Market Report: Sportingbet is a winner after bid speculation

Sportingbet, the gambling and gaming company which operates in Europe and Australia, was the subject of some bid speculation yesterday.

Late-afternoon rumours suggested that Bwin Interactive, the Austrian gaming firm which abandoned a round of takeover talks with the company last year, was ready to table a 70p per share offer for Sportingbet. According to the grapevine, an approach was likely to be made as early as next week.

While a number of prospective deals, including the one between Ladbrokes and 888.com, and the last round of negotiations between Sportingbet and Bwin, have failed owing to legal or regulatory hurdles, some analysts have continued to argue the case for consolidation in the sector.

Betting companies were deeply bruised by the US government's decision to ban online gaming, and many in the industry have attempted to replace the lost revenue via mergers and acquisitions.

The hope of a deal drove Sportingbet's shares, which climbed by almost 10 per cent at one point, to 43p, up 3.61 per cent or 1.50p.

JD Wetherspoon suffered after a bearish broker report from Goldman Sachs. Citing concerns about margins if like-for-like sales, depressed by lower year-on-year repair and maintenance costs and slowing new openings, fail up to pick up soon, analysts at the bank downgraded the company's stock to "sell", adding it to their "conviction sell" list.

Goldman also downgraded Enterprise Inns to "sell" from "neutral". Driven by growth in rental income, Enterprise has outperformed the sector, but, Goldman thinks, the income stream is likely to take a hit as rent reviews begin to reflect the profitability of leased pubs.

The cautionary note took JD Wetherspoon's share price down by 6.11 per cent or 20p to 307.25p, while Enterprise's stock fell by 3.84 per cent or 16.50p to 413.25p.

Greene King, which was upgraded to "buy" from "neutral" in the same note, also fell, to 675p, down 25.50p.

Overall, the FTSE 100 index, despite a strong showing from financial stocks which were buoyed by pleasing results from Lloyds TSB, closed down 43.70 points at 5888.50. Initially depressed by overnight losses on Wall Street, in Japan and on the Hong Kong's Hang Seng index, the UK benchmark was kept low by sliding retail stocks, which suffered after John Lewis revealed some disappointing sales figures for the week to 16 February. The news depressed Marks & Spencer, which lost 19p to 398.50p, and Next, which fell by 66p to 1291p. Shares in Home Retail Group fell too, down 12.50p to 267.50p.

The index was also dragged down by the mining sector, which endedits rally. By the end of the day, Vedanta Resources was down 124p to 2137p, while Rio Tinto lost 137pto 5685p.

Better sentiment was evident in the banking sector, where Alliance & Leicester's shares mounted a spectacular recovery, climbing by 30.50p to 510p, to first place on the FTSE 100 leaderboard. A&L's rally took it past Lloyds TSB, which had to remain content with the number two spot, gaining 20.75p to 457.50p.

Royal Bank of Scotland, which is due to report its results next week, also had a good day, gaining 4p to 378p.

Standard Chartered and HBOS, on the other hand, were less successful yesterday. Both bucked the trend, and HBOS shares closed down 13p at 646p, while Standard Chartered's stock closed at 1556p, down 9p.

Elsewhere, the FTSE 250 index was down 130.70 points to 10,051. Shanks Group, the waste management company, was lifted by bullish sentiment borne of fresh sector consolidation hopes.

Investors were heartened by reports that the bidding war was brewing over Biffa, another FTSE 250-listed waste management group. The chatter took Shanks's shares up by 5.50p to 245p, while Biffa's share price rose by 3p to 368p.

On AIM, Hertford International gained 6.58 per cent or 2.50p to 40.50p, capping a week in which it announced a new agreement to provide payment card packs to the shipping industry with a rally.

Business Systems, on the other hand, failed to win any mileage from a new deal. The company's shares fell by 1.25p to 15p after it said that its Business Systems Group Ltd subsidiary had won a £2m, five-year IT outsourcing contract from the real-estate adviser Vail Williams.

Humberts Group, which had rallied on the back of some bid speculation earlier in the month, suffered after revealing a full-year loss yesterday. The company, whose share price fell by 0.75p or 6.82 per cent to 10.25p, added that it was still in negotiations with interested parties, signalling the possibility of an offer for the business.