On its home turf, BUT entices value-conscious shoppers with the slogan “ Le juste prix”. But what is the right price for France’s second-biggest furniture retailer?

That was the question that investors in Kesa Electricals considered yesterday as the Kingfisher spin-off confirmed that it had received “a number of indications of interest” to acquire the offshoot: an admission that promptly sent its shares up more than 7 per cent. Speculation over the future of BUT has followed Kesa since its 2003 demerger, fuelled by suggestions that Kingfisher had explored its disposal but failed to find a buyer at its price.

That is because the chain, which it bought into 11 years ago, has never sat well within the rest of the group. It relies on a cumbersome franchise network and remains the company’s only excursion into the furniture business, from which BUT draws 60 per cent of sales. The format of mixing furniture with electrical goods appears tired, while in recent years it has come under pressure from the expansion of Ikea in France. There are few synergies with Darty, Kesa’s principal French electricals chain.

More important, BUT, once a star performer, has struggled recently. Profits fell 27 per cent to £32.1 million two years ago and have only just started to recover. Pulling the plug on BUT now would allow Kesa to focus on expanding Darty in Turkey and Italy, and closing the gap between Comet and its bigger rival, DSG International, in the UK. It could also return the proceeds to shareholders through a buyback.

A sale may also trigger fresh speculation about an offer for the rest of Kesa. Jean-Noël Labroue announced his intention to step down as chief executive two months ago and there is a possibility that bidders will take advantage of an impending change at the top.

Kohlberg Kravis Roberts is thought to have offered 325p a share for Kesa two years ago and confirmation of an auction for BUT may be a cue for it, or one of its peers, to return. Elsewhere, Best Buy, of the United States, has been touted as a possible trade buyer.

Yet there is a likelihood that, in selling off BUT, Kesa is preempting the job of private equity, so making itself a less attractive target. BUT is underpinned by £200 million of freehold property, an asset backing on which some shareholders have based their investment.

So what is BUT worth? At £540 million, the upper end of the mooted price range looks too high, with somewhere nearer to £400 million – or one quarter of Kesa’s stock market value – appearing to be more sensible, given forecast operating profits this year of £36 million.

The decision to explore the options for BUT is welcome and has lifted the shares off their 11-month low. But with consumer spending under pressure, 337p, or 16.2 times current year earnings, seems fair enough for now. Hold.

Scottish & Newcastle

While all eyes have been on the impact on beer sales of the smoking ban in England, brewers have had to cope with the more immediate problem of soggy weather. In yesterday’s trading update, Scottish & Newcastle, Britain’s biggest, estimates that the wider beer market fell by 5 per cent in the first half of the year. While the comparison with last year’s World Cup bonanza partly explains that decline, the torrential rain has accentuated an already tough market.

Weather aside, there is comfort in S&N’s disclosure that its brands – in cider as well as beer – are winning market share, although it must be assumed that there was was still a decline. Despite the smoking ban, the purveyor of Kronenbourg 1664 and John Smith’s reckons that the beer market will be “broadly level” in the second half as comparatives improve – and, again, it expects to beat the competition. The cost-cutting and reorganisation of the past couple of years have helped S&N to maintain its preeminent position in Britain and another £10 million of savings will flow through in the second half.

France – where the weather in the north has also been wet – remains difficult, with a strong performance from its top brands offset by “extremely challenging” wholesaling conditions. Baltic Beverages Holding, its joint venture with Carlsberg that takes in Russia, had another storming period, although it faces tougher comparatives in the second half.

The overall tone of S&N’s update was rather muted, but the gains and losses outlined yesterday offset each other so that the company expects to meet full-year profit forecasts. The shares have rallied 22 per cent over the past four months, buoyed by persistent speculation of a tie-up with Carlsberg. Such conjecture looks misplaced and, with no immediate prospect of a takeover, the shares – at 16.9 times 2007 earnings and a 3.5 per cent dividend yield – are no more than a hold.

BowLeven

Kevin Hart, the former finance director of Cairn Energy, has hardly put a foot wrong since taking the top job at the oil and gas explorer eight months ago.

Two weeks into his tenure, the former Deutsche Morgan Grenfell banker snapped up First Africa Oil for £30 million, giving BowLeven a package of promising assets in Gabon, onshore and offshore. More recently, it has met with the success with the drill bit that had eluded it in three years as a public company. In March, BowLeven announced encouraging test results from its IE-2 field off the coast of Cameroon. Yesterday, it disclosed a “significant” gas discovery at the D1 prospect in the Douala Basin near by. It is estimated that D1 could hold 200 billion cubic feet of gas and sizeable amounts of condensate. A third well at its IF prospect, which has showed large quantities of hydrocarbons, is being drilled in August.

What is encouraging for investors – some of whom are nursing hefty losses from BowLeven’s 650p-a-share placing two years ago – is the progress of the New York-listed Noble Energy just across the median line in offshore Equatorial Guinea. Recent finds by the Houston-based company lend weight to the view that BowLeven’s discoveries in Douala can be commercialised. The priority is to prove up reserves in time to win supply contracts for a second liquefied natural gas plant at Bioko Island in Equatorial Guinea. Should IF fulfil its promise, the projects could be developed without a contract, probably in conjunction with Noble. At 220p, up 12 per cent, the shares still sit at the level of last year’s fundraising and are underpinned by £80 million of cash. BowLeven may not have any production, but the potential of Gabon and Cameroon, the 13 per cent stake of Suntera Resources, an Indian-Russian joint venture, and possible interest from Noble, make it worth a look. Buy.

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