SPECULATION is rife in investment circles that an unknown investor is amassing a stake in Adelaide-based Futuris Corporation.
Turnover in the stock has been heavy in the past two months after the company announced on May 25 that it expected underlying profit for the year to June would be 10 per cent lower than market forecasts. Futuris owns Elders, the world's largest wool broker, and has interests in the automotive parts and forestry industries.
A Melbourne-based fund manager, who requested anonymity, said yesterday that the London-listed investment holding company, Guinness Peat Group, was believed to be building a stake in the company.
"Since late May there have been some extraordinary days of trading on Futuris interspersed by more normal trading patterns," the fund manager said.
"There have been at least ten days since the May profit downgrade that the stock has been trading at more than twice its average daily volume."
While the Futuris share price yesterday closed down 1 to $2.05 on light volume, it has risen more than 22 per cent since the first week of June.
One of the most active trading days was July 7 when almost 4 million shares changed hands.
The average trading volume for the stock is under 2 million shares.
Trading in the stock was most frenetic last month.
Around 6.2 million shares were traded on June 16 and almost 5 million on June 10.
Broking analysts refused to comment on the prospect of the Sir Ron Brierley-chaired GPG mounting a takeover of Futuris.
UBS analyst Anthony Aboud said Elders was the crown jewel of the Futuris business.
"The key asset is Elders because it generates the most value within the group," Mr Aboud said.
"Elders accounts for just under 30 per cent of the rural merchandising market in Australia."
Futuris disclosed in May that its earnings were not likely to meet market forecasts because of increased interest charges.
The rural merchandising operations have come under pressure from the impact of the drought on farm production.
Mr Aboud is forecasting Futuris to announce a net profit of $65 million for the 12 months to the end of June and a dividend of 8 per share.
Chief executive Les Wozniczka is to unveil the full year results in August.
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