FTSE 250 movers: LSE could be back in play

25th Oct 2010 14:59

Confirmation of the $8.4bn takeover of the Australian Stock Exchange by its Singaporean counterpart has put a takeover of the London Stock Exchange back on the agenda.In 2007, US electronic stock exchange NASDAQ failed in its second attempt to wrest control of the London Stock Exchange (LSE) after the LSE's shareholders spurned a £2.7bn offer. The current market capitalisation of the LSE is now loitering around £2bn, suggesting that were the NASDAQ to return with an offer on similar terms to its 2007 bid, it might find a more favourable response. In contrast, bid euphoria seems to be fading for legacy software specialist Micro Focus International. Rumours swirled around the market on Friday that venerable technology giant IBM is lining up a cash bid that would put a valuation of more than £1bn on the Berkshire based company, which currently has a market value of around £820m.Broker Panmure Gordon, an inveterate cheerleader for the stock, can certainly see the commercial logic in a merger. "A company like Micro Focus that is global, has more than 30 years of expertise and more than 15,000 customers including more than 70 of the Fortune Global 100 companies and one million licensed users should indeed be an interesting acquisition target," reckons Panmure analyst George O'Connor. "We think that there is enough in the rumour to get the shares moving hence we retain our Buy and 465p price target," O'Connor adds.O'Connor thinks that IBM could provide a vital missing piece in the Micro Focus offering. "While Micro Focus competitors tell us that Micro Focus loses bids because it talks too much about the legacy and the 'new' environment - but does not concentrate on the process of moving from one to the other. Micro Focus is keen to retain the purity of its software business and defer the migration to its implementation partners (like Accenture). However, this is a big problem for the customer. In this IBM, more precisely IBM Global Services, would have an opportunity to 'square the customer circle'," the broker reckons.FTSE 250 - RisersFidessa Group (FDSA) 1,732.00p +6.26%Daejan Holdings (DJAN) 2,669.00p +5.58%London Stock Exchange Group (LSE) 740.50p +5.04%Ocado Group (OCDO) 144.00p +4.96%Euromoney Institutional Investor (ERM) 649.50p +4.93%Computacenter (CCC) 378.40p +4.82%Hochschild Mining (HOC) 487.00p +4.73%Dixons Retail (DXNS) 27.44p +3.94%Tate & Lyle (TATE) 525.00p +3.75%Mitchells & Butlers (MAB) 324.00p +3.65%FTSE 250 - FallersMicro Focus International Plc (MCRO) 398.70p -3.11%Unite Group (UTG) 211.10p -1.81%Cable & Wireless Communications (CWC) 52.20p -1.69%Redrow (RDW) 116.00p -1.61%Ultra Electronics Holdings (ULE) 1,859.00p -1.48%Morgan Crucible Co (MGCR) 250.60p -1.38%BBA Aviation (BBA) 195.30p -1.36%Salamander Energy (SMDR) 224.30p -1.32%Aberdeen Asset Management (ADN) 170.10p -1.28%Hansen Transmissions International NV (HSN) 41.00p -0.97