The FTSE 100 had a decent day, rising 0.7% to 7,095 in spite of early falls in US markets. The FTSE has been boosted by rising bank shares and a bit of takeover gossip. The FTSE 250 didn’t do as well and slipped 0.15% to 17,890.

Read on to find out about the bid speculation surrounding easyJet and a chunky rise in the Royal Mail share price. 

The government has said that a large investor in International Distribution Services (IDS), which owns Royal Mail, can continue to build his stake. The Czech billionaire Daniel Kretinsky already owns 22% of IDS via his Vesa Equity vehicle, but further share purchases had been blocked while an investigation into the national security implications of any purchase was completed.

Vesa can now start buying again and the shares are up 5.3% to 204p. In further good news for IDS shareholders, unions have called off strikes at Royal Mail over the next fortnight. The Communications Workers Union (CWU) delayed the strikes after Royal Mail management suggested that the union’s strike notifications may not have complied with legal requirements. 

The Government won’t impose a windfall tax on UK banks, according to a report in yesterday’s Sunday Times. Apparently, the government has been swayed by the argument that a bank windfall tax will damage the City and deter foreign investment in the UK. The news helped NatWest (NWG) bounce back from big share price falls on Friday when the bank reported lower-than-expected profits.

NatWest closed 4.4% higher at 234.8p, Lloyds (LLOY) was 1.8% higher at 42.02p, and Barclays (BARC) was 0.9% higher at 147.8p. 

The Times reported this morning that IAG (IAG), the owner of British Airways, is considering buying another airline and easyJet (EZJ) or Portugal’s TAP are the most likely candidates. As a result, easyJet’s shares closed 6.1% higher at 348p.

So why might IAG want to buy easyJet? 

The main rationale is that the growth of video meetings means business travel may never return to pre-pandemic levels. Leisure travel will probably be more resilient. British Airways is very much weighted to business travel; easyJet is the reverse. You could also argue that easyJet looks cheap. It trades on a multiple of 12 times forecast earnings for next year and the balance sheet is in pretty good shape. That said, don’t assume that a takeover bid is a sure thing. Far from it. Very often, mooted bids never happen, and even if IAG does decide to buy another player, it could go for TAP or perhaps Wizz Air (WIZZ), up 6.9% at £17.22.

Shares in IAG also rose today, climbing 5.4% to 121.5p. The rise is a little odd. History tells us that takeover bids often work out badly for the buyer. Often bids are driven by the egos of CEOs who pay too high a price and then struggle to successfully integrate the two companies. What’s more, IAG already carries a lot of debt, so a purchase could trigger a fresh share issue to fund the acquisition. If IAG funded the takeover with debt, the balance sheet could get very stretched.

Positive comments from three brokers boosted the Centrica (CAN) share price today. Barclays and Citi both raised their price targets on the stock while Jefferies raised its rating to "buy".

Jefferies highlighted Centrica’s "strong free cash flow generation and resilient balance sheet". It also pointed out that Centrica is "integral to the UK’s security of supply and … the policy environment will remain balanced if not favourable". In other words, Jefferies thinks that Centrica won’t be hit by any further windfall taxes. The shares closed 4.7% higher at 76.6p.

Shares in Lok'nStore (LOK) have soared 15% to 960p after some cracking full-year results. The company operates properties where you can store "stuff" and last year revenue jumped 23% to £26.9 million.

Even better, the net asset value (NAV) per share has risen 35% to 972p. Much of that rise is down to four "sale and manage back" deals where Lok'nStore has sold freeholds on properties but will still make money running the facilities. Lok'nStore can use the cash to open new branches elsewhere.

Shares in Blockchain miner Argo Blockchain (ARB) have crashed 54% today to 7.2p and insolvency looks the most likely endpoint. A previously announced investment has been canned and that has sent the shares tumbling. Just three weeks ago Argo announced that a "strategic investor" was willing to buy new shares in the business at 27.6p a share, investing £24 million. Trouble was, the share price soon fell below that 27p level, and the lower if fell, the more likely the investor would back out. That’s what happened today.  

Argo was very popular with investors in 2020 as bitcoin soared, but the company mistakenly borrowed too much and was then very vulnerable when the bitcoin price dropped and energy costs rose.

There are three things that could now happen. The first possibility is that Argo will be able to secure cash at a much lower share price from an investor, but that lower price would mean that the new investor would end up owning most of the company. Existing shareholders would end up very much in the minority. The second possibility is that there is a rapid and very large rise in the bitcoin price, which would enable Argo to make money. All would be well. This is highly unlikely as it probably needs to happen this month or it will be too late. The third possible outcome is insolvency, which looks like the most likely scenario. The company itself admits: "Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations". 

Even if you’re a big fan of Crypto and think that currency prices will soar from here, buying shares in Argo is not the way to play that theme. 

Paper and packaging firm James Cropper (CRPR) has been hit by rising energy and raw material costs. As a result, the company will only break even in the first half and expects to make a full-year profit of £2 million. Markets had previously expected a profit of £5.4 million. The share price has slumped 11.5% to 880p. 

Property site Zoopla predicted that UK house prices will drop by around 5% next year. That news has helped to push the Foxtons (FOXT) share price down by 2.4% today to 30p.

Today’s fall follows a strong positive share price performance on Friday when Foxtons emphasised that a big part of its business was in rentals rather than sales. That should make Foxton’s business a bit more resilient in any downturn, but the company will still suffer if property prices fall and the number of transactions goes down too.

Now take a look at our weekly share tips