Market report: Investors gush over Severn Trent talk

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Canadian investment heavyweight Borealis Infrastructure is said to be circling the water company, two years after its advances were rejected.

In June 2013, Severn turned down a 2200p-a-share bid from a consortium including Borealis. Whether former bidding partners USS and the Kuwait Investment Office would rejoin the current race for the FTSE 100 firm remains to be seen.

Severn shares were up 56p to 2111p, valuing the group at £4.9 billion, just below the reported £5 billion bid.

Recently-installed chief executive Liv Garfield has steered Severn through troubled waters lately. Profits more than halved last year and its dividend was cut by 5% as watchdog Ofwat moved to lower household bills.

The bid chatter spurred rival water company United Utilities 21p higher to 973p.

The benchmark FTSE 100 index jumped 78.88 points to 6789.33 ahead of what could be a decisive day for Greece. Investors were hopeful a deal could be reached today at the emergency summit of European leaders in Brussels. Greek Prime Minister Alexis Tsipras has unveiled the latest plans to try to avoid a default, which appear to hold more promise than previous proposals.

Shares in cruise-ship operator Carnival sailed 139p higher to 3307p ahead of tomorrow’s first-half results. Deutsche Bank, which upgraded the stock to buy, reckons the figures will be at the upper end of guidance.

Over on AIM, Savannah Resources shot up 74% to 3.58p after revealing it is merging its heavy mineral sands assets in Mozambique with those of mining giant Rio Tinto. The explorer has the chance to own up to 51% of the new joint-venture company, while Rio has agreed that it or one of its subsidiaries will buy the output from any mine.

Struggling budget African airline fastjet, up 1p at 101.75p, has offloaded Fly540 Ghana, the loss-making venture it inherited from Lonrho. EasyJet founder Stelios Haji-Ioannou owns close to 10% of the AIM-listed carrier.

Crystal Amber Fund, the activist fund run by Richard Bernstein, rose 4p to 157p after chocolatier Thorntons accepted a £112 million offer from the maker of Ferrero Rocher and Nutella.

Ferholding revealed it has already acquired Crystal Amber’s stake, which was over 18%, as part of the takeover.

AIM minnow Imaginatik leapt 41% to 7.93p as it confirmed it is aware Rob Terry’s investment vehicle, Quob Park Estates, has been buying shares in the company. Terry quit Quindell last year amid a share-dealing scandal.

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June 23, 2015 |
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