Berisford grabs a slice of the action : MARKET REPORT

Saturday 04 February 1995 00:02 GMT
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The FT-SE 100 index gained 25 points to 3,059.7 and the FT-SE 250 index 6.4 to 3,390.2. Share volume was 743.3 million with 21,846 bargains. Government stocks gave ground.

Berisford, the old commodities group that has been transformed by chief executive Alan Bowkett, held centre stage as Associated British Foods sliced its shareholding.

The baking giant sold 10 million shares (6.63 per cent) at 228p, reducing its stake to 7.72 per cent. A few years ago it had about 20 per cent.

Institutions were anxious to pick up stock and the placing by Hoare Govett was heavily oversubscribed. It seems ABF decided to lighten its load to acquire cash to take up its remaining share of Berisford's £317m rights issue.

The cash call follows Berisford's acquisition of Wellbilt, a US group making kitchen equipment, often for fast-food restaurants. The US deal is the second significant expansion since Mr. Bowkett moved in on the then struggling Berisford business. He reshaped the group and although a bid for C&J Clark, the unquoted shoes group, failed he went on to buy Magnet, the bathroom and kitchen group for what was regarded as a bargain £56m.

The ABF sale seemed to spark interest in Berisford shares, prompting two-way activity. There was litte change in the price, 1p firmer at 236p.

The rest of the stock market ended the week on a strong note with the FT-SE 100 index jumping 25 points to 3,059.7 as the interest rate increase continued to be submerged by US enthusiasm. New York has climbed for four days in succession helped along by the terms of the Mexican rescue package and the hope that the latest interest rate increase represents the last in the present sequence.

The FT-SE 100 index has had a more volatile time but rose 37.5 points over the week.

GEC came to life, gaining 10.5p to 290.5p in busy trading. The surge revived thoughts that a Monopolies and Mergers Commission recommendation on its VSEL bid could soon appear, possibly next week. GEC is battling for control of the shipbuilder with British Aerospace, firm at 482p. VSEL held at 1,495p.

Great Universal Stores edged ahead 5p to 528p with London Wall Equities drawing attention to the mail order and property group's break-up value. LWE's John Chaterway estimates GUS is worth 665p a share, making the shares a better asset play than Kingfisher where most analysts have settled on a figure approaching 500p. Kingfisher dipped 1.5p to 423.5p.

Dalgety's successful bid for the Quaker pet foods business lifted the shares 23p to 419p. The proposed sale of the Golden Wonder snacks foods side directed attention at United Biscuits, the KP group, up 10p at 333p, and little Bensons, struggling with a rights issue. The shares, down 12p on Thursday, rose 8p to 26p.

Carrs Milling was firm at 255p as an upbeat trading statement nullified the failure of takeover talks with NWF, a feedstuff and fertiliser group with a share presence on the 4.2 market. NWF shares are priced at about 700p.

The UB advance alerted the takeover-hungry speculators who also returned to Lasmo, the oil group that avoided the embrace of Enterprise Oil last year. Lasmo gained 4.5p to 151p in busy trading.

There is talk of Atlantic Richfield interest and that Enterprise, still with 9.8 per cent of Lasmo, is considering mounting a new bid when the takeover code allows.

Cable and Wireless, linking with Japanese electronics group NEC to develop global telecommunications, recovered 13.5p to 393.5p and Vodafone responded to US buying, up 6p to 187.5p. BT, figures next week, rose 7.5p to 402.5p.

The Friday crop of profit warnings had a telling impact. AAH fell 21p to 282p; Etam 18p to 183p and Sterling Publishing more than halved to 43p.

Allied Radio was another in the doldrums, halving to 3.25p. The group has lost the licences for two radio stations. Utility Cable rose 1.5p to 23p. It has launched an ADR facility.

Highland Distilleries, the Famous Grouse Scotch whisky group with close links with Remy Cointreau of France, tumbled 22p to 383p with talk of a director's share sale doing the damage.

Glaxo put on 20p to 666p as the market took the view its near-£9bn bid for Wellcome, up 13p at 1,018p, would succeed.

British Steel gained 4.25p to 154.75p on SG Warburg support and Hanson continued to attract buyers after its positive shareholders' meeting, improving 2.75p to 235.25p.

Ahead of third-quarter results on Monday British Airways stuck at 369.5p. Its profits are likely to emerge at about £90m, up from £65m. The group achieved another passenger increase in January with the growth in premium passengers outstripping scheduled demand.

Butte Mining made a dismal return. Its Montana lawsuit has been dismissed. It will appeal to the Federal Appeal Court. Suspended at 4p, the shares fell to 2.75p.

Dealings are expected to start in shares of Wessex Trust, a property investment group, on Monday, following the placing of 23 million shares in the group at 10p. After the sale the three founding directors own 40 per cent of the capital, with an Israeli-based business, Padant Lustig, holding a further 26 per cent. Wessex is likely to use its share quote for acquisitions.

Bluebird Toys gained 6p to 230p, still flushed with the success of this week's toy fair and the reception given to its new lines. Takeover talk is also in the air. The group's profits are due to be announced next month and there are signs that forecasts for it are being edged up. Some are now around £19m, which compares with £9.82m produced last time.

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