Traders had hoped the company would reveal an offer had been made.
The Cameroon-focused iron ore group is being courted by a number of parties and had been in exclusive talks with an unnamed suitor, rumoured by some to have been a major mining company. Investors had hoped those discussions would lead to an offer for the company before the period of exclusivity expired on January 13.
Although Afferro today said talks with that potential bidder are continuing, there was no word of any offer, sending the shares down 6¼ to 93½p.
Afferro is free to start discussions with other interested parties too. They include International Mining and Infrastructure Corporation (IMIC), which has already made an approach that values the group at between 115p and 140p. However, dealers said that with exclusive talks over, Afferro now faces a more drawn-out and uncertain bidding process.
Analysts were also cautious about the approach made by IMIC, because of the small size of the business, which has market capitalisation of just £17.4m.
“The realisation of value for Afferro depends on an infrastructure partner but they need one with deep pockets,” said SP Angel analyst Carole Ferguson. “We hope the other approaches have capital or access to capital to take this forward.”
Overall, it was a rather muted start to the week’s trading with both the FTSE 100 and the FTSE 250 (FTSE: ^FTMC - news) suffering modest falls. London’s benchmark index dipped 13.72 points to 6,107.86 and the mid-caps shed 38.69 to 12,759.14.
Miner Eurasian Natural Resources Corporation was the biggest blue-chip riser with a gain of 11.4 to 334p.
Worries over ENRC’s debt levels had weighed on the shares at the end of last year, after the group announced it was purchasing the remainder of its Congolese joint venture for $550m (£342.4m).
However, analysts at Credit Suisse (NYSE: CRP - news) today gave a lift to the stock by arguing that ENRC’s “acquisition run” was now over and the company could even make small disposals. That prompted them to raise their recommendation to “outperform” from “neutral”. The shares are now up 17.6pc since the start of the year, a gain that one trader attributed to takeover speculation, talk that others in the market had not heard.
Elsewhere in the sector, investors in gold producer Randgold Resources were relatively unfazed by the French military intervention in Mali, where the group runs the Loulo-Gounkoto mining complex and has a joint venture at Morila.
“The Randgold operations are in safe areas more than 400 miles from conflict zones and have not been affected by any of the issues that have afflicted Mali over the past 10 months, including the recent attacks by rebels in the north of the country,” the company said. Shares in the gold digger slipped 15p - 0.25pc - to £58.85, roughly in line with the 0.22pc decline in the FTSE 100 (FTSE: ^FTSE - news) .
Fund management groups were buoyed by data released at the end of last week showing investors around the world poured money into equities at the start of the month. Schroders (LSE: SDR.L - news) added 49p to £18.68, helped by a price target increase at JP Morgan (Other OTC: JPAAZ - news) to £25.56 from £18.82. Aberdeen Asset Management advanced 6.2 to 397.7p, with JP Morgan lifting its target on the shares to 479p from 414p.
Luxury goods retailer Burberry was among the risers ahead of its trading update tomorrow, with one dealer hearing market speculation the figures will beat expectations. The shares put on 20p to £13.25.
Meanwhile, stock-pickers at Credit Suisse made the case for security group G4S , noting the share price does not take into account does not take into account either the company’s organic growth prospects or the firm’s ability to boost value through takeovers.
On the FTSE 250, gold miner Centamin , which digs for the precious metal in Egypt, continued to rally following supportive comments from the Cairo government last week. Centamin (Toronto: CEE.TO - news) has been knocked by a number of problems in Egypt in recent months, including a court ruling that found its right to mine at the Sukari project, its main asset, was invalid.
But petroleum minister Osama Kamal said Egypt’s agreement with the company was a “good model”, bolstering investor confidence in the shares. Centamin rose 2.95 - 5.3pc - 58¾p, adding to the 9.1pc gain the shares booked on Friday.
Taking the wooden spoon on the mid-cap index was coal producer New World Resources , which is currently negotiating prices for both thermal and coking coal. The group said it expects average agreed prices for thermal coal to fall this year, adding that the coking coal market will continue to experience pressure on pricing in the short-term. The FTSE 250 company, which revealed it would cut capital expenditure this year by between 30pc and 50pc, tumbled 24.8 to 292½p.
Also among the fallers was chip designer Imagination Technologies (Other OTC: IGNMF - news) , off 29.6 to 435.3p, amid worries Samsung is looking to FTSE 100 competitor ARM Holdings , 3 better at 873p, for its next-generation smartphone chip.
Analysts at heavyweight broker Goldman Sachs (NYSE: GS-PB - news) said “anecdotal evidence” indicated the Samsung chip would use “plenty of intellectual property” from ARM, and decided to take Imagination (Other OTC: IMGTY - news) off their so-called “conviction buy list”.
Lower down the scale, there were some stand-out movers among the small-cappers. Medical technology group ANGLE leapt 40½ to 69½p after discovering a new use for its non-invasive cancer diagnostic product.
The news that Cluff Natural Resources had won its first projects an 100pc interest in two underground coal gasification licences saw shares in the company jump ¾ to 4.375p.