Vague talk of renewed bid interest stirs Woolies

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The Independent Online

The pick 'n' mix giant conducted drawn-out negotiations with the private-equity firm Apax Partners earlier this year, and the talk now is that another venture capital firm has come out of the woodwork with the idea of making a bid of up to £600m for the retailer.

The talk was vague, it has to be admitted, but investors believed that Woolworths looks better value at 36.75p (up a ha'penny yesterday) than it did at the mooted 58.2p bid price at which Apax could not make the numbers stack up.

Traders are longing for another big bid battle to spice up the market. Although the FTSE 100 has bounced back by 220 points from its nadir in the hours after the terror attacks on Thursday, the City is concerned there will now be a pause for breath. Yesterday's modest gains came in a low volume of trading, although they did take the FTSE 100 to another three-year best. It closed up 10.2 at 5,242.4, despite the slide in the oil price which resulted from Hurricane Dennis passing without too much disruption. The oil price decline poleaxed shares in two of the UK's biggest companies, BP and Shell. They were off 7.5p at 634p and 15.25p at 548.75p, respectively, while BG Group, the other big oil and gas play, fell 5.75p to 471.25p.

A countervailing influence on the index was Vodafone, as ever the most heavily traded London share. It was up 1.75p to 141p before its investor day in Germany on Thursday and some new customer data at the end of the month, both of which are getting investors excited. Vodafone is one of a number of companies to have found a way round the prohibition on share buy-backs in the run-up to financial results, in the so-called "close period". A number of banks will do it on Vodafone's behalf, so the prop to the share price will not have to be temporarily removed.

There was heavy volume of trading, too, in Royal & SunAlliance, after positive comment on the US insurance market, where most of RSA's riskiest policies are to be found. The stock, long tipped as a takeover target, was up 1.25p to 85.75p, while its sector-mate Aviva, the owner of Norwich Union in the UK, rose 9.5p to 627.5p.

Shares in French Connection fell 4.25p to 237.75p after Baugur, the acquisitive Icelandic retailer which has started building a stake, apparently said it would halt its UK acquisition spree until its chairman had cleared his name of fraud charges. Somerfield, for whom Baugur had been bidding as part of a consortium until being kicked out of the team last week, rebounded 1p to 197p.

Talk of robust trading helped MFI Furniture 0.75p higher to 112.75p. And Dechra Pharmaceuticals was 5p stronger at 220.5p after the veterinary drugs wholesaler was rumoured to be ready to announce commercial collaborations in North America with its forthcoming final results.

Venture Production, an oil and gas explorer with interests in the North Sea, was up 7.75p to 425p on talk that it has attracted a 550p-per-share takeover bid. In the early months of this year, Venture tried unsuccessfully to merge with Dana Petroleum, its partner in the Greater Kittiwake gas field. Dana was a ha'penny lower at 681p as it revealed the chief executive, Tom Cross, exercised 350,000 options.

The London Stock Exchange fell 1p to 493p as the continued delays to a Competition Commission verdict suggested that a takeover could be complicated to the point of collapse by the competition regulator. The fall came despite the flawless introduction of electronic trading for another slew of small-cap stocks, and despite news that June was the best month for new companies in more than eight years.

And still companies are arriving. Two were introductions only, raising no new cash. AfriOre, 76.5p by the end of the day, is a mining group already traded in Canada, while Tescom Software Testing Services is an Israeli firm whose shares ended at 105p. Shanta Gold raised £3.5m, its shares up 2.5p to 27.5p. And Jumpit, which makes batteries for iPods, jumped to 44.5p after raising £3m at 40p.

And finally, one to look out for shortly. Ptarmigan is a property investment company, set up in Guernsey to minimise tax, which aims to cream off some of the financial uplift that comes when a piece of land is re-zoned for planning purposes. It is linked to a team of entrepreneurs who will identify suitable plots of land (they are already working on three in the South of England) and make the necessary planning applications, sharing in some of the gains. Ptarmigan has raised £7.5m to date and Seymour Pierce is helping it raise a further £20m before its flotation on AIM before the end of the month.

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