Ophir descends as Kulczyk offloads stake

Ophir Energy was a faller on Wednesday as the UK market had its worst day in more than a month.

Poland's Kulczyk Investments said at the close of trade that it was selling its entire 8 per cent stake in Ophir, whose shares had started the day at a six-month high.

Jan Kulczyk's fund had been Ophir's second-biggest shareholder, having backed the explorer before its 2011 flotation.

Earlier, Stifel had argued that bid speculation was likely to be misplaced in the wake of its purchase last month of Salamander Energy.

While Ophir's gasfields in Tanzania could be of interest to an oil major, its producing assets and its Equatorial Guinea gas project lack the necessary scale and its valuation is already too high to justify a break-up, Stifel said. The shares lost 5.3 per cent to 161.9p.

A sell-off among the megacaps and mining stocks meant the FTSE 100 lost 1.2 per cent, or 84.25 points, at 6,946.28. But Anglo American rose 0.8 per cent to £11.39, having been lifted this week by talk among day traders of bid interest. An alternative theory was that Anglo is near to agreeing a disposal.

Weir was squeezed 5.6 per cent higher to £18.36 after its first-quarter trading update raised hopes that orders at its oil and gas business may begin to improve by the second half. In the 2012 cycle, Weir shares began rallying two quarters before oil and gas orders troughed, Deutsche Bank noted.

InterContinental Hotels gained 1.4 per cent to £28.44 after Starwood Hotels said it had brought in Lazard to explore a "full range of strategic and financial alternatives" aimed at increasing shareholder value. "A looming major takeout deal in the space is generally good for valuations across the board," said JMP Securities.

Starwood has long been rumoured to be a potential merger partner for InterContinental, as well as being seen as a possible inversion target for US peers, including Wyndham Hotels.

Next was up 1.7 per cent to £72.85 after good weather in April and an early launch of its summer catalogue meant its quarterly sales beat forecasts.

An upgrade to "buy" from Berenberg helped lift Vodafone 0.3 per cent to 230.4p. A recent improvement in European earnings should continue and a 5 per cent dividend yield looks sustainable, the broker said.

"A Liberty Global acquisition has strong industrial logic in our view but valuation and deal funding are key," Berenberg added.

"Vodafone should prefund a Liberty Global acquisition by selling its Africa, Middle East and Asia-Pacific assets, which could raise £31bn. That would release value from an undervalued asset, allow for a Liberty Global deal with a balanced mix of equity and debt, open the door to a potential £16bn of synergies and be materially enhancing to Vodafone's free cash flow per share whilst improving dividend cover."

Pace, which last week agreed to be bought by US peer Arris, edged 0.4 per cent lower to 412p after co-founder David Hood sold 3.3m shares.

Just Eat led the mid-cap fallers, down 6.5 per cent 449.5p. The stock has gained 47 per cent since December when its pre-float investors last reduced their stakes.

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