Market round-up: Weir said to be back in the hunt for a Finnish target

A familiar rumour filtered through the market today, but with one key detail changed.

Traders heard that Weir Group, the Scottish engineer to the oil and gas industry, is targeting a Finnish mineral processing company. Minds will immediately jump to Metso, the rock-crushing major for which Weir made an abortive £3.7 billion bid in May. But this time the name in the frame is Outotec, a smaller rival to Metso.

Weir is said to be prepared to offer €12 a share, valuing Outotec at around €2.1 billion (£1.65 billion). But a bid is still just a potential, with Outotec putting out a statement this morning saying it has “not been approached or received a bid for a potential combination”. If such a bid were made, management said they would look at it. Weir, which declined to comment, slipped 16p to 2732.5p.

The Footsie continued its merry march higher today, up 10.03 points at 6805.38, shrugging off concerns over flaring tensions in Gaza and the icy standoff between the West and Russia.

Companies trading ex-dividend tempered gains, with SSE down 49p at 1492.5p and the London Stock Exchange 13p lower at 1933p.

Catalytic converter and chemical group Johnson Matthey also slipped 66p to 2993p after admitting it had been a tough first quarter due to unfavourable currency rates and the loss of a major deal with Anglo American Platinum.

FTSE 250 engineer Renishaw leapt 220p to 1686.5p thanks to a 17% rise in pre-tax profits to £96.4 million in the year to June. It had record revenue during the final quarter and boss Sir David McMurty said it would have been even higher if not for the strong pound.

Banks and brokers were rifling through the bargain bin, with a slew of analysts starting coverage of discount retailers Poundland and B&M Retail.

B&M had buy recommendations from Goldman Sachs and Credit Suisse, both of which worked on the float, and Jefferies. Jefferies dubbed the chain, which sells everything from furniture to cat food, a “profitable disrupter”.

Deutsche Bank was more cautious. It had only good things to say about the business model but noted B&M is trading at a premium to other discounters. B&M added 2.75p to 277.25p.

Deutsche also urged caution on Poundland, warning it could be dragged into the supermarket price war. And Jefferies forecast underperformance for the store, pointing to a slowdown in sales growth. Poundland slid 4.2p to 322.15p.

BUY

Faroe Petroleum

Snap up Faroe, Panmure Gordon recommends. The broker is enthused by the positive news flow from the explorer — this time it’s that production is going to resume on the Njord A facility. Shares are 119p; target is 204p.

SELL

Abcam

Dump Abcam, N+1 Singer says. The broker says the firm is controlling costs “a little better” than it expected but the market remains highly competitive. Shares are 346p; target is under review.

HOLD

Premier Foods

Hang onto Premier, Investec advises. The broker says the food group’s first half has been “slightly better” than it was expecting but trading remains heavily weighted to the second half. Shares are 46.5p; target is under review.