Antennae out for broadcast bids

MARKET REPORT The FT-SE 100 index rose 5.2 to 3,143.1 and the FT-SE 250 index 2.9 to 3,437.6. Turnover was 601.1 million shares with 39,457 bargains. Government stocks were firm.
Radio and television shares stole the show as the stock market anticipated another round of takeover bids.

Next month, in what is expected to be a radical shake-up of the cross- media ownership rules, the Government could clear the way for national newspapers to own more than 20 per cent of ITV companies.

Last year television shares soared as bid frenzy overwhelmed the sector, with Granada winning LWT and MAI taking Anglia TV.

Since then television shares, despite a Mirror Group Newspapers share build-up at Scottish Television, have faded into the background, with apparent government indecision doing much of the damage.

But there have been signs in recent weeks that significant changes could be on the way.

The most vulnerable television shares attracted buying attention. Scottish, where MGN is seen as a likely bidder, jumped 21p to 458p. MGN has 19.99 per cent of Scottish, its maximum holding under present legislation.

Yorkshire-Tyne Tees, where Pearson is a big shareholder, added 27p to 437p, a 12-month high, and Ulster put on 20p to 689p. HTV firmed 3p to 167p. Among radio shares Chiltern Radio added 25p to 228p.

The rest of the market steadied after Friday's retreat, with the FT-SE 100 index closing 5.2 points higher at 3,143.1. Dividend payments took 3.5 points out of the calculation. Currency worries and a hesitant New York display restrained interest. What little investment business that was transacted was lost in the continuing rush of bed-and-breakfast and PEP deals.

But bond markets were firm, with government stocks up almost half a point.

Financials remained in the forefront, with Govett's decision to sell its fund management arm lifting the shares 26p to 285p. ShareLink, the no-frills stockbroker, gained 12p to 219p as a 230p bid from the US investment house, Charles Schwab, was rumoured to be imminent. ShareLink disclosed that it was in talks with an unidentified party last week. Since the start of last month its shares have climbed from 143p.

Smith New Court, however, remained depressed, as whispers that profits will not reach market expectations continued. The shares fell 15p to 438p.

But Kleinwort Benson and SG Warburg, seen as the most takeover prone merchant banks, gave ground. Kleinwort lost 20p to 627p and Warburg 12p to 705p.

Cable and Wireless was on the right wavelength as stories of a deal with the US giant, AT&T, resurfaced. It is thought that the Americans could buy a substantial stake in Cable's Mercury communications off-shoot. The shares rose 7p to 395p. Vodafone put on 2p to 200.5p on the latest connection figures.

British Aerospace shaded to 473p. Its new unit, part of its trombone rights issue to buy VSEL, threw the market into confusion. Traders were often reluctant to deal, complaining that there was not enough information to allow them to value the unit. In the event it started trading at 117p, closing at 123p, with volume printed at 310,000.

Among utilities North West Water, proposing a special dividend and a customer payment, rose 10p to 559p, with UBS making positive noises. Electricals managed a glimmer of cheerfulness, with Northern 14p firmer at 763p. But Yorkshire, where there were such high hopes of a Hanson bid, continued to fade. The shares slipped another 2p to 604p, a 12-month low, with stories continuing to circulate that many small shareholders were nursing huge losses. When the electricity takeover speculation was at its height in January the shares were around 900p.

Glaxo, as the US Food and Drug Administration cleared its anti-migraine tablet, edged ahead 5p to 711p. Smith is keen on the shares following the Wellcome takeover. It has projected the benefits of the deal until 1999, when it sees profits of £3.83bn against £2.06bn in the year ending in June.

Zeneca, with Socit Gnrale Strauss Turnbull describing the shares as a "long-term buy", gained 5p to 875p.

But Smith was far less enthusiastic about Redland, the building materials group, which last week cut its dividend. It believes the shares should be about 420p. They closed 2p down at 434p.

Allied Domecq, on reports of a £300m buyout of its Tetley tea business, rose 9p to 538p but Highland Distilleries' sober profits performance left the shares 26p lower at 357p. What were regarded as satisfactory profits lifted Morgan Crucible 13p to 330p.

Lloyds Bank dipped 2p to 614p, with Smith cautious; Boots was lowered 4.5p to 504.5p, with ABN Amro Hoare Govett joining the sellers.

David Lloyd Leisure, the fitness and tennis group, was firm at 241p. The chairman, David Lloyd, has picked up 32,500 shares at 240p, lifting his stake to 8.64 per cent.

Fitzwilton, the Irish conglomerate, rose another 5p to 53p. The identity of the 9 per cent stakebuilder remains a mystery although talk in Dublin points the finger at Dunns Stores, the Republic's biggest supermarket chain. It is thought that the privately owned Dunns business could be seeking to buy Wellworth, the Ulster supermarket group owned by Fitzwilton.

VHE (representing Very Heavy Vehicles) fell 10p to 80p after a warning that year's profits would emerge around £3m against market hopes of up to £4.4m.

Rhino, the games retailer, remained friendless, down 0.5p to 7p. The company has been hit hard by the slowdown in the computer games market.There was busy trading in some of the market's tiddlers. Ticketing, the ticket agency spun off from Wembley, achieved, in percentage terms, the day's best gain, up 50 per cent to just 0.75p. More than six million shares were traded. Orb Estates, the struggling property group, which has shown signs of pulling out of its difficulties. stuck at 0.75p. But turnover topped 26 million.