MARKET REPORT: Hays is primed for a takeover with Adeco heading the queue
Hays could be set for new ownership with Adecco rumoured to be keen on a takeover bid
There's no getting away from it, recruitment firm Hays is a prime takeover target.
Its shares halved last year but have rallied from a 52- week low of 59p to close yesterday 5.85p higher at 79.95p on a hefty turnover of 14m-plus shares amid revived hopes that a bigger European rival will soon put it out of its misery.
Dealers heard again that ubiquitous Swiss human resources group Adecco could be lining up a knock-out 2.1bn or 150p-a-share cash bid.
Adecco's last major acquisition was its 810m purchase of US staffing group MPS.
It walked away from a 1.3bn or 400pa- share bid for Hays rival Michael Page, 6.8p better at 425.2p in September 2008.
Recruitment companies have greater exposure than most companies to changes in the economic outlook and that's why their shares have taken a battering over the past year or so.
Hays operates in 30 countries but the lion's share of its business comes from the UK and Australia, where the group has operated for more than 20 years, and Germany.
It reported a second-quarter trading update last month ahead of interim results due on February 22. In the quarter to December 2011, like-forlike net fee growth was 8pc with strong performances in Asia Pacific, Continental Europe and rest of the world divisions.
Although respectable, the 8pc growth rate represented a significant slowdown on the 15pc growth achieved in the first-quarter. Mick 'the miner' Davis's Xstrata soared to 1,279.35p before closing 111p higher at 1,230.5p following confirmation that it is in talks with controversial commodities trader Glencore, 29.95p up at 461.7p, about a possible all-share 'merger of equals' which would value the enlarged group north of 50bn.
The not entirely unexpected news prompted hefty demand for platinum miner Lonmin, 22p better at 1,082p. Xstrata still owns 24.6pc of Lonmin after abandoning an approach as the economic crisis was unravelling.
Dealers are hopeful that if Davis cannot reach an agreement with Glencore, he will launch another assault on Lonmin. Other miners caught the speculative bug and Vedanta Resources climbed 72p to 1,323p, Anglo American 97.5p to 2,830.5p and Fresnillo 42p to 1,848p.
Rio Tinto jumped 68.5p to 3,980.5p as Citigroup said the group's full year results on February 9 could be one of the most critical in the company's history. The broker says no cash back from the company will result in no re-rating for the share price.
Handing cash back to shareholders would underpin its target price of 49. Disappointing trading statements from household goods giant Unilever (91p down at 1,994p) and drugs group Astra- Zeneca (105.5p off at 2,984p) prevented the Footsie from taking off after the Xstrata/ Glencore merger news.
It breached the 5,800 level at one stage before drifting to finish only 5.35 points better at 5,796.07. Broker Investec forecasts a good year for investors in 2012.
It expects the Footsie to end the year at 6,200, reflecting increasing confidence in the US economy, a belief that Asia will continue to grow in the 'high-single digits' and that while a break up of the Euro is certainly not discounted by markets, European recession is.
Wall Street traded nine points higher in early dealings after US jobless claims last month fell more-than-expected, boosting investor optimism that today's non-farm payroll report would also show signs of a recovery in the jobs market.
Brave punters continued to chase online grocer Ocado 11.35p higher to 109.5p as bid rumours refused to lie down. Revived Cinven takeover talk helped babywear retailer Mothercare rise 12.25p to 205.5p.
WH Smith, the newspapers, books and stationery group, slumped 22p to 537p after boss Kate Swann banked more than 2m after selling 425,000 shares at 550.74p a pop. She joined the rag bag retailer in 2003 and in recent years has been lauded for her stewardship.
It recently revealed that profit growth in the 21 weeks to January 21 was in line with expectations even though sales open over a year fell 5pc. Caza Oil & Gas firmed 0.63p to 10.75p following an operational update on activity over the last few months across the company's portfolio of onshore assets in Texas and New Mexico.
Cenkos says the company has a strong balance sheet with no debt, and is funded through its proposed near term drilling and development programme in 2012.
Its target price is 28p. AIM-listed life sciences firm ValiRx put on 0.13p to 0.68p after being granted a patent approval for a cancer screening test acquired by its subsidiary ValiFinn.
The test is part of an already well developed cancer-screening test and the company is now in a position to begin production of it, alongside marketing.
Dealers reckon internet telephony provider Coms is a tiddler to watch.
It soared 0.4p, or 72pc, to 0.95p after serial investor and turnaround expert Ian Smith bought a further 8m shares at 0.5p via his investment vehicle MXC Capital.
He now holds 27.6pc of the equity. Word is he intends to use it a platform to undertake exciting acquisitions in the highly fragmented telecoms field.