Croda fizzes after Solvay deal

CRODA International was in focus yesterday after Belgian group Solvay’s £3billion acquisition of France’s Rhodia fuelled hopes of more mergers in the chemicals sector.

Homebase operator Home Retail Group was marked up 9 p to 204 p on brisk trading Homebase operator Home Retail Group was marked up 9¼p to 204½p on brisk trading

Shares in the £2.3billion company – seen as a potential target for US giant Dow Chemical or Germany’s BASF – hit a 1718p high, up 24p on brisk trading, while another mooted takeover target, high tech plastics group Victrex, advanced 15p to 1410p. Elementis was up 6p to 156p.

Broker Brewin Dolphin said: “Victrex and Croda both remain potentially attractive takeover candidates, but one potential buyer appears now to have gone away.”

Tesco accelerated 4¾p to 393¾p after launching a used car website. The venture also gave a ½p boost to 16¾p for The Innovation Group, which has been chosen to provide maintenance, repair and servicing for customers of Tesco Cars.

Credit Suisse also talked up Tesco’s prospects, as Sir Terry Leahy’s successor Philip Clarke prepares to oversee his first set of annual results as the retailer’s chief executive later this month.

The broker added: “We expect his debut to provide a fresh perspective on Tesco’s growth and expect him to take an open, consistent and thorough approach to financial communication, which should be well received by investors.”

DIY provided a bright spot for share shoppers amid continuing concerns over consumer spending. Bid favourite and Homebase operator Home Retail Group was marked up 9¼p to 204½p on brisk trading, while B&Q owner Kingfisher rose 4¾p to 258½p.

Blue chip engineers provided sector support as GKN and Weir Group firmed 4½p to 209p and 32p to 1808p, while IMI added 15p to 1059p.

Heavyweight miners such as Xstrata and Rio Tinto, up 24p to 1511p and 59p to 4478p, kept the market in positive territory following big gains for equities on Friday, which helped fund manager Schroders to add 23p to 1797p.

But the FTSE 100’s progress was restricted to 7.06 points to 6016.98 as state-backed lenders Lloyds Banking Group and Royal Bank of Scotland lost ¾p to 60¼p and ½p to 41¾p, while HSBC was also overdrawn by 7½p to 647½p.

Associated British Foods was another top flight casualty, down 9p to 994p, as broker UBS cut its profit forecasts for the group’s discount fashion chain Primark.

Software giant Autonomy retreated 26p to 1577p as dealers cited bearish comments from Peel Hunt, but mid-cap technology groups Computacenter and Micro Focus International rose 22p to 460p and 11p to 329p.

Document capture software company Kofax eased 13½p to 521½p as dealers noted “minor disappointment” over a two-month delay to the sale of its hardware business.

A push from broker Morgan Stanley drew the attention of buyers to recruitment company Michael Page International, up 15p to 548½p, while investors lost their appetite for sausage skin maker Devro, 6p leaner at 280p after a cautious trading outlook from pork specialist Cranswick, down 41p to 790p.

On Wall Street, the Dow Jones industrial average was 5.53 points higher at 12,382.25 by close.

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