Market Report: Magners makes Miller dedicate time to C&C

Magners, the Irish cider brand brewed by C&C Group, has been more of an alcoholic sensation than alcopops ever were, mainly thanks to the revolutionary idea of putting ice in the cider. If market rumours are to be believed, the success of Magners is about to attract the attention of a much larger brewing group.

The talk in the market is that SABMiller, the South African brewing giant, is mulling an offer for C&C Group, shares in which have risen almost sixfold since coming to the market in mid-2004. Given the stellar growth of the Magners brand, a bid for C&C will not come cheap. But traders said that SAB's deep pockets should mean that a bid of €16 per share, valuing the company at €5.2bn, is not beyond their limits. C&C, quoted in London and Dublin, closed €0.11 firmer at €12.30, while SABMiller closed 11p better at 1,070p.

In the blue chips, Prudential was boosted by a bullish note from broker Cazenove that claimed the company is "poised to take decisive strategic action" that could include the sale of its life operations. Cazenove believes such a deal could give the shares 16 per cent upside to 777p. The broker maintained its "outperform" rating on the stock as the shares closed 28p better at 680p.

Wolseley gained 38p at 1,246p, as traders continued to think that the stock has been oversold in the last month. One trader said: "This company is far more than just a proxy for the US housing market; it is far more robust than that and I expect it to continue with its acquisition programme."

Clothing retailer Next, 31p worse at 1,750p, was high on the list of fallers as traders sold out of the stock over fears that Christmas trading is going to be tough. There have been whispers about profit warnings on several occasions in the last few weeks and traders will be on the lookout for more signs of weak Christmas high street spending.

In the wider market, continued corporate activity, real and imagined, continued to drive London shares higher. The FTSE 100 closed 41.2 better at 6,131.5 despite a weak opening on Wall Street.

SSL International, the maker of Durex condoms and Scholl foot care products, was 17.5p firmer at 371.25p as rumours did the rounds that the US consumer goods giant Procter & Gamble is poised to make a bid for the company. Traders said a bid could value the shares at up to 450p, just over £900m including debt. Takeover whispers have done the rounds for a couple of days but traders said the talk is now gathering a lot of momentum.

The collapse of bid talks for Premier Oil, down 141p to 1,205p, knocked back most second-line exploration and production stocks. Dutch broker ABN Amro was particularly harsh on Premier, telling clients that it sees no upside for the shares and that most of the company's assets are ex-growth. It set a target of 1,000p for the shares, although most analysts remain positive on the group's prospects. JKX Oil & Gas and Burren Energy were also out of favour, falling 8p to 297p and 13p to 916.5p respectively.

Daejan Holdings, the property investment group, celebrated promotion to the FTSE 250 in Wednesday's reshuffle by adding 725p to 5,950p, a new all-time high. Given that most tracker funds track the all-share index, movements between indices does not usually have such a big impact. But the company was excluded in 1999 because of its lack of liquidity, so no tracker funds would have held any of the stock. Traders said the buying could continue for a while as institutions build up positions in the stock to reflect its market weighting.

In the small caps, Reneuron surged again after news on Wednesday that the company is seeking human trials for its embryonic stem cell stroke treatment. Senior management must be very confident that the trials will be a success because the board bought more than 190,000 shares yesterday, sending the price rocketing 19p to 38.75p, a rise of 96.2 per cent.

Retail investors were all over Petrel Resources, the Dublin and London-listed oil exploration group. The word among small-cap traders is that the company is poised to deliver a very bullish drilling update. If a statement does come it had better be good - the shares closed 10.5p firmer at 47p.

Finally, small-cap traders are looking for an announcement from Forum Energy, up 13.5p to 86.5p. The word among investors is that the company could be about to sign a deal with the Chinese National Oil & Gas Corporation to develop the Sampaguita gas project in the Philippines, thought to be one of the region's largest potential gas deposits.