Rumours point to Timpson-Johnson tie-up
Could shoe repair and key cutting-specialist Timpsons be readying a move for Johnson Service Group? Blog rumours to that effect suggested privately-owned Timpson might be interested in a tie-up, citing city rumours that the two are working more and more closely together, and suggested a price as high as 60p-70p-a-share. That would be a hefty premium to yesterday's closing price of 34p.
Traders and brokers didn't rule out the suggestion on Thursday. On the one hand it could be structured to give Timpsons a public listing, they suggested, and likewise there seemed an intrinsic rationale to tieing up two companies who specialise in "grudge purchases". Johnson Service Group is best known for its dry cleaning, and with outlets in similar places, there might also be property synergies between the two, market sources said. Johnson rose 0.5p yesterday, up by 1.5%.
Car dealership Lookers was on the rise too after Wednesday's post-close announcement of an 80p-a-share bid from a consortium led by Jack Petchey. The market appeared wary of the bid, perhaps suspecting that the board might not accept 80p, and that the deal might collapse one way or another. The Lookers board is allowing the consortium access to the books but has stopped short of a recommendation. The shares rose 3.6%, or by 2.5p, to finish at 72.5p, some way short of the bid offer.
There was plenty of activity, as ever, among the smaller mining and resources stocks. Bowleven was a star performer, rising 11.5% to reach 325p after saying that one of its wells, off the coast of Cameroon, was flowing oil at rates that would indicate it could be exploited commercially.
Desire Petroleum was a big loser, though there didn't appear to be a strong reason for the drop. The Falklands explorer has already burnt a few fingers, and is not for the faint-hearted. The stock climbed by a third on Tuesday, only to come back down to earth on Thursday, falling 26% to finish at 17.5p.
The market in general found some forward momentum yesterday, with the FTSE 100 finishing 47 points up at 5,856. All week it has either been falling or gaining ground at a snail's pace. The impetus seemed to come from a narrowing US trade deficit, which saw the Dow rise by almost three figures by the time the London market closed.
TUI Travel was the biggest faller among the FTSE 100 ahead of its relegation from the blue-chip index. The shares fell 2%, or by 4.5p, to 218p.
Lloyds Banking Group was not far behind, with traders suggesting that downbeat comments from chief executive Antonio Horta-Osorio at the Treasury Select Committee on Wednesday were behind the falls. IT and operations director Mark Fisher was one of those selling, offloading £260,000 worth of shares, the bank announced on Thursday. The bank's shares fell 0.9p, or by 1.8%, to 47.8p.
Imperial Tobacco lost ground after news of fresh price cuts to Spanish cigarettes came through. Philip Morris is discounting its Marlboro, Chesterfield and L&M brands, and a note from analysts at UBS suggested Imperial might have to follow suit. A ten cent drop in the prices of its packs of 20 would knock earnings by £35m-£40m, the broker said. The shares fell 1.4%, or by 29p, to £21.10.
Home shopping, education and healthcare business Findel Group was soaring ahead after chief executive Roger Siddle bought £50,000 of shares. The shares have halved in value over the last year, and Siddle clearly felt this was a buying opportunity. The shares rose 28% yesterday, up 1.75p to close at 8.05p.
Traders meanwhile were watching Molins, the maker of quality control instruments for the tobacco industry. A 12.3% rise in the group's shares, to finish at 116p, appeared to have little behind it.
Hire group Ashtead gained ground ahead of its results next Thursday. The suggestion is that the company's remediation and restoration service in the US might have done well given the bad hurricane season across the Atlantic. The shares rose 2.8%, or by 5p, to reach 180p.