Market Report: Enodis cooks up a rise on rumours of two offers

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The Independent Online

Three years ago, there was little hope for Enodis, the commercial oven and refrigerator manufacturer. The fast-food restaurant business it supplies was in dire straits and the company was crippled by a debt pile that looked like driving it to the brink of bankruptcy. Since then, it has achieved a remarkable turnaround that traders believe may see the company sell out at more than 20 times its low price of 27p.

Enodis has turned down one takeover bid in the past month, when the US rival, Middleby, offered 195p per share. The rumour doing the rounds yesterday was that there are potentially two more offers in the pipeline, both of which could come next week.

Electrolux, the Swedish kitchen appliances giant, is thought to be mulling an offer as is Manitowoc, a US rival. Traders said there is also private-equity interest in the group that could result in a bidding war for Enodis. So good has the financial turnaround been at the group, traders said they would not be surprised to see the price go as high as 250p, valuing the company at a little more than £1.1bn including debt. Shares in Enodis ticked 2.25p better in yesterday's session to close at 190p.

There was good buying support for blue-chip stocks in London as the market closed on two successive days of big gains. There was strength across the board, as only one stock in the FTSE 100, the sugar producer Tate & Lyle, ended the session in negative territory, with the main index closing 113.3 points better at 5,791.1. Even Tate was only a penny lower at 563p.

PartyGaming was well bid despite the resignation of two founding directors earlier in the week and Thursday's Senate vote on a proposal to prohibit online gambling. The brokers Numis Securities and Morgan Stanley said the US bill, in its current format, is likely to be diluted if and when it becomes law. PartyGaming rose 4.25p to 128p. Other gambling stocks were also in demand, with 888 Holdings 14.5p better at 208p.

Sticking with gambling, the casino operator Stanley Leisure was once again the subject of takeover rumours, sending the stock up 23 to close at 680p. Rank Group has been linked with a bid, and traders said the recent market sell-off might tempt it to make an offer for Stanley at 750p per share. Stanley closed 26p better at 683p while Rank added 1.75p to close at 211p.

After a week of heavy selling, second-line property stocks found strong buying support. The sector has seen a raft of strong trading statements and substantial increases in net asset value in the latest round of results, and traders piled in to St Modwen Properties, 44.5p better at 495p, Workspace, up 28p at 334.5p and Unite, 29p firmer at 401p. Millennium & Copthorne Hotels encouraged buyers by announcing it will put its Singaporean assets into a Real Estate Investment Trust, sending the shares 36p higher to 446.25p. Overall, the FTSE 250 gained 317.5 to close at 9508.

The private-equity rumour mill has been quiet in the past few weeks but traders believe another bid will come next week - this time for Helphire. The group, which provides substitute cars for victims of accidents, is yet another business that not long ago was on the brink of bankruptcy after a group of insurance companies tried to stop claims made against them. The shares dipped to less than 50p in May 2000, and traders believe a private-equity firm is poised to offer 505p for the group next week. The shares rallied 15p to close at 420p.

There was also good support for Victoria Oil & Gas, 19.5p better at 189.5p, as traders waited for news on preliminary well testing at Well 106. A statement on 15 May indicated that results would be announced before the end of May, and with only days left, investors backed the stock to give a positive drilling update at the start of next week.

There was strong demand for shares in Asia Energy. The company owns the rights to a substantial coal deposit in Bangladesh, but so far the Bangladeshi government has failed to give the company the green light to start developing the site. The broker Cazenove calculated the company could be worth in the region of 1,600p per share when the site is in full production. Some traders believe the green light will be given soon, giving the shares a boost as they closed 26p firmer at 304p.

It was another grim session for shareholders in Chariot, the alternative lottery operator. Traders voiced concern that the company has made no announcements in a period that has seen its share price fall from 210p to yesterday's all-time low, 36p, a fall of 17p or 32.1 per cent. One trader said: "When this sort of thing happens, investors normally take no news to be bad news."

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