Eurasian Natural Resources heads Footsie on Glencore bid speculation

FTSE: 5,773.46 (+7.66) Mid-250: 11,779.46 (–6.56) Small Cap: 3,271.07 (–2.06)

UK STOCKS gained yesterday, rebounding from a 2½-month low, as Eurasian Natural Resources was boosted by a report that Glencore may bid for the mining company.

The benchmark FTSE 100 Index advanced 7.66 to 5,773.46 at the close in London.

The gauge has fallen for three consecutive weeks as US economic data trailed forecasts, adding to speculation the global recovery is faltering.

“MA frenzy could return” to the mining industry, said Atif Latif, the director of trading at Guardian Stockbrokers in London.

There is “large upside potential” after ENRC fell 29 per cent this year, he said.

ENRC rallied 4.7 per cent to 776.5p, the biggest gain since November.

Ivan Glasenberg, Glencore’s chief executive, has held talks in recent weeks with three investors who control about 45 per cent of ENRC’s shares, the Sunday Times said.

Glencore, the world’s largest commodities trader, has not made a formal bid, the newspaper said.

“We would see an all-out cash bid near-term from Glencore for ENRC as highly unlikely and the Swiss-based group issuing more equity is not an option for at least six months,” Miriam Hehir, an RBC Capital Markets analyst in London, said.

Glencore rose 2.8 per cent to 523.5p.

Kazakhmys, Kazakhstan’s biggest copper producer, advanced 2.2 per cent to 1,235p.

Invensys gained 1.1 per cent to 300.9p as the Sunday Times reported that the company may sell its pension programme for £4.2 billion in a move that could make the company a takeover target, without citing its sources. The company’s directors are evaluating proposals to take over the retirement plan from three firms and will select one within months, the newspaper said.

Pension deficit has been the key issue preventing a takeover, UniCredit SpA analysts said May 20.

Imperial Tobacco fell 1.4 per cent to 2,056p, a fifth day of losses.

Adjusted operating profit derived from Spain for the 12 months to September could be reduced by as much as £110 million compared to the company’s previous expectations.

Aggreko dropped 3.2 per cent to 1,874p. – ( Bloomberg)