Market Report: Numis raises hopes of Emap bid for Scots Radio

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Numis Securities yesterday returned from meeting with Emap's management convinced that it is only a matter to time before the media conglomerate takes over Scottish Radio. Praising the way that the group has developed its media assets, the broker said: "In our view, the final part of the jigsaw would be for Emap to consolidate is ownership of Scottish Radio."

Numis Securities yesterday returned from meeting with Emap's management convinced that it is only a matter to time before the media conglomerate takes over Scottish Radio. Praising the way that the group has developed its media assets, the broker said: "In our view, the final part of the jigsaw would be for Emap to consolidate is ownership of Scottish Radio."

Emap, down 6p at 721.5p yesterday, bought its 28 per cent stake in Scottish Radio from SMG in January. "We believe the geographical fit of the two is perfect and that culturally both companies radio portfolios are similar," added Numis, which is certain that a link-up of the two would have little trouble making it past the regulators. It is convinced that such a deal would create a lot of value for Emap shareholders and predicts that the media group will offload some of its local newspaper assets in the wake of the acquisition.

Cattles rose 10p to 300p on talk that HSBC, down 5.5p to 820.5pp, is running the slide rule over the specialist lender. It was not so long ago that HSBC bought Household in the US, in many ways a similar type of business to Cattles, which will unveils interim results next week. A 7 per cent jump by Trinity Mirror shares, 42.5p better at 659p, got traders talking about the possibility of a private equity bid for the newspaper group. Bid speculation also drove demand for Amec, up 20p at 295p. Dealers talked of a US predator that might be willing to pay up to 380p a share for the construction group.

In the FTSE 100, Bunzl dropped 8.25p to 418p after Deutsche Bank was heard urging its clients to sell the stock. The supermarket packing group is being negatively impacted by rising input costs, mainly because of the strong oil price, according to Deutsche. The broker fears that it will struggle to pass on these cost increases to its customers and predicts that earnings at the group can only suffer. The German broker, which set a 383p price target on Bunzl shares, calculates that a 1 per cent fall in pricing at the company could impact its earnings by as much as 12 per cent.

Meanwhile, Reuters featured as one of the best performers in the blue chip index thanks to Credit Suisse First Boston. Starting coverage of the financial information provider with an "outperform" recommendation, the Swiss broker believes Reuters is set to surprise many in the City by topping its target of £440m of cost savings by 2006. Unilever dropped 4.5p to 469.5p after weaker than expected results from Swiss rival Nestlé, which complained that poor weather across Europe had impacted its sales figures. The FTSE 100 index finished just 3.5 points lower at 4,355.2.

Investors continued to exit JD Wetherspoon, down 6p to 245p, amid worries about the company's short-near performance and long-term strategic position. Judging by the group's recent trading statement, next month's results are unlikely to excite as conditions remain difficult for high street pubs. Downgrades to forecasts could well follow the figures, which are likely to show the first decline in pre-tax profits since Wetherspoon's 1993 float. Meanwhile, on a longer-term view, analysts fear that the company has lost its way after the decision by its founder, Tim Martin, to step back from an executive role at the company.

ICAP put on 0.5p to 220.5p after Credit Suisse First Boston hinted that the money broker is likely to have experienced a pick-up in volumes since the start of the month and tipped the company to win greater market share going forward. CSFB's comments follow a meeting with ICAP's chief executive, Michael Spencer.

However, holding the stock back from further gains were concerns about the expiry of lock-ups governing a number of large shareholdings in the company. As part of ICAP's acquisition of Brokertec, 12 investment banks received 60 million ICAP shares and the last of the lock-ups covering this stock is due to run out in November. CSFB says it is hard to know what the holders will do when they are free to sell.

McBride was steady at 123p despite growing worries that the performance of detergents maker may be held back by rising costs due to the strong oil price. One company likely to be benefiting from the strong crude price, however, is KBC Advanced Technologies, the leading consultant to the oil industry. Its shares added 4p to 39.5p on murmurs that next months interim results are set to impress.

Finally, Imagesound had its first day of dealing on AIM following a reverse takeover of cash shell Advanced Capital Invest. The group specialises in providing background music to shops, fitness clubs and bars and boasts a client list which includes blue-chip names such as B&Q and Superdrug.

Evolution Beeson Gregory forecasts Imagesound to generate turnover of more than £11m by the end of 2004 and enjoy a pre-tax profit of around £1.5m. After the reverse takeover, the group raised £2m via a placing at 20p. The stock closed at 20p yesterday.

Market movers

¿ Rexam 409.5p (up 6.25p, 1.6 per cent). ABN Amro urges investors to add to their holdings in the packaging group ahead of next week's results.

¿ Man Group 1,360p (up 12p, 0.9 per cent). Announces that the net asset value of its AHL fund rose by 1 per cent on the previous week.

¿ BT Group 182.25p (up 1p, 0.6 per cent). Boasts that it has passed the three million wholesale broadband customer mark.

¿ Collins Stewart 366p (up 19.5p, 5.7 per cent). The Financial Services Authority ends its investigation into the stockbroker and fund manager.

¿ CRC Group 162p (up 24p, 17.4 per cent). Announces that it has secured a "significant" deal with Vodafone, under which it will become the single repair partner for the mobile phone giant in the UK.

¿ Billam 21.5p (up 2p, 10.3 per cent). Says that Physiomics, which which Billam has a stake, will float on AIM later this year.

¿ MyTravel 5.48p (up 0.47p, 9.4 per cent). Short covering drives the stock higher.

¿ Connaught 475p (up 11.5p, 2.5 per cent). Unveils a £2.5m acquisition and a deal with Hackney council in London.

¿ Rentokil Initial 153.5p (down 3.5p, 2.2 per cent). The latest reports suggest that the company's management team will aviod breaking up the group.

¿ British Airways 216.5p (down 4.75p, 2.2 per cent). Members of the Transport and General Workers Union vote in favour of strike action.

¿ Glow Communications 0.09p (down 0.38p, 80.9 per cent). Investors finally wake up to the fact that the company is to be de-listed from AIM.

¿ Minorplanet 13p (down 1.5p, 10.3 per cent). Rob Kelly steps down as chief executive.

¿ Elite Strategies 0.10p (down 0.01p, 9.1 per cent). Raises £750,000 via a placing at 0.1p.

¿ BHP Billiton 517p (down 7p, 1.4 per cent). Profit taking after strong full year results from the mining giant.

¿ Viridian 606p (down 37.5p, 5.8 per cent). The stock goes ex-dividend.

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