FTSE 250 movers: Home Retail surges as Sainsbury's indicates another takeover offer

5th Jan 2016 14:31

(ShareCast News) - The FTSE 250 was in the black by mid-afternoon Tuesday, up 60.04 points (0.35%) to 17,182.19.Home Retail Group surged after Sainsbury's revealed it is still considering making a takeover offer for Home Retail after a November approach for the FTSE 250 retail group was rejected.The FTSE 100 grocer said it was considering its position but there was no certainty that this will result in a formal offer, after the board of the Argos and Homebase owner rejected its initial shares-and-cash proposal before Christmas. Although takeover rumours have been swirling around it, Home Retail has been one of the most shorted stocks on the London Stock Exchange since it issued a profit warning in September due to the uncertainty around Black Friday. The supermarket group said that it believed "the combination of Sainsbury's and Home Retail Group is an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation".Miners Evraz and Vedanta Resources reversed their losses from the start of the week after news the UK construction sector rebounded in December from a seven-month low, led by commercial building activity. The Markit/CIPS construction purchasing managers' index rose to 57.8 from 55.3 in November, beating expectations for a reading of 56.Commercial construction remained the best performing sub-category of activity, with the latest upturn the fastest since October 2014. Tim Moore, senior economist at Markit, said: "UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November's seven-month low. Across the UK construction sector as a whole, the latest survey indicated a strong degree of optimism about the outlook for 2016, with firms mainly citing a strong pipeline of commercial development projects and new housing starts." This also helped boost consultancy, engineering and project management company Amec Foster Wheeler.However AO World was the second-tier market's biggest faller by the afternoon, a week ahead of its third quarter trading update.While the retailer was the subject of a positive broker note from Jefferies this morning which reiterated its rating of 'buy' and an unchanged price target of 192p, the note did highlight that EBITDA estimates for 2016 were down from £1.7m to a loss of £8m, while 2017 will see EBITDA drop from £15m to a £1m loss.And Drax was hit by news that the European Commission will open an in-depth investigation into whether the UK's plans to support the conversion of part of its coal power plant to biomass are in line with EU state aid rules.The EC, whose investigation will focus on UK estimates for the plant's performance, said the help may lead to overcompensation. It added that the estimates "may be too conservative" and could allow the plant to make more money than anticipated. It will also look into whether the plant's demand for around 2.4m metric tonnes of wood pellets a year mainly from the US and South America would distort competiton in the biomass market.FTSE 250 - RisersHome Retail Group (HOME) 135.90p 37.69%Evraz (EVR) 72.80p 6.20%Vedanta Resources (VED) 288.30p 5.91%Amec Foster Wheeler (AMFW) 450.90p 5.75%Spire Healthcare Group (SPI) 315.40p 4.58%IP Group (IPO) 209.00p 4.40%Centamin (DI) (CEY) 68.00p 4.29%UBM (UBM) 531.00p 3.61%Dunelm Group (DNLM) 945.00p 3.56%CLS Holdings (CLI) 1,762.00p 3.16%FTSE 250 - FallersAO World (AO.) 141.40p -8.72%Supergroup (SGP) 1,554.00p -5.53%BTG (BTG) 656.50p -4.86%Cairn Energy (CNE) 155.00p -3.37%Drax Group (DRX) 223.90p -3.24%OneSavings Bank (OSB) 331.50p -3.21%Enterprise Inns (ETI) 105.10p -3.04%Computacenter (CCC) 832.00p -2.58%Electrocomponents (ECM) 226.40p -2.29%Aveva Group (AVV) 1,577.00p -2.05%