MARKET REPORT: Asos shares rebound amidst Amazon takeover talk

ONLINE fashion retailer Asos was back in vogue yesterday amid suggestions it could be a takeover target for US internet giant Amazon.

Asos shares rise Amazon takeover talkAsos shares climbed 304p after suggestions it could be a takeover target for Amazon [GETTY]

Shares in Asos, which have slumped from over £70 in February following a string of profit warnings, rebounded 304p to 2227p as UBS told clients to buy with a 4050p target.

The broker said: “Global online fashion is becoming more competitive. Scale and platform are paramount, and we think significant value could be added to Asos via a combination with a larger online retail organisation.

“We think Amazon might be the best fit and could pay £50 per share. It intends to increase its international and clothing exposure and is not averse to consolidating the online retail space. An acquisition of Asos would give access to a fashionable, low price own label offering.”

Miners were the big beneficiaries as investors were tempted back into riskier assets following the recent big sell-off of equities.

Antofagasta and Anglo American gained 26p to 7061/2p and 331/2p to 1348p, while Glencore and Rio Tinto, mooted as potential merger partners, strengthened 63/4p to 3391/4p and 471/2p to 2997p to help propel the FTSE 100 Index 35.74 points higher to 6563.65.

Banking heavyweights Barclays and Royal Bank of Scotland also chipped in after closing their accounts 73/4p and 51/2p in the black at 2321/4p and 372p.

We think significant value could be added to Asos via a combination with a larger online retail organisation

UBS

Oil and gas explorer BG Group was 27p slicker at 1093p after it received a £275million payment from the Egyptian government as part of its commitment to repay outstanding debts to the energy industry.

Engineering and technology conglomerate Smiths Group eased 4p to 1240p having earlier climbed to 1259p as hopes for renewed predatory interest in its Smiths Medical business were lifted by medical equipment supplier Becton Dickinson’s agreed £9.6billion bid for fellow US company CareFusion.

Recruitment giant Hays rose 63/4p to 1223/4p ahead of a trading update due on Thursday as Morgan Stanley told clients to buy with a 160p target, while buy support from Deutsche Bank lifted specialist annuities provider Just Retirement 6p to 1261/4p.

Investors lost their appetite for pork supplier Cranswick, 36p leaner at 1289p, after flat half-year sales, while cash-and-carry firm Booker Group added 1/4p to 120p in anticipation of healthy interim figures later this month.

Defence giant BAE Systems advanced 11/2p to 4611/2p as it secured a £96million contract to upgrade US Army Hercules recovery vehicles, while a drop in crude prices signalling lower fuel costs helped British Airways owner IAG take off 6p to 3711/4p and cruise operator Carnival to sail ahead 51p to 2495p.

*On Wall Street, the Dow Jones was up 31.85 points at 17,041.54 by mid-session.

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