Kensington Group rallied from a two-year low on hopes that last month’s agreed bid from Investec may not be a done deal.

Shares gained 5½p to 463½p, with arbitrage funds said to be showing an interest after KBC Peel Hunt started coverage of the mortgage lender with a “buy” rating. Its team argued that minority shareholders could force the South African bank to sweeten terms in order to gain the required 75 per cent acceptances, or that another predator may emerge. Meanwhile, shares were underpinned by Investec’s cash-and-paper offer, which was worth 471p at yesterday’s close.

Another takeover candidate, the data warehouse operator IX Europe, was up 2½p to 111½p after being added to Charles Stanley’s “buy” list. It argued that shares were undervalued even if a bid does not complete.

A trading suspension was lifted on Palladex, up 1.63p at 5.75p, after the precious metals miner bought sites in Ethiopia and Sierra Leone.

Oasis Healthcare jumped 15½p to 85½p as traders anticipated a bidding war. The dental practice operator accepted an 82p offer from Duke Street Capital, the private equity firm, only for its dentistry rival ADP Healthcare, to say it was considering options. ADP is understood to have had at least three preliminary offers for Oasis rejected.

The internet traffic manager Sandvine jumped 28½p to 262½p after it raised 2007 revenue guidance and said it had signed up a US broadband provider, rumoured to be the tele-coms company Qwest.

Clipper Windpower sank 27p to 876½p after product delay worries led Goldman Sachs to add the wind turbine maker to its “conviction sell” list. Clipper’s plans to move production from zero to at least 20 units a month looks far too ambitious in a market constrained by quality problems and supplier bottlenecks, it said.

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