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MARKET REPORT: Lloyds Bank takeover talks boost Metro shares


These days Metro Bank’s shares seem to be as easily moved by rumours and reports as they are by actual company news.

The embattled challenger lender ended the week on a high, with a sharp rise in shares seemingly triggered by a report in the Evening Standard that Lloyds Bank is mulling a takeover.

Lloyds (up 0.9 per cent, or 0.51p, to 57.31p) is the latest potential buyer suggested by the City rumour mill, joining the ranks of Royal Bank of Scotland and HSBC, which the City grapevine says is also keen.

It comes after founder and chairman Vernon Hill moved from an executive role into an ’emeritus chairman’ position, in the fallout of a major accounting error that left a black hole in its books.

Metro shares are certainly at a bargain basement price. Despite rising 14.4 per cent, or 29.2p, to close at 232p last night, they have still shed 86 per cent in value so far this year.

Perhaps more of these rumours could be just the trick. Elsewhere, the boss of one of Britain’s biggest car dealerships stepped down after reporting a ‘disappointing’ slump in trading.

Lookers warned it expects profits to more than halve this year –just four months after it last issued a profit warning in July.

In a trading update, it said it had a more difficult third quarter than expected and predicts full-year profits will come in at £20m, far less than the £64m it made last year and below the City’s forecasts.

It comes as car companies around the world are grappling with stagnating sales, amid a dramatic fall in the popularity of polluting diesel vehicles.

Lookers boss Andy Bruce and operating chief Nigel McMinn agreed to step down after the update, which sent shares plunging by as much as 27 per cent.

They later clawed back most of the losses, finishing 1.8 per cent lower, down 0.9p, at 48.7p. Fellow car-seller Auto Trader was dragged lower by Lookers’ gloomy announcement, sending shares falling 3.2 per cent, or 18p, to 544.2p.

Miner BHP rose 2.4 per cent, or 38.6p, to 1673.4p, after it said it will spend £34m on preparations to restart operations at its Samarco iron ore in mine in Brazil.

It comes after a tragedy at the mine in November 2015 when the wall of a dam holding waste material collapsed, spewing a torrent of toxic mud over local villages and killing 19.

The Anglo-Australian mining giant said it has been given the green light from local environmental authorities to start work on the site.

The money will go towards building a filtration plant, which it estimates will take a year to build, and it will then be able to reopen the mine. BHP owns 50 per cent of the joint venture, while Brazilian miner Vale owns the other half.

TP Icap, which negotiates deals in shares between big financial institutions, said its third quarter revenues were boosted by market turmoil that followed worries of a global recession and the undulations in the US-China trade spat.

Revenues rose 17 per cent to £478m, the company said in a trading update, sending shares 6.5 per cent higher, up 22.1p, to 365p.

Flares maker Chemring bagged a US defence contract and delivered a modest upgrade to profits, which it believes will come in slightly higher than expectations.

The deal sent shares shooting 2.2 per cent, or 4.5p, higher to 205.5p.

BBA Aviation closed 1.8 per cent, or 5.4p, higher at 309p after it said it would return £645m to shareholders following the £1.1 billion disposal of its aerospace parts arm Ontic.

The FTSE 100 was mostly treading water but managed to rise 0.8 per cent, or 54.04 points, to finish at 7302.42. The FTSE 250 edged 0.7 per cent, or 137.27 points, higher to 20158.77.

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