The Times: Experian lifted by takeover of US marketing data rival: Shell / BP mega merger?

EXTRACT: Shell, up 66p at £18.59, was also the subject of renewed speculation about a mega-merger. BP, up 13½p, was the candidate most often mentioned by traders, although the names of Gazprom and Total also came up regularly. Such theories last appeared in February, when BP shares hit a two-year low and investors started looking at radical solutions. But with Tony Hayward taking over as BP’s chief executive only this month, any major strategy decisions appeared unlikely.

THE ARTICLE

May 18, 2007
Large caps
Bryce Elder

Experian led blue-chip shares higher in reaction to the third private equity deal in its field in just over a month.

Acxiom, an American rival in the marketing data industry, accepted a $3 billion (£1.5 billion) takeover bid from Valueact Capital, a hedge fund, and Silver Lake, a buyout group. The move came after private equity deals last month for Veda Advantage, Australia’s leading credit checking agency, and First Data Corporation, a credit card transaction processor,

The Acxiom deal added to speculation that buyout funds may revisit their interest in Experian, having been spurned last year before the agency’s demerger from GUS. Experian shares closed up 22½p ahead of its full-year results on Wednesday.

Oil producers bolstered the wider market, leading the FTSE 100 index to close ahead 19.8 at 6,579.3. Refinery stoppages in the US squeezed Brent crude prices to the best levels of the year.

Shell, up 66p at £18.59, was also the subject of renewed speculation about a mega- merger. BP, up 13½p, was the candidate most often mentioned by traders, although the names of Gazprom and Total also came up regularly.

Such theories last appeared in February, when BP shares hit a two-year low and investors started looking at radical solutions. But with Tony Hayward taking over as BP’s chief executive only this month, any major strategy decisions appeared unlikely.

Meanwhile, Cairn climbed 62p at £17.35 as a theory went round its AGM about interest from Petronas, the Malaysian state oil company that owns 10 per cent of its Indian arm. After the close of trade, Citigroup upgraded Cairn to its “buy” list, saying the shares were offering “a free option” on a bid.

Next bounced back 8p to £22.55 following a disappointing trading statement the previous day as dealers noted that the retailer had started buying back its own shares for the first time in nearly a year.

The collapse of a private equity bid for Qantas helped to lift British Airways by 11½p. Bullish comment from Goldman Sachs also helped with the Wall Street broker repeating “buy” advice ahead of BA’s year-end results due today. It told clients that fears over the transatlantic “open skies” agreement were misplaced and that the airline would be “the jewel in the crown” for buyout funds.

Mining stocks provided the day’s main drag as worries about Chinese demand caused the London Metal Exchange copper price to drop to a six-week low. Xstrata was off 70p at £26.75, BHP Billiton fell 27p to £11.80 and Anglo American was down 56p at £28.15.

Rio Tinto, the sector’s top performer this month on takeover theories, eased 70p at £35. But Citigroup — whose note linking Rio to BHP earlier this month marked the start of the bid speculation — stayed positive on hopes of buybacks, acquisitions or disposals. “We believe that Rio Tinto’s management are under increasing pressure to rectify their underperformance,” it argued.

Renewed takeover talk led Friends Provident to inch up ½at205p, with Standard Life reported to be talking to the private equity fund JC Flowers about a joint approach. Friends shares surged last week on gossip about interest from Flowers and AXA, the French insurer.

InterContinental Hotels, which was pushed to a record high by bid talk on Wednesday, fell back by 32p at £13.40. “We don’t believe a takeover is imminent,” JPMorgan’s team said.

Whitbread faded by 11p to £18.97, ignoring “buy” advice from ABN Amro. The leisure group was understood to be still in the five-bidder auction for Ireland’s Jury’s Inn hotel chain.

Findel led the mid-cap risers, up 87½p after accompanying its year-end earnings with a promise to deliver a strategic review by the end of the summer. The news boosted hopes that it would split its school supplies business from its home shopping operations.

— New York: Benchmarks were barely changed in reaction to mixed economic data and surging oil prices. The Dow Jones industrial average closed down 10.80 points at 13,476.70.

http://business.timesonline.co.uk/tol/business/markets/article1805835.ece

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