming. On Tuesday, City dealing rooms were awash with talk that Russian businessman Alisher Usmanov was looking to put together a bid for steel maker Corus, where he is already thesecond biggest shareholder. Yesterday, Sportingbet was in demand amid rumours of stake building in the group by a consortium of Russian investors.
Why a consortium of Russian investors might specifically be interested in the online betting group was unclear, but it certainly got the company’s shares moving. They ended the day 7.5p higher at 80p.
Things are without doubt looking up for Sportingbet. The group’s shares have soared from their April 2003 low of 18p and now stand at their highest level since mid-2002.
Last month, the world’s largest online betting company boasted of a 61 per cent leap in third-quarter profits thanks to a 20 per cent rise in sales. It also talked of strong trading during the first four weeks of its final quarter.
Along with the improving financials, there seems to be growing confidence among directors in Sportingbet’s future, as they have piled into the shares. Most recently, Sean O’Connor, a non- executive, picked up 41,000 shares at 71p. This comes on top of buying from Nigel Payne, the chief executive, and Peter Dicks, the chairman.
Elsewhere, Arla Foods soared 6.25p to 58.5p as Express Milk Partnership was heard to be busy building a strategic stake in the diary group. The partnership of dairy farmers sells milk to Arla which then sells it on to consumers via supermarkets and its own distribution network. The farmers are believed to have decided on the move early this week. Arla, which counts Cravendale milk and Anchor butter among its brands, is the product of the merger of Denmark’s Arla Foods and Express Dairies of the UK.
In the pharmaceutical sector, GlaxoSmithKline dropped 19p to 1,173p as dealers reported heavy shorting of the stock by hedge funds ahead of full-year figures from the drugs giant. As it stands the market is expecting an 8 per cent rise in pre-tax profits and details from management on a string of upcoming new drugs. AstraZeneca lost 60p to 2,594p after Investor AB, the holding company of Sweden’s Wallenberg family, sold down its holding to 3.75 per cent from 5 per cent. UBS placed the stock with institutional investors in Stockholm and London.
There was some nervousness ahead of BT Group’s third quarter figures tomorrow. Recent speculation has suggested that the telecom carrier’s sales figures could well disappoint. BT ticked 0.5p lower to 176.5p.
BAE Systems jumped 4.5p to 166p after Merrill Lynch upgraded the defence giant to “buy” from “hold” and set a 226p price target. The broker believes that all the possible bad news at BAE is now out and assured investors that the Ministry of Defence’s soon to be announced Short Term Equipment Procurement Plan would be benign for the group.
Marconi was in demand thanks to some rather upbeat comments from Lehman Brothers. Initiating coverage with an “overweight” recommendation, Lehman described the telecom equipment group as an attractive long-term investment. It noted that Marconi now had a healthy balance sheet, with net cash of more than pounds 100m, and that it was very well placed to benefit from any upturn in the telecom industry.
Cambridge Antibody Technology was not so lucky. Closing unchanged at 465p, its shares were held back by a “sell” note from the new broker on the block, Code Securities. Code criticised the licensing agreements CAT has signed for its Humira arthritis treatment and warned that the company might have to raise new capital if it continued to eat into its cash pile at the current rate. “With a lack of substantial news flow before the end of the year, we feel there is little reason to hold the stock at current levels,” the broker said.
Quantica, the recruitment sector minnow, was steady at 57.5p despite the sale of 1 million shares at 57.5p by Leslie Lawson, the group’s chief executive. Mr Lawson retains a 5 per cent stake, or 2 million shares, in Quantica. Flomerics put on 5p to 107p, with the improving economy said to be benefiting the group greatly. Talk of strong trading at RPC helped its shares rise 4.5p to 182p. Word has it the group is enjoying solid demand for its products in Europe.
Peter Gyllenhammar, the Swedish value investor, got Lonrho Africa’s stock moving. Shares in the conglomerate rose 1.5p to 12p after Mr Gyllenhammar disclosed the purchase of 500,000 shares via his Silverslaggan AB investment vehicle, leaving him with a total holding of 1.8 million or 1.2 per cent. The Swedish investor also has an interest in the Union Discount Co, which has a 8 per cent holding in Lonrho.
Lonrho Africa, which was spun out of the late Tiny Rowland’s Lonrho empire, has been selling down its various assets over the past two years. These have included businesses in Africa ranging from luxury hotels to pig farms and motor dealerships. The company hopes to re-invest its capital in the UK once this process is complete and is believed to be actively seeking opportunities at present. One of the group’s biggest assets is said to be its large pension fund surplus.
