Market Report: Royal & Sun shines on renewed takeover talk

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The latest takeover talk to surround RSA comes just two months after the controversial financier Andrew Regan said he was considering a move on the company through his Corvus investment vehicle. But Mr Regan's interest in the insurer came to nothing, and many analysts were not surprised given the unknown liabilities at RSA's US division.

Nevertheless, Goldman Sachs was heard making positive comments about RSA yesterday, and these certainly helped buoy the stock. The US broker applauded the insurer's recent first-half results, which easily beat City forecasts, and highlighted a series of bullish developments at the company since Corvus's bid. These include the fact that RSA has managed to cut £126m from its pension deficit after agreeing a new pension scheme with staff and the sale of non-core assets.

Meanwhile, Deutsche Bank got investors interested in newspaper owners. Daily Mail & General Trust finished as one of the best performers in the blue-chip index, up 16p to 671.5p, after the broker upgraded its rating on the stock to "buy" from "hold". Deutsche said: "Daily Mail & General Trust should continue to outperform its national peers."

The German broker also helped Johnston Press register a 5.5p rise to 505p. It expects the regional newspaper group to report solid first-half results this month. Deutsche is convinced Johnston Press will announcepre-tax profits of about £81m, up from £78m in 2004, and hopes to hear details about the prospects at Score, the regional newspapers business it recently bought from Scottish Radio Holdings.

BOC lost 14p to 1,039p amid fresh rumours the industrial gases group is plotting a merger with Linde, its German rival. Analysts have argued for years that a tie-up between the two makes sense, and the latest rumours seem to have been sparked by reports in the German press. The wider FTSE 100 was also in retreat, falling 22 points to 5,322.

Michael Page rose 0.75p to 248.25p, despite the sale of 1 million shares at 247p by Terry Benson, the chief executive of the recruitment giant. Mr Benson bagged £2.4m from the disposal. Rumours of a bid for the electronics maker Laird Group pushed its shares higher in the morning, but as the session worn on traders lost interest in the story and the stock finished down 1p at 334p.

Stanley Leisure gave up 17.5p to 567.5p as Altium Securities suggested that shares in the casino operator had got ahead of themselves. Although Stanley is in the process of returning £325m to shareholders, the broker believes the company is in need of further restructuring. Altium warned: "While Stanley has the largest casino estate in the UK, to our mind it is neither the best invested or the best located. We believe that substantial relocation, refurbishment and repositioning work is required across the whole estate and this is likely to involve a substantial disruption to trading."

Petrokazakhstan was up 50p to 2,512.5p after the oil explorer confirmed it has received several takeover approaches. PetroChina, Asia's largest oil producer, and a joint venture between India's state oil company, ONGC, and billionaire Laxmi Mittal are said to be among the parties interested in acquiring the group. Even in the absence of an offer, Numis Securities believes Petrokazakhstan shares are good value.

Paul Scott sold down his stake IndigoVision, 2.5p stronger at 148p, but retained a 3.8 per cent holding in the video technology group. The small-cap specialist cleverly built up his shareholding in IndigoVision back when its shares traded at about 40p. At this level, the company was valued only in line with its cash pile and the market attributed zero value to its ongoing business. Since then, IndigoVision has proved sceptics wrong and those who backed it have made good money.

Ideal Shopping Direct ticked 4.5p higher to 373.5p on talk the company has enjoyed strong trading over the summer. Sales at the group are said to be well ahead of the same period last year. Fun Technologies put on 1.5p to 256.5p as dealers reported heavy institutional demand for the stock. Gossips reckon business is booming at NetStore, 1.75p higher at 38p, and that next month's results will impress the City.

Finally, word has it Block Shield Corp will announce the appointment of a finance director today. This comes as the technology group puts to use the £4m it raised in June to expand.

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