Balfour climbs as bargain hunters arrive Bargain hunters arrived for Balfour Beatty on Tuesday with bid hopes helping to support the rally. Merrill Lynch, Balfour's joint house broker, argued that the shares would be worth 230p even if UK construction is considered worthless. It reckoned investors are subtracting £500m of enterprise value for the division, which has caused Balfour five profit warnings in two years. Against that, Balfour offers an accelerating US business and £1bn portfolio of public-private partnership projects, Merrill said. The company therefore "retains significant M&A appeal for a player looking for a back door to its portfolio of PPP assets and willing to take a 2-3 year view, before potential UK restructuring starts bearing fruit." Balfour closed up 8.4 per cent at 176.8p. Takeover Panel rules mean that Carillion cannot make an offer for Balfour before February, having had a 300p per share offer rejected. Retailers held the wider market back, leaving the FTSE 100 barely changed at 6,731.14. J Sainsbury lost 4.3 per cent to 241.4p and Wm Morrison, which has rebounded 20 per cent since the start of November, retreated 3.2 per cent to 181.1p. Kingfisher was off 4.1 per cent to 291.3p after warning of a deteriorating outlook in France, its biggest market. Sky led the blue-chip risers, up 2.6 per cent to 918p, as theories continued to circulate on how it and Vodafone may respond to BT's potential purchase of a mobile network. "While Vodafone does not need to buy Sky to provide TV it may be attracted by its customers base and the potential for cross selling and cost savings," said Merrill Lynch. Given buying Sky would preclude other deals, it would have to weigh this up against buying TalkTalk, a bitesized challenger with a customer base without legacy TV revenues to defend, and Liberty Global, which can offer a customer base and a best-in-class fixed network in Germany and UK, which unlike TV is difficult to replicate. Vodafone edged 0.2 per cent lower at 224.6p and TalkTalk was up 0.4 per cent at 301.8p. Zoopla Property fell 6 per cent to 178.6p against a 220p flotation price in June. Earnings from the website met market expectations but membership numbers slipped ahead of the launch of Agents" Mutual, a co-operative-run rival, which management said "may have some short-term impact." Paragon, the buy-to-let mortgage lender, rose 7.7 per cent to 406.9p after announcing a surprise £50m share buyback with in-line annual results. Sinclair IS Pharma jumped 12.3 per cent to 36.5p after the wrinkle-cream developer confirmed it had been approached by international companies interested in M&A, licensing and development collaborations. The group said that it had brought in Rothschild to consider strategic options, which may include a sale of all or part of the company. A profit warning sent Eclectic Bar Group tumbling below its float price a year ago of 160p, down 26.3 per cent to 139p. The novelty bar and club mini-chain blamed poor October trading.