The last time Mick Davis, Xstrata's chief executive, proposed an all-share merger of equals, Cynthia Carroll, Anglo American's chief executive, politely declined. Now Xstrata shareholders are in a similar position. They should politely decline this initial offer too, reckons the Daily telegraph's Questor column.

The deal is all in paper. Xstrata shareholders have been offered 2.8 shares in the new Glencore for each they own. Glencore shares closed at 460¾p yesterday, so the terms would equate to £12.90, which would represent a 15% premium to Xstrata's share price of £11.20 ahead of confirmation of the merger talks. For long-term investors in Xstrata, Questor does not feel this is enough. Indeed, the average Xstrata 12-month price target for the City analysts monitored by Bloomberg is £13.45. Of course, because it is an all-share deal, investors will participate in any future upside of the merged entity, but the initial premium still looks too low. It is, however, a good place to start. So, The Telegraph´s Questor team says sit and await developments.

Online gaming software developer 888's performance in the second half of 2011 was flattered by weak comparative figures, Tempus in The Times notes, and a series of question marks hang over the business, notably the firm's ability to fund earn-outs from previous acquisitions, the matter of a permanent appointment of a Chief Executive Officer (CEO), and then there is also the vexed issue of the USA and its regulatory issues.

Tempus said the earn-out fears have been put to bed, while the current acting CEO, Brian Mattingley, looks to be the obvious man for the job - 888 is expected to make a formal announcement soon.

As for US regulatory problems, "888 is ahead of the rest of the British pack, having jumped through two thirds of the necessary hoops to set up online poker in Nevada and lined up Caesars Interactive Entertainment as the operator once this is allowed." Expansion elsewhere will be piecemeal, on a state-by-state basis, however.

A resumption of dividend payments is on the cards and while most of the company's problems seem to be behind it, that has been reflected in a strong share price performance, leaving the shares on more than ten times earnings for this year. Leave for now, is Tempus's advice.

Dido Harding, the chief executive of TalkTalk, once likened the integration of Tiscali, with its one million-plus customers, to a snake swallowing a goat. The process of digestion is now complete; the last customers moved on to the TalkTalk platform in October, Questor in the Telegraph notes. This means that the company should reach a tipping point some time in the first half, when the number of customers leaving, for whatever reason, is counterbalanced by the number joining and the net figure of 4.1m phone and broadband customers will start to rise again.

The company is now a "mature disruptor", Harding says. This means it comes in and steals market share from established rivals with cheaper offers. This spring will mark the arrival of an Internet TV service, to compete with BSkyB and Virgin. Later in the year there will be an "entry-level" mobile phone handset. TalkTalk shares leapt 12½p to 131½p yesterday and sell on just under eight times' this year's earnings. Attractive long-term, assuming all problems are behind the company, even if immediate progress could be slow.

AB

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