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Market overview: 19 March

Today's market overview

■ Financial software developer Misys has announced that it has reached agreement on the terms of a recommended 350p-per-share cash offer by Magic Bidco Limited, an investment vehicle indirectly owned by Vista Funds.

■ Polymers maker, Victrex , has appointed Suzana Koncarevic as Company Secretary and General Counsel.

■ Spread betting firm WorldSpreads has called in the administrators after admitting that it has uncovered potential financial irregularities in its accounts (IC COMMENT).

■ Food manufacturer Premier Foods said sales for ongoing business fell 3.4 per cent, reflecting the tough consumer environment, as it agrees a new re-financing package (IC COMMENT).

Xcite Energy has finally started drilling at its Bentley Field in the North Sea.

■ Leather goods exporter Pittards had to run to stand still in 2011 as the rising cost of raw materials nibbled away at profits.

■ Networking marketing solutions provider Endace has said that revenue for the year ended March 31st is expected to miss market expectations by around 10 per cent due to slow decision-making by a number of clients.

■ Emerging markets-focused drilling company Capital Drilling had a record 2011 on the back of contract wins with blue-chip clients such as BHP Billiton, Centamin and Barrick Gold (IC COMMENT).

■ Caspian Sea-focused oil and gas giant Dragon Oil has announced successful initial testing at the latest well of its Dzheitune field, off the cost of Turkmenistan.

■ Web-hosting and data storage company Iomart said it has achieved a very strong set of results across both its operating segments, ahead of market forecasts, and is confident of further growth in the next financial year and beyond.

■ Northern Russia-focused oil producer Exillon Energy has delayed its short-term output target whilst reporting that losses widened significantly in 2011 due to higher operating costs and selling expenses.

Berkeley Group , the house builder focused on London and surrounding areas, said demand for its residential property in 2012 has remained resilient, encouraging it to top up its land bank.

■  Intercontinental Hotels hopes to tap into the growth of domestic travel in China through a new brand that celebrates Chinese culture.

ITM Power , the clean fuel company, has negotiated a distribution agreement with Singapore-based Horizon Fuel Cell Technologies, that will see its products marketed in Asia and the US.

Iofina , the iodine production specialist, gave a positive update on Monday, saying it was well positioned for 2012 and beyond.

■ Leather goods exporter Pittards had to run to stand still in 2011 as the rising cost of raw materials nibbled away at profits.

■ Ever wanted to match your handbag to the sofa? Well, a deal between the luxury furniture maker Walker Greenbank and Barbour may be of interest.

■ Muzak maker Mood Media is to buy DMX, a US marketing firm that specialises in using music, video and even scent to boost brand loyalty.

■ Shares in biomarker specialist Proteome Sciences rose almost 5 per cent on Monday morning after it announced the EU was to award €11m to a consortium of which it is a member.

Synergy Health , a provider of outsourced sterilisation services to the medical device market and healthcare sector, has announced the acquisition of Leoni Studer Hard from Leoni Group for a cash consideration of around £39.7m, which will be funded out of existing debt facilities.

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Business press headlines courtesy of Weekend City Press Review:

Chancellor set to gamble on 50p tax rate

George Osborne is thought likely to announce in Wednesday's Budget that the 50p top rate of income tax will be scrapped, although it may only be reduced to 45p. In return, the Chancellor would impose restrictions on tax breaks available to high-earners. But David Cameron is said to be unsure of the political impact of the change, with a final decision likely to be taken on Monday. In its lead editorial, the FT also believes scrapping the 50p rate 'would be a mistake'.[Financial Times pp.3, 10]

Worldspreads finds accounts irregularities

Spread betting provider Worldspreads saw its shares suspended on Friday after new management uncovered accounting irregularities believed to amount to a £10m-£12m shortfall in the company's finances. The irregularities were discovered on Friday morning and could lead to the business being put into administration or made insolvent. Earlier last week CEO and founder Conor Foley left the company along with FD Niall O'Kelly.[Financial Times p.13]

Sants to step down as FSA chief

Financial Services Authority CEO Hector Sants is to step down in June, a year earlier than planned. Sants has come under increasing pressure in recent months from some senior politicians and banking executives over the planned regulatory reform of financial services.[Financial Times p.16]

Osborne to bet £40bn on small firms

George Osborne's Budget theme is expected to be 'pro-growth' with details due to be unveiled of the £40bn of cheap loans being made available to small firms, a scheme first announced last Autumn. The Chancellor may also cut the 50p top tax rate to 45p in return for ending tax breaks on the wealthy.[Sunday Times pp.3.1, 1.6, 3.8]

Second time lucky: buyout firm snaps up Foxtons again

BC Partners is poised to retake control of the Foxtons estate agency chain that it bought from founder Jon Hunt for £360m before the credit crunch. BC still owns 30 per cent of the firm after losing control to the banks in a debt restructuring, but is now buying up the debt in a deal which values Foxtons at up to £250m.[Sunday Times p.3.1]

Vodafone eyes £1bn tax holiday from CWW takeover

Vodafone could gain a £1bn tax windfall if it acquires Cable & Wireless Worldwide , leaving it free from paying corporation tax for several years. But such a tax break could reignite the controversy over previous tax avoidance schemes which eventually saw Vodafone make a £1.2bn settlement with HMRC.[Sunday Times p.3.1]

Goldman traders told to come clean

Goldman Sachs is forcing senior bankers involved in major deals to disclose details of their personal investments to avoid allegations of conflicts of interest. The move follows last week's claims from an ex-employee that the bank treated its clients 'like Muppets', raising questions over the future of CEO Lloyd Blankfein. But in his comment column, Dominic Lawson says Goldman's aggressive business style is no secret and actually part of its appeal to clients.[Sunday Times pp.3.2, 3.5. 1.22]

Barclays in mis-selling apology

Barclays has been forced to apologise to the Financial Services Authority for demanding that clients must withhold information from the regulator over the sale of controversial interest rates swaps. The FSA said it was now reviewing whether these swaps were appropriate for those companies that bought them or whether they had been mis-sold.[Sunday Telegraph pp.B1, B2]

Business believes 50p tax rate is major 'deterrent to growth'

An Ernst & Young survey of leading companies shows growing concern over the impact of the 50p tax rate on economic growth. Their views will add to pressure on the Chancellor to scrap or reduce the tax in Wednesday's Budget. Meanwhile, figures this week are expected to show the inflation rate fell to 3.3 per cent in February from 3.6 per cent the previous month.[Sunday Telegraph pp.B1, B7]

Co-op and rival CEO linked over Lloyds deal

Garry Hoffman, CEO of bank acquisition vehicle NBNK , was approached by the Co-operative Group to head its banking division, although the talks failed to lead to a formal offer. The Co-op is the preferred bidder for the £1.5bn branches being sold by Lloyds Banking Group , while NBNK was its main rival.[Sunday Telegraph p.B1]

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By Sharecast and Weekend City Press Review,
19 March 2012

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