Sportingbet surges after reaching non-prosecution agreement in U.S.
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) — The oil and gas sector boosted U.K. stocks Tuesday, with Cairn Energy climbing after an update on its drilling activity in Greenland and pipeline manufacturer Wellstream Holdings surging on hopes of a takeover.
Shares of Cairn (UK:CNE 439.10, +12.30, +2.88%) were the strongest performer in the main U.K. index, rising 3.1% after the company said its Alpha-1S1 well in Greenland encountered oil intermittently and is being deepened. It added, however, that another well in the region didn’t result in a commercial discovery and has been abandoned.
Heavyweight BP PLC (UK:BP. 415.05, +3.70, +0.90%) (BP 38.68, +0.65, +1.71%) rose 1.4%, adding to gains in the previous session after its Macondo well in the Gulf of Mexico was finally killed over the weekend.
The gains helped drive the benchmark FTSE 100 index (UK:UKX 5,623, +20.27, +0.36%) up 23.92 points, or 0.4%, to 5,626.46. Other European markets also moved higher Tuesday. See Europe Markets
Among smaller stocks, Wellstream (UK:WSM 772.50, +163.50, +26.85%) , which makes flexible pipes for the oil and gas sector, jumped 29% after saying it had received a number of approaches about a potential takeover.
The company, which didn’t provide further details, has changed hands several times in recent years and was listed on the London Stock Exchange in 2007.
Online gambling firm Sportingbet PLC (UK:SBT 78.25, +8.25, +11.79%) was another big mover, rising over 11% after announcing it will pay $33 million as part of a deal to ensure it won’t be prosecuted for offering gambling services to U.S. customers between 1998 and 2006.
“With the removal of this major regulatory concern, we view Sportingbet as an ideal takeover target,” said analysts at Altium Securities in a note to clients.
“Proposals to legalize and tax online gaming are currently underway in key European markets and also in the U.S., which should lead to enhanced levels of competition but is likely to result in a significant expansion in the size of the market and a notable increase in M&A activity,” the broker added.
Shares of PartyGaming PLC (UK:PRTY 293.20, -0.90, -0.31%) , which is seen as a possible bidder for Sportingbet, fell 0.6%.
Also Tuesday, online betting exchange operator Betfair announced plans to list on the London Stock Exchange.
Elsewhere in London, shares of television company ITV (UK:ITV 59.00, +1.25, +2.17%) rose 2.2% after it was upgraded to overweight from neutral by J.P. Morgan, which said the shares have lagged compared to a relatively strong performance from media stocks over the last year.
