Market Report: Westfield may patch it up and grab Hammerson

They may be at each other's throats, but could Hammerson and Westfield end up together? The two developers are battling it out to see who gets to redevelop the Whitgift shopping centre in Croydon. However, some believe the Aussie giant Westfield may want to put their differences aside and make an approach for its Footsie-listed rival.

According to John Kim, an analyst at the Hong Kong-based broker CLSA, there is a "compelling case" for the group to consider snapping up Hammerson, whose portfolio includes the Bullring (below) and Brent Cross shopping centres in Birmingham and north London.

Saying they would make a "compelling marriage", the scribbler claimed a deal would help Westfield, which last year opened its second London site in Stratford, build on its success in the capital while also gaining exposure to Paris.

A deal, argued Mr Kim, could be largely funded by proceeds from asset sales, adding that Westfield may want to dispose of or joint-venture much of Hammerson's portfolio outside London and Paris.

It is not the first time Hammerson, which ticked up 6p to 416.5p. has been the subject of bid talk. Earlier in the year JPMorgan's scribblers, who suggested the whole of the European property sector could be vulnerable, argued it was one of the most likely takeover candidates.

Although it looked at one point as though the FTSE 100 was going to fall for the fourth straight session, by the close of play it was up 13.9 points at 5,543.95, although it has still lost over 190 points this month.

Helping the rally was a drop in unemployment benefit claims in the US, encouraging a number of the heavyweight miners to shrug off weak data from China, although this did raise hopes China may take further action to boost its economy. Polymetal International, which has lost more than a third since February, took the gold medal position, bouncing up 49p to 816.5p.

With the Qatar Investment Authority again raising its stake in Xstrata, Jefferies' scribes were calling on punters to buy into the miner and Glencore, with whom it has agreed to merge. Pointing out the sovereign wealth fund has bought shares every day for more than a month, accounting for over 40 per cent of the trading volume in Xstrata in that time, they argued it further supported their case that the two should outperform their peers in the near term.

However, Xstrata ended up easing back 9p to 1,088p while Glencore dipped 1.45p to 396.5p, with traders suggesting hopes were falling that the latter will improve the terms of their merger.

Reckitt Benckiser finished near the bottom of the benchmark index after the consumer goods giant's largest shareholder, the Reimann family's trust JAB, sold a 4.9 per cent stake. With the shares placed at a discount of 3,350p a pop, the Cillit Bang maker slumped 126p to 3,440p as Canaccord Genuity's scribblers warned they could not "rule out a further disposal by the Reimanns in the medium term".

On the FTSE 250, Imagination Technologies was enjoying a dramatic rebound. Having shed nearly a fifth this week, the chip designer flew up 100p to 632p while its blue-chip peer Arm Holdings advanced 20p to 507.5p. It was helped by Seymour Pierce's Ian Robertson starting coverage with a buy rating, saying Arm "appears set to extend its leading positions in the mobile phone and data storage markets across other consumer electronics and low-power applications".

The subject of revived rumours recently that it could be a bid target for RWE, power station operator Drax managed to edge up 10p to 566.5p despite the chief financial officer of the German electricity producer saying it was not interested.

Meanwhile, the announcement from Barratt Developments, up 6.5p to 126.4p, that it had seen its best spring selling season for half a decade helped a number of its fellow housebuilders move up, including Taylor Wimpey, rising 2.37p to 46p, and Persimmon, by 26p to 590p.

Gulf Keystone Petroleum has decided to take on the bulletin boards. After rumours of a supposed placing, priced at a heavy discount of 160p, swept the internet, the AIM-listed driller was forced to announce it "categorically... has no intention at present of undertaking an institutional fundraising".

The Kurdistan-focused explorer did not stop there, however, saying it was talking to its lawyers and would take "all available legal action to prevent further repetition of similar speculative comments on bulletin boards and other social media sites". Gulf Keystone also revealed it was still talking to "several interested bidders" over a possible sale of its 20 per cent stake in the Akri-Bijeel block, prompting the punters' favourite to spurt up 32.25p to 221p.