Kelda shares surge on bid approach

The water group leapt to the top of the mid-cap gainers list after confirming an approach from an infastructure consortium that includes divisions of Citigroup (NYSE:C) and HSBC.

The consortium is offering £11 a share for Kelda, which becomes the latest utility to be targeted by an infastructure fund. Kelda rose 14.7 per cent to £10.75.

In the wider market, the FTSE 100 rebounded after falling more than 3 per cent in the previous three sessions.

Dealers looked forward to a less frenetic few days, with US markets closed today for the Thanksgiving holiday.

The main index was up 56.9 points, or 0.9 per cent, to 6,127.9 while the mid-cap FTSE 250 rose 63 points, or 0.6 per cent, to 10,275.8.

Wm Morrison was the leading blue-chip gainer, up 7.8 per cent to 292p, after the grocer reported a strong start to the second-half trading period, with like-for-like sales in the 14 weeks to November 4 up 3.7 per cent.

Although Morrison expects its markets to "remain competitive" and was cautious on the outlook for UK consumer spending, the numbers lifted fellow grocers.

Tesco rose 1 per cent to 46 7½p and J Sainsbury added 0.6 per cent to 410p.

Elsewhere on the high street, sports retailers were hit hard as England's failure to qualify for the 2008 European Football Championships prompted an immediate profit warning from Sports Direct.

The troubled retailer, the UK's biggest seller of England replica shirts, tumbled a further 17 per cent to 93.3p after it said full-year earnings would fall year-on-year, wiping out previous forecasts of growth.

Fellow sports retailer JJB Sports slumped 8.8 per cent to 133p while Umbro, which makes the England kit, fell 2.9 per cent to 169½p despite a pending takeover from Nike.

Other retailers also lost ground amid signs that trading over the key Christmas period could be difficult, with DSG International down 3.1 per cent to 103.7p and Home Retail Group off 2.5 per cent to 342½p.

Severn Trent fell 0.5 per cent to £13.62 after it confirmed the Serious Fraud Office investigation into the company's alleged misrepresentation of leakage data in regulatory filings would result in three charges.